MNCs Innovation, Reverse Knowledge Transfer and Firm Absorptive Capacity

Organizational innovation is one of the main tools for attaining a competitive advantage. Multinational corporations operate in different countries may capture new knowledge from diverse markets, customers or suppliers. This paper focuses on the knowledge transfer from the subsidiaries to the headquarters (knowledge transfer reverse). Furthermore, we try to analyse how this transferred knowledge facilitates the generation of innovations. Its study has demanded the analysis of the mediator role of absorptive capacity. Our results show that reverse knowledge influences indirectly on the headquarters' innovation trough the existence of an absorptive capacity. Several conclusions and managerial implications are derived.