Antecedents in the Creation of Subsidiary Absorptive Capacity The Role of Expatriate Human and Social Capital

This paper develops a conceptual model that investigates the role that expatriates play in local subsidiaries in the creation of knowledge-related capabilities in Multinational Corporations (MNCs). The theoretical mediated model identifies important constructs that will influence the likelihood of the creation of subsidiary absorptive capacity. We recommend that individual level antecedents be considered before a company decides to expand overseas this includes both expatriate human capital (communication skills, previous international experience, motivation, and feedback seeking behavior) and expatriate social capital within the MNC and subsidiary (both number and strength of social ties). We argue that these capabilities need to be explicitly recognized and integrated with the goal of competence creation at the subsidiary level and ultimately the transfer of knowledge. Furthermore, we discuss the importance of local national culture on the relationship between expatriates social capital and absorptive capacity creation. We argue that the expatriate's role is not only important for transferring knowledge from headquarters to subsidiaries, but also for their strategic role in MNC learning in which they integrate existing knowledge with local new knowledge in the subsidiary.