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Article

A Sustainable and Comprehensive Framework for Knowledge Transfer in MNCs: An Empirical Examination Based on Country, Company and Individual Levels of Chinese MNCs

by
Junshuai Cheng
1,*,
Qaisar Iqbal
2,
Guangmeng Ji
3 and
Weichun Li
4
1
School of Management, Sichuan University of Science and Engineering, Zigong 643000, China
2
IRC for Finance and Digital Economy, KFUPM Business School, King Fahd University of Petroleum and Minerals, Dhahran 31261, Saudi Arabia
3
School of International Business, Zhejiang Guangsha Vocational and Technical University of Construction, Jinhua 322100, China
4
CAAC Academy, Civil Aviation Flight University of China, Guanghan 618307, China
*
Author to whom correspondence should be addressed.
Sustainability 2022, 14(21), 14074; https://doi.org/10.3390/su142114074
Submission received: 21 September 2022 / Revised: 15 October 2022 / Accepted: 19 October 2022 / Published: 28 October 2022
Browse Figure
Review Reports Versions Notes

Abstract

:
The shift in business perspective helps test, extend, and build innovative management theory, then sustainably expand and enhance the understanding of business and management. The development of the global business model makes knowledge transfer not only focus on the process itself, but especially the knowledge transfer of multinational companies (MNCs). Thus, this study is based on the knowledge-based view (KBV) theory, using a sustainable perspective and establishing a spatial model, which includes three aspects: county, company, and employee. It has been mentioned many times in previous research that it is necessary to build such a comprehensive model and completely study the influence factors, while this study is the first to carry out an effective empirical way to test which levels have significant factors that impact the knowledge transfer of Chinese MNCs. Moreover, with the advancement of technology, such as video conference and remote online cooperation, whether human abilities and traits (cultural intelligence) still occupy a specific position, as the conclusions of previous studies have proved, is also a focus of this study. Therefore, this empirical study uses the partial least squares structural equation (PLS-SEM) to test the influence of different aspects on knowledge transfer in Chinese MNCs. Although this study just chose Chinese MNCs as the case, the comprehensive results make up and rediscover some tacit factors of the impact on knowledge transfer, and then support further sustainable research.

1. Introduction

Sustainability is a real challenge in the new time, and global business activities are no exception [1]. Compared to other resources, such as coal or oil, knowledge has higher sustainability, and knowledge transfer allows for resources to be shared in more organizations, reducing the repeated waste caused by the same knowledge innovation, which is also the basic concept of sustainable business development [2]. Most MNCs prefer to find more dynamic and sustainable resources to support their development, and then knowledge was brought to the public eyes [3]. Knowledge-oriented or technology-oriented companies attract worldwide attention and are considered the direction of future economic development [4].
The sustainable development of knowledge transfer in MNCs is not a straightforward process [5,6]. The modern MNC is a more fragmented entity, and foreign subsidiaries are no more than passive recipients of knowledge from the headquarters (HQs); conversely, they often act as boundary spanners, exploring with more uncertainty and acquiring innovative knowledge [7].
Traditional research ignore the completeness of knowledge transfer and one-sidedly focuses on transfer link, such as the absorptive capacity of recipients [8], channels [9], organizational learning [10], etc. Although some scholars realized the geographic distance and abstract cultural distance [11], it is not enough to explain the complexity of knowledge transfer.
Firstly, at the country level, different geographical locations lead to differences in living environment, thus showing various cultural characteristics. Surely, diverse political subjects derive distinct institutions [11,12]. Secondly, for the firm level, it creates organizational boundaries because of the scrambling of the distribution of power and resources [13,14,15]. Third, for the individual level, it is a highly different ability, and the willingness to engage in knowledge transfer, despite knowledge transfer happening at the level of individual actors [5,16], not to mention the difference of cultural intelligence, makes knowledge difficult across national boundaries.
The earlier research focused on the developed western MNCs, while, in recent years, much of MNCs from emerging economies were discovered, such as China and India [16]. Given China as the research object, not only because it is both an emerging and developing country, but also because it tries its best to pay a lot of attention to acquiring knowledge: China’s investment in developed countries and regions accounts for almost half of the whole of the world. However, although Chinese MNCs have carried out large-scale investment and M&A activities, the acquisition and application of knowledge have not made much progress [17].
All-in-all, this study proposes scientific results to help many emerging and developing countries, such as China, break the boundaries at different levels and carry out knowledge transfer. At the same time, this study constructs a more comprehensive research model that uses empirical conclusions to test and make up for the deficiencies of the previous studies and theories.

