International Corporations and Cross-Border Knowledge Transfer in the Semiconductor Industry

Are international corporations superior to markets and alliances in facilitating the flow of knowledge between countries? Despite widespread acknowledgement of the superior efficiency of the firm in international knowledge transfer, the theory remains underdeveloped, and empirical support is conspicuous by its absence. This paper has two primary goals. First, to use patent citation data to compare the relative performances of firms, alliances, and markets in the transfer of technological knowledge between countries. Second, to investigate the reasons for the superior capability of the international corporation in facilitating cross-border knowledge flows by examining the mechanisms through which international firms manage international technology transfer. Our findings confirm the superior performance of firms over both alliances and markets as conduits for the flow of knowledge between countries. A more detailed examination of the experiences of five large semiconductor firms suggests that this superiority is the result of its ability to utilize a wide range of knowledge transfer mechanisms flexibly and in combinations with one another, and to embed these transfer mechanisms within a social context that enhances their effectiveness.

Carnegie Bosch Institute (1998). Articles>Knowledge Management>Workplace