Transformations  in
Business & Economics

THE IMPACT OF ENTRY MODE ON REVERSE KNOWLEDGE TRANSFER: THE MODERATING ROLES OF SUBSIDIARY AGE AND FIRM SIZE
Guanghui Xiong, Lei Wang, Xing Fan, Qiongqiong Zhang

ABSTRACT. Drawing on theories of international investment and R&D spillovers, we develop a theoretical framework that examines the impact of multinationals' entry mode-namely, greenfield entry and acquisition entry-on Reverse knowledge transfer effect in China, and the extent to which the impact is moderated by subsidiary age and firm size. Using the panel data of 178 Chinese multinationals from 2012 to 2015 to carry out empirical tests, the full sample empirical results indicate that in the design models there is a significant negative association between entry mode and Reverse knowledge transfer effect. In the sub-sample of software services industry, the positive moderating role of subsidiary age is significant while in the sub-sample of high-tech manufacturing industry the positive moderating role doesn't pass the significant tests. The above conclusions can help to better explain the dispute which exists in the relationship between entry mode and Reverse knowledge transfers from the micro perspective. The conclusions also can enrich the theories of Reverse knowledge transfers and provide guidance for Chinese multinationals in choosing the appropriate entry mode  .

KEYWORDS: OFDI, entry mode, reverse technology spillovers, industrial differences, China.

JEL classification: M14, M19, P2.