Abstract
Emerging economies are low-income, high-growth nations that employ economic liberalization to foster development and contribute significantly to the global economy. Multinational companies (MNCs) are drawn to these markets, partnering with local firms to access resources and knowledge, thereby enhancing their financial performance. The challenge lies in effectively transferring knowledge while safeguarding strategic assets.There are two critical theoretical gaps in extant literature. First, there are conflicting findings regarding the consequences of interfirm knowledge transfer in international alliances within emerging markets. Second, there's a lack of research at multiple levels with a micro foundation-base to deep understanding knowledge transfer, which is influenced by factors at various levels, including individual, firm, interfirm, industry, and country levels.To address these gaps, the study poses the fundamental question: Is it safe for MNCs to selectively share knowledge with local firms in international alliances in emerging economies? This overarching question is broken down into specific inquiries across different levels:Firstly, examining the impact of formal and informal knowledge-sharing and protection mechanisms on interfirm knowledge transfer and leakage.Question 1: How do formal and informal sharing and protection mechanisms influence selective knowledge transfer at the interpersonal level?Question 2: How does selective knowledge transfer at the interpersonal level aggregate to influence knowledge transfer at the interorganizational level?Secondly, investigating the evolving dynamics of the relationship between MNCs and local firms following selective knowledge transfer.Question 3: How do the relative positions of MNCs and local firms change after selective knowledge transfer in their collaborations?The empirical research is conducted within Vietnam's IT industry, focusing on a long-term partnership between a global IT leader and the largest IT firm in Vietnam. The study explores the relative positions of the MNC and local firm before and after a knowledge transfer project, examines antecedents and interpersonal knowledge processes through eight embedded cases in the knowledge transfer project, and investigates the transformation of individual knowledge into organizational knowledge in both MNCs and local firms through two embedded cases.The research findings underscore that various factors, including joint task structure, team relations, knowledge stock, and employee motivations, serve as constraints on the outcomes of interpersonal knowledge transfer. The study also demonstrates the effective assimilation of knowledge by local firms from MNCs, whereas MNCs encounter challenges in integrating local knowledge into their organizational processes. Importantly, the overall relationship between MNCs and local firms does not undergo significant changes following knowledge transfer due to the persistence of knowledge gaps. MNCs continue to introduce new knowledge, while local firms maintain their strong local relationships and adaptability.In conclusion, this research makes a substantial contribution to the understanding of knowledge transfer in international alliances, particularly within emerging economies. The findings carry both theoretical implications for multilevel knowledge transfer research and practical insights for managers engaged in knowledge sharing within international collaborations in emerging markets. Overall, this study sheds light on the intricate dynamics of knowledge transfer and its impact on the bargaining power and competitive positions of firms in emerging economies.