2. Literature Review and Hypotheses

As the status of knowledge in MNCs is undoubtedly important in the era of technology, knowledge transfer has become a key capability for companies to compete with their peers [18]. It requires modern MNCs to adjust management mode experience and organizational structure to adapt to the globalized market competition [19].
As early as the 1970s, the important role of knowledge management for organizations began to be noticed. In the 1990s, the knowledge-based view (KBV) was well-known, on the basis of the resource-based view (RBV) and making knowledge a part of corporate assets. Early scholars believed that knowledge management included human creativity and information transfer [20]. Then, the idea was extended to include knowledge acquiring, editing, transformation, dissemination, application, creation, etc. [21,22].
MNCs are the coordinate points for knowledge exchange, and they establish knowledge networks across countries, which facilitates the flow and transfer of knowledge between nodes [23]. Thus, for a long time, most of research considered processing as the key part in the knowledge transfer, which includes four phases: the first phase ensures that knowledge needs to have a specific transfer value; the second phase establishes an effective media; the third phase accepts the willingness to learn and absorb knowledge actively; the four-stage knowledge is obtained and mastered by the recipient [22,23,24]. However, if we trace the development of MNCs, it is not enough to pay all attention to the process of knowledge transfer.

2.1. Country-Level Factors and MNCs’ Knowledge Transfer

MNCs are embedded in multiple national contexts, and country differences create difficult communication or cooperation and affect the success of MNC knowledge transfer [25,26]. In the early days of knowledge transfer, the networking of business behavior was mainly focused on the relationship level, and it was even argued that tight relationships can replace the impact of the institution on business activities [27]. The degree of difference between home country and host country institutions increases the level of uncertainty in MNCs’ engagements with host country and the barrier to returns [28]. The kind of harm, regarding institutional uncertainty and unfamiliarity to the host country (information asymmetry caused by the lack of understanding of the host country), is the content that MNCs have to pay attention to when facing the external environment [29].
Institutions play a crucial role in the decision-making of business organizations [30]. In the process of development, MNCs face two kinds of institutional situations [25]: one is the adaptation of the similarity institution, which is that the corporations and the host country have similarities in laws, regulations, and social culture. In the market activities, the home and host companies relatively easily absorb each other’s knowledge and understand each other’s strategic resources; the other is the choice of a different institution, in which corporations need to constantly integrate and adapt to the different institutional environment through continuous trial and adjustment, so that cooperation can be better accomplished.
The institutional factors on the knowledge transfer of parent and subsidiary companies are defined as institutional distance by most scholars. That is, the institutional environment is what an organization faces is an overall context, including politics (regulative distance), culture (normative distance), and cognition (cognitive distance) [30,31,32]. Institutions are guidelines for the regulation of social and individual behavior [33,34] and economic activity is no exception. Participants in economic activities are in a specific institutional environment and constrained by the rules system in the environment [35]. There are unique differences in the institutional environments between countries, and in the process of transnational investment and management, MNCs not only need to coordinate between different institutional environments, but also face the risks and pressures of operation under the differences of the institutional environments [7].
Therefore, when transferring knowledge across borders, MNCs may face multiple institutional pressures from different countries. We propose the following hypothesis.
H1: 
Country-level factors (regulative distance, normative distance, cognitive distance) negatively influence the knowledge transfer efficiency in Chinese MNCs.

2.2. Firm-Level Factors and MNCs’ Knowledge Transfer

The MNC is a complex organization, comprising a parent company and a number of subsidiaries in each country, and both of them are participants in knowledge transfer [36]. Generally, one MNC is considered a cohesive structure, in which a parent and the subsidiaries share a set of organizational norms or regulars, while clear organizational boundaries within MNCs create bottlenecks in knowledge transfer [37].
Previous conclusions proposed the sending and absorbing capabilities of participants, which only focused on the research of one party, in particular, or supplementing the model when studying other issues [37,38,39,40], and rarely involved the status and relationship of the two parties. However, the reality is more complex, and the existing unilateral research is insufficient to address the issues.
Facing the pressure of responding to local various environments, many MNCs employ a large hybrid strategy to balance the need for control and coordination between themselves and their subsidiaries [41,42]. While MNCs prefer to have a greater say in deciding the goals and directions for the subsidiary, it depends on the degree of obedience and autonomy at the subsidiary level [43,44].
As studying the ability of one party alone is less rigorous, this research identified the influencing factors to the greatest extent by selecting the variables related to both parent and subsidiary companies. Thus, more comprehensive results are needed to test the follow hypothesis.
H2: 
Firm-level factors (subsidiary autonomy, subsidiary position, organizational trust) positively influence the knowledge transfer efficiency in Chinese MNCs.

