How foreign knowledge spillovers by returnee managers occur at domestic firms: An institutional theory perspective

Instead of treating the spillover process as a black box, this paper conducts a qualitative study of foreign knowledge spillovers by returnee managers at Chinese firms. Unlike mainstream spillover studies which adopt economics approaches, this paper uses an institutional theory perspective and regards returnee managers as boundary spanners. Results show that returnee managers' boundary-spanning activities in the form of social interaction, including building relationships with colleagues and transforming their identities from outsiders to insiders, help gain legitimacy for their new roles. Their boundary-spanning activities in the form of grafting foreign knowledge, including understanding existing knowledge resources, introducing foreign knowledge to colleagues, and integrating foreign knowledge with domestic firms, help gain legitimacy for foreign knowledge. Foreign knowledge' contributions in new product development at product, process, and cultural perspective levels reinforce its institutionalization at domestic firms. Absorptive barriers include domestic firms' administrative heritage and returnee managers' arduous relationship with others.