2.3. Individual Level Factors and MNCs’ Knowledge Transfer

Economic globalization has brought about the rapid development of international trade and MNCs, and it is the most common personnel strategy for MNCs to fill international job vacancies through personnel assignment [45].
Former expatriates and expatriate returnees who obtain a large amount of implicit and explicit knowledge from the outside are regarded as an important source of knowledge competitive advantage [46,47]. Scholars maintain that the expatriate is a citizen of the home country or a third country national appointed by the parent company to work in the subsidiary, which is a link between the parent company and the subsidiary of the MNC [48]. The former expatriates represent the interests of the headquarters of the MNC and expand the local communication channels of the host country; what is more, they act as an interpreter between the headquarters and subsidiaries of the MNC [49].
There are three main types of roles of former expatriates in MNCs: (1) To fill specific positions—overseas employees who fail to find certain positions are filled by former expatriates [50]. (2) To manage—increase management skills for specific overseas situations [51]. (3) To develop the organization—through the establishment of a social network of former expatriates and local employees, which assists the operation of foreign organizations [52].
Although expatriate managers have been well-recognized as facilitators of knowledge transfer, their positional advantage is doomed, due to their own convenience in exercising their assignments, which is special for research on individuals [50,51]. There has been relatively less focus on the characteristics of normal individuals, such as employees. Academic and practical research on this issue is still in the early stage, mainly conceptual articles. Some factors affecting the knowledge transfer of former expatriates are put forward in a scattered way, without a systematic conclusion and empirical research [53,54]. Scholars use interviews and content analysis methods to explore the dynamic process of knowledge transfer and propose a four-stage model of knowledge transfer for former expatriates [55]. What is more, they analyze the role played by different participants in this process. However, it can be seen from previous studies that the dynamic process of knowledge transfer does not form a unified understanding [54,55,56]. Therefore, it proposes the following hypothesis.
H3: 
Individual-level factors (job performance, position level, time on assignment) positively influence the knowledge transfer efficiency in Chinese MNCs.

2.4. Cultural Intelligence and MNCs’ Knowledge Transfer

Cultural intelligence refers to the ability to effectively collect and process information, make judgments, and take corresponding measures to respond to new cultural context [57,58,59]. It is defined as the ability of employees, from all walks of life, to maintain harmonious business relationships with customers, partners, and colleagues from various countries [60]. Cultural intelligence is essential for successful cross-cultural communication [61], which is considered an essential ability for personnel engaged in international tasks in MNCs [62].
The individual level is defined as the ability of employees, from all walks of life, to maintain harmonious business relationships with customers, partners, and colleagues from various countries [60]. The organizational level is defined as the ability of an organization to reallocate its own resources to effectively operate and manage in a changing cultural environment [63]. Scholars found that cultural intelligence can buffer against the potential negative impact of cultural diversity on team performance [59]. At the national level, personnel with high cultural intelligence can adapt better after entering the new environment, investing in work as quickly as possible, and completing tasks perfectly [64].
As a characteristic of expatriates, lots of researchers mentioned cultural intelligence as an independent variable [65,66,67,68]. Different from them, the main reason for this study to reintroduce cultural intelligence is to assess whether it still has an impact on employees’ cross-border knowledge transfer with the increase of remote communication and collaboration under technological development. Moreover, the main framework focused on the influence of different levels, thus putting it on the moderator and testing the relationship between individual-level factors and knowledge transfer efficiency (as shown in Figure 1).
H4: 
Cultural intelligence moderates the relationship between individual level factors and knowledge transfer efficiency.

3. Methodology

3.1. Research Design

The quantitative research method and the non-probability method were used in the current study [69], and we chose people who have worked in foreign countries as research objects. This design ensured the respondents were sufficiently familiar with the environments of both the parent company and subsidiaries.
In the present study, the population refers to the subsidiaries of Chinese MNCs. China is a statutory country, and the country adopts a unified legal system to regulate commercial activities; therefore, the choice of case location will not cause regional specificity. Therefore, the population of this study is the overseas subsidiaries of Chinese MNCs: it finds the MNCs list (choosing the top 500 companies) from the Administration for Industry and Commerce of the Chinese Government and sends questionnaires to the human resources department to help find suitable respondents; in addition, a cover letter is in the email attachment to encourage response. Then, a total of 239 questionnaires were collected, which accounts for 47.8%. Finally, we cleaned and analyzed the collected data, use PLS-SEM technique to find the relationships.

3.2. Measurement

3.2.1. Knowledge Transfer Efficiency

Knowledge transfer between organizations has become a vital resource for the survival and development of MNCs [7]. One complete knowledge transfer process is the communication process between the knowledge provider and the recipient, and the goal of the communication is that the recipient masters and applies the knowledge [70]. Reviewing previous research, we found that, except for the abilities to send and receive, it also includes the interaction ability of both parties [69,70,71]. Firstly, knowledge senders properly organize knowledge in an accurate time period and transfer it to the appropriate recipient of knowledge in an appropriate form, which is an effective knowledge transfer [72,73,74]. It requires knowledge senders to have the ability: clearly articulate the application of knowledge, assess potential knowledge recipients’ needs and realities, and transform knowledge to apply it [54,75]. Then, knowledge recipient is crucial to the ability to absorb and mine knowledge [76]. Finally, it is a capacity of communication that it is the interaction and support ability of both parties [77,78].
All-in-all, the dimensions are: (1) The extent of knowledge understood (the new knowledge is completed enough that I am able to become proficient with it; the new knowledge is thorough enough that I am able to understand it fully); (2) The usefulness of knowledge transfer (the new knowledge contributed a great deal to multiple projects; the Chinese MNC parent company was very satisfied with the quality of the knowledge); (3) The speed of knowledge transfer (the rate at which the new knowledge was transferred was very fast; the new knowledge was transferred in a timely fashion); (4) The cost of knowledge transfer (the new knowledge provided by international business activities was acquired and implemented at a very low cost; higher extent of acquisition and application of new knowledge) raises related questions.

3.2.2. Country Factors (Mainly Focus on the Institutional Factors)

The degree of differences between home country and host country institutions increases the level of uncertainty in MNCs’ engagement with host country and increases the barrier to returns [26,79]. The kind of harm of institutional uncertainty and unfamiliarity to the host country (information asymmetry caused by the lack of understanding of the host country) is the content that MNCs have to pay attention to when facing the external environment [29].
At present, the research at the national level mainly focuses on the institutional aspect. One more classic theory is three-pillar institution theory, which consists of regulative, normative, and cognitive dimensions: (1) The regulative dimension involves the legal environment, such as mandatory laws or regulations (Chinese laws and regulations obviously affect the business activities of my organization; the policies formulated can effectively promote cross-border knowledge transfer; the Chinese laws and regulations have been effectively implemented to promote cross-border knowledge transfer; Chinese laws and regulations are similar to those in the country I worked in as an expatriate, regarding knowledge transfer); (2) the normative dimension refers to social norms, such as industry rules and contracts (the incentive rules formulated by my organization (Chinese MNC) have an effect on knowledge transfer; my organization parent company (Chinese MNC) has set up a standardized and unified knowledge transfer channel; my organization parent company (Chinese MNC) carried out knowledge transfer training; the normative setting of knowledge transfer by Chinese MNCs is same as the country I worked as an expatriate); and (3) The cognitive dimension include culture, values, beliefs, etc. (there is a smooth internal communication between Chinese MNC parent company and the subsidiary company where I worked as expatriate; the decision-making methods of Chinese MNC parent company and the subsidiary company where I worked as expatriate are similar; the selection criteria for knowledge transfer personnel of Chinese MNC parent company and the subsidiary company where I worked as expatriate are similar; Chinese MNC parent company and the subsidiary company where I worked as expatriate have similar evaluation criteria for the success of knowledge transfer), that exist in the activities of a particular social scene [80,81,82,83].

3.2.3. Firm Factors (Mainly Focus on the Relationships between Parent and Subsidiaries)

Scholars divide the theory of parent-subsidiary relationships into three schools: parent-subsidiary relationship school (focus on subsidiary autonomy of this research), subsidiary role school (focus on subsidiary position or role of this research), and subsidiary development school (focus on the balance of the relationship of this research). The content targeted by these schools is the subsidiary autonomy [84], subsidiary position (or subsidiary role) [85], and the organizational trust [86]. What is more, they argue that the relationship between the parent and subsidiary company is the most important one in the whole network of MNCs.
Therefore, the dimensions of firm factors are: (1) Subsidiary autonomy (the communication between the subsidiaries in which I worked as expatriate and the Chinese MNC parent company is frequent; in the subsidiary where I worked as expatriate, the Chinese MNC parent company has a larger proportion of expatriate staff; the subsidiary where I worked as expatriate is performing well); (2) Subsidiary position (the knowledge stored in the subsidiary where I worked as expatriate is very helpful for performance improvement; subsidiary where I worked as expatriate have a huge stock of knowledge; the subsidiary I work for is a company focused on knowledge creation); (3) Organizational trust (the performance of the subsidiary I worked for as expatriate is evaluated by the level of knowledge [87,88,89,90]; the Chinese MNC parent company is able to make a reasonable evaluation of the subsidiary I worked as expatriate; the Chinese MNC parent company is able to deliver on its promises) [85,86,87].

3.2.4. Individual Factors (Mainly Focus on the Performance of Former Expatriates)

According to previous research by scholars, former expatriates with higher status in the organization may be more advantageous in cross-cultural adjustment than those with lower positions in the organization [91]. With the passage of time, foreigners have the ability to learn more about the culture, language, and other information of the host country [92,93]. Through interviews with 47 expatriate returnees, scholars indicate that former expatriates would undergo many changes during their tenure [92]. They have a broader international vision, have more diversified thinking patterns, and achieve more valuable growth. What is more, in the later evaluation, more and more scholars pay attention to the knowledge acquisition ability of former expatriates, namely their own performance level. Therefore, based on previous research, this study also divides individual factors into job performance (I am among the more effective employees, when it comes to getting things done; I contribute more than other employees in the work group; I am a top performer in work group) [56,91].

3.2.5. Cultural Intelligence

Regarding the dimensions of cultural intelligence, different scholars have divided them according to different perspectives. Scholars divide cultural intelligence into cultural strategic thinking, motivation, and behavior [94,95]. They maintain that, in the face of the new culture, there should be certain cognition, and at the same time, they should be confident in adapting to and handling this cultural environment. Under the encouragement of confidence, one can adjust one’s behavior according to specific environmental requirements and, finally, achieve adaptation. In other words, cultural intelligence is the ability of people or organizations to deal with different cultures calmly [96]. Then, other scholars proposed another three-dimensional structure of cultural intelligence, from the perspective of cross-cultural communication capabilities, namely knowledge, alertness, and behavior [97]. Knowledge refers to the grasp of cultural differences and the principles of identification and related communication. Alertness refers to the continuous attention to the internal environment and the external environment. Behavior refers to the ability to choose the appropriate behavior to adapt to the new environment, based on knowledge and alertness. The most common dimensions of cultural intelligence are metacognition, cognition, motivation, and behavior (when I work as an expatriate, I am conscious of the cultural knowledge I use when interacting with people with different cultural backgrounds; I know the cultural values and religious beliefs of other cultures; I know the legal and economic systems of other cultures; I change my behavior when a cross-cultural interaction requires it), and some scholars have conducted empirical research on them [66,98].

4. Analysis

4.1. Data Collection and Response Rate

A total of 239 questionnaires were collected in this study, and out of these, 212 could be used for the survey. This study collected data online, and if respondents did not answer any particular question, they could not move on to the next question, thus the results did not have missing values [99].
The expatriates had worked in various countries, and most of them come back from America, nearly accounting for 17%; the second-most were from the U.K and Australia, nearly accounting for 8%, and Japan and South Korea nearly accounted for 6%. The remaining countries, such as Malaysia, Singapore, Germany, Thailand, India, etc., accounted for about 2 to 3%. Finally, the rest of these data are minor, and the number was probably less than 10, such as Italy, Finland, New Zealand, Iran, Brazil, etc. As this study did not focus on geographical distance, it was enough to just ensure that the data came from different countries and test the influence of various national institutions.

4.2. Descriptive Analysis

4.2.1. Mean Scores and Standard Deviation Scores of the Study Variables

SPSS version 25 was employed to estimate the mean and standard deviations of the key variables. A seven-point Likert scale was used to evaluate the main measurement items in this study (Table 1), with the anchors ranging from 1 (strongly disagree) to 7 (strongly agree). Regarding the levels of agreement, on the seven-point Likert scale, mean scores of less than 2.99 were considered “low”, mean scores between 3.00 and 4.99 were measured as “moderate”, and 5.00 and higher were regarded as “high” [100].

4.2.2. Reliability and Validity

For the analysis of the PLS model (Table 2), the construct validity, convergent validity, and discriminant validity of the model need to be examined. The values of these indicators should meet the following conditions [101]: factor loading is greater than 0.7; Cronbach’s alpha (CA) reliability is greater than 0.7; composite reliability (CR) value is greater than 0.7; average variance extracted (AVE) value is greater than 0.5. Discriminant validity uses the HTMT ratio
There are some items that were deleted, due to low loadings. Thus, the values of the results were improved, and all the indicators were above the specified indicators. Next, evaluating the discriminant validity results, the outer loadings on the correlated constructs were greater than all of its loadings on other constructs, which validates the discriminant validity (the heterotrait–monotrait ratio) test. As Table 3 shows, the data performs well. Finally, we tested the collinearity, i.e., that all the VIF values were below the threshold of 5.0 (CF = 3.019; FF = 3.139; IF = 1.733; CI = 1.952; moderating = 1.124) and there was no multi-collinearity issue.

4.3. Hypotheses Testing

The model of the 3M framework includes three parts: macro, medium, and micro. This study cites the 3M framework and proposes the factors affecting the knowledge transfer of Chinese MNCs as: country-level factors (institution factors), H1; firm-level factors (relationships of parent and subsidiaries), H2; individual-level factors (individual job performance), H3. At the same time, the moderating effect of cultural intelligence was measured. As a result, the model explained 73.8% of the variance in the dependent variable knowledge transfer efficiency, which can be considered satisfactory.
As expected, the results of Table 4 strongly support H2 and H3, indicating that firm-level factors (β = 0.166, p < 0.05) and individual-level factors (β = 0.430, p < 0.001) positively influenced knowledge transfer efficiency in Chinese MNCs. However, it does not support H1, as the terms between country-level factors (β = 0.09, ns) and knowledge transfer efficiency were not significant.

5. Discussion

5.1. Country-Level Factors

This research shows that country-level factors (β = 0.09, p = 0.151) had no significant effect on knowledge transfer efficiency in Chinese MNCs. Surprisingly, the most fundamental attribute of a MNC—“cross-border”—had a unique level that had no impact on the results. This should start from the origin and development of MNCs.
Researchers have a long history of research on MNCs. With the development of MNCs, it has gone through several important stages, and births in many classic theories [99,100]. From the initial theory of monopoly advantage, to the internalization theory and the eclectic theory of international production. There are special reasons for the emergence of MNCs, and the original purpose is to monopolize international resources. In this stage, it also accelerates the circulation of international resources [101,102]. As the differences in systems, economies, and cultures of different countries, in order to allow MNCs to better adapt to the social conditions of the host country, the internalization theory has been put forward and discussed by researchers [11,103,104,105,106]. The internalization theory makes the MNCs and their global subsidiaries form a whole. Conducting business activities within the system can effectively avoid some external differences [107], which was confirmed in this study of knowledge transfer efficiency in Chinese MNCs.
Moreover, in earlier research, the worries for the country level are referred to in two parts: one is the law for knowledge protection, if the intellectual property regime is weak, HQ may apprehensive that the local partners or subsidiaries store or hide the proprietary knowledge [108]; and the other is the different language or communication distance, such as chat ways, that these differences affect the quality of information channels, hindering smooth knowledge transfer [109,110,111]. However, for MNCs or Chinese MNCs, the economy with a unified purpose, there is a highly centralized internal mechanism that skillfully solves the problem of knowledge crossing boundaries. Then with the development of technology, knowledge language is different from communication language, which becomes similar and interoperability, such as the code of most software. For knowledge communication, the knowledge language has become more and more detached from the language of reality, which is better that the communication is unconstrained by the language or distance.
Finally, it is more nuanced for us to understand the difference between countries. There are various relevant indicators for country differences in the field of knowledge transfer issues at hand in recent years, such as Hofstede’s measures of cultural dimensions or other scholars’ measures of institutional dimensions. This study combines as many aspects as possible and chooses country-level indicators including many parts, such as culture, laws and norms. Then compared with analogizing statistics to certain dimensions, questionnaires provide more direct and exact information, which concludes extremely interesting results.

5.2. Firm-Level Factors

Most previous research was based on the “process” characteristics of knowledge transfer, in order to find the influencing factors. They focused on the reality operation and abilities, and one part proposed the participants, such as communication and absorptive capacity, or the strength of association between the sender and the receiver; the other study focused on external conditions, such as knowledge characteristics, knowledge stock, knowledge structure, communication paths, and contextual factors [39,71,107,112]. Few scholars put the “power relationship” between parent and subsidiary companies together, which is the reason for the current research. According to Hofstede’s cultural theory, it was found that China is a country with high power distance. (https://www.geert-hofstede.com/ (accessed on 20 September 2022)). Therefore, for the knowledge transfer research of Chinese MNCs, “power” is a research object that cannot be avoided. In the current research, the firm-level factors include subsidiary autonomy (the degree of the parent company delegated power) [113], subsidiary position (the degree of subsidiary importance) [50], and organizational trust (the degree of connection in organizations) [114].
The research on the internal knowledge transfer of MNCs is bound to be more affected by internal factors [115]. Firm level factors represent a pretty significance (β = 0.166, p = 0.010); of course, this is directly related to the object of the present research. Indeed, HQ wants to have a greater say and subsidiaries need autonomy and flexibility, and this requires a stronger balance to establish relationships [18]. However, as introduced in the country-level section, the powerful internal mechanism of Chinese MNCs not only effectively avoids external influences from different national backgrounds, but also allows various companies within the cooperation to maintain a high degree of unity. Unlike studying the “ability” of both participants in previous research, the impact of the power distribution can become a new way of thinking in the future.

5.3. Individual-Level Factors

In the process of transferring knowledge and the development of MNCs, individuals obviously play various roles. Firstly, the transferred knowledge has many characteristics [116]. As we all know, the transfer of explicit knowledge is relatively simple, while the opposite is true of tacit knowledge. Tacit knowledge is rooted in professionals, and it requires the frequent movement of employees and contacts or meetings to be effectively transferred [117]. These employees who express tacit knowledge in more detail and more accurately are dispatched to various countries and transfer knowledge between companies to ensure the flow of knowledge in the system.
Moreover, the expatriation stems from the need of parent company for support and control of its subsidiaries [50]. Expatriates are responsible for the communication between the organizations of MNCs: on the one hand, they can bring the strategic thinking and management philosophy of the parent company to the subsidiary; on the other hand, with long-term overseas work experience, they know enough about the subsidiaries and can return the information to the parent company in time. It can be said that expatriates are a bridge for communication between the companies of MNCs [118].
It coincides with the conclusion of the current research that expatriates or individuals (β = 0.430, p = 0.000) with business experience can effectively promote the knowledge transfer process and have a positive impact on knowledge transfer efficiency in Chinese MNCs. Moreover, it confirms the special power mechanism of Chinese MNCs that allows expatriates to have power blessings from the head office, which makes it more convenient for expatriates to perform the work of knowledge transfer.

5.4. Moderator-Cultural Intelligence

The concept of cultural intelligence was formed in global multiculturalism, which refers to the ability to adapt and work effectively in an unfamiliar environment or a culturally diverse environment [119]. In recent years, it has been recognized by researchers that cultural intelligence plays a vital role in successful cross-cultural communication and alleviating organizational complexity [116,117]. Most of them use this quality to measure managers and think that management personnel with such qualities can have enough of an effect on knowledge transfer [120,121,122,123]. The previous research proved that cultural intelligence does have an impact on knowledge transfer; however, as geographic distance expands, it cannot be completely mitigated by the ability of the manager to deal with cultural differences. Cultural intelligence is the ability of people or organizations to deal with different cultures calmly [95], in general, and it may enable employees to integrate into a different cultural environments as soon as possible, which, indeed, has a positive effect on some business activities. However, as far as objective things such as knowledge are concerned, individual abstract cultural intelligence cannot play an effective moderating role, and it was tested in this study (β = −0.027, p = 0.389).

6. Conclusions

The empirical research results in this study have helped us find the factors to improve the efficiency of knowledge transfer, and based on the conclusions, they could refer to investment. The findings of the study suggest that, although the factors of the country-, firm-, and individual-level impact knowledge transfer efficiency, Chinese MNCs could be overcome through their stable internal systems and targeted human resource management. Moreover, it builds a theoretically grounded and empirically spatial model, including the tacit factors that impact knowledge transfer efficiency, which fulfills the research of knowledge management in Chinese MNCs and encourages further researchers to continue the related research.
First of all, in terms of methodology design, the selection of samples may add MNCs from other countries for comparison, especially the comparison between Eastern and Western countries. In the research framework, the analysis modes of macro, medium, and micro are extremely applicable. This spatial perspective can be applied to many research fields, not just knowledge transfer efficiency in MNCs. In terms of research content, in particular, some conclusions obtained in this research are contrary to previous research and conventional cognition. While showing the uniqueness of China, it also provides some new models and perspectives for studying Chinese MNCs.
This study only intercepts the knowledge transfer efficiency of Chinese MNCs for research, and it is only the tip of the iceberg in the study of China. China has a unique cultural and economic development model, and its development increasingly affects the changes in the world economic structure. Chinese MNCs are also powerful promoters of this result, and the research on Chinese MNCs has far-reaching significance for the future.

Author Contributions

Visualization, G.J. and W.L.; Writing—original draft, J.C.; Writing—review & editing, Q.I. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Data available on request.

Conflicts of Interest

The authors declare no conflict of interest.

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Figure 1. Theoretical Framework.
Figure 1. Theoretical Framework.
Sustainability 14 14074 g001
Table
Table 1. Means and standard deviations of the study variables.
Table 1. Means and standard deviations of the study variables.
VariablesMeanStandard Deviation
CF4.55071.1046
FF4.49951.1784
IF4.89781.2537
KTE4.67811.0865
CI4.85441.1673
KTE = knowledge transfer efficiency; CF = country-level factors; FF = firm-level factors; IF = individual-level factors; CI = cultural intelligence.
Table
Table 2. Measurement Model.
Table 2. Measurement Model.
VariablesConstructItemLoadingsαCRrho_AAverage
Variance
Extracted, AVE
Knowledge
Transfer Efficiency (KTE)		 KTE10.8210.8620.8930.8840.549
KTE20.797
KTE30.804
KTE40.809
KTE50.609
KTE60.619
KTE70.65
KTE80.617
Country-level
Factors (CF)		Regulative Distance
(RD)		RD1Deleted0.9210.9310.9220.561
RD20.848
RD30.867
RD40.775
Normative Distance (ND)ND1Deleted
ND20.874
ND30.81
ND40.844
Cognitive Distance (CD)CD10.825
CD20.89
CD30.9
CD40.875
Firm-level Factors (FF)Subsidiary
Autonomy (SA)		SA1Deleted0.9120.930.9150.656
SA20.95
SA30.953
Subsidiary Position
(SP)		SP10.895
SP20.914
SP30.83
Organizational Trust
(OT)		OT1Deleted
OT20.938
OT30.926
Individual-level Factors
(IF)		Job Performance
(WP)		JP10.8830.8780.9250.8840.804
JP20.886
JP30.92
TimeTI1
PositionPI1
Cultural
Intelligence
(CI)		 CI1Deleted0.9150.9310.9190.629
CI20.915
CI3Deleted
CI40.889
Cronbach’s α = α; composite reliability = CR.
Table
Table 3. Discriminant validity results.
Table 3. Discriminant validity results.
CIKTECFFFIF
CI
KTE0.817
CF0.6200.713
FF0.6680.750.875
IF0.6610.8320.5950.586
Table
Table 4. Results of hypotheses testing.
Table 4. Results of hypotheses testing.
HypothesisRelationshipΒ—Coefficientt-Statisticsp-ValueResults of
Hypotheses Testing
H1CF → KTE0.091.438 (ns)0.151Not supported
H2FF → KTE0.1662.564 *0.010Supported
H3IF → KTE0.4307.346 **0.000Supported
H4CI → IF-KTE−0.0270.862 (ns)0.389Not supported
p < 0.001 **, p < 0.05 *, ns = not significant.
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Cheng, J.; Iqbal, Q.; Ji, G.; Li, W. A Sustainable and Comprehensive Framework for Knowledge Transfer in MNCs: An Empirical Examination Based on Country, Company and Individual Levels of Chinese MNCs. Sustainability 2022, 14, 14074. https://doi.org/10.3390/su142114074

AMA Style

Cheng J, Iqbal Q, Ji G, Li W. A Sustainable and Comprehensive Framework for Knowledge Transfer in MNCs: An Empirical Examination Based on Country, Company and Individual Levels of Chinese MNCs. Sustainability. 2022; 14(21):14074. https://doi.org/10.3390/su142114074

Chicago/Turabian Style

Cheng, Junshuai, Qaisar Iqbal, Guangmeng Ji, and Weichun Li. 2022. "A Sustainable and Comprehensive Framework for Knowledge Transfer in MNCs: An Empirical Examination Based on Country, Company and Individual Levels of Chinese MNCs" Sustainability 14, no. 21: 14074. https://doi.org/10.3390/su142114074

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