The underdetermined knowledge-based theory of the MNC

Fransson, A., Hakanson, L. and Liesch, P. (2010). The underdetermined knowledge-based theory of the MNC. In: Proceedings of the 36th European International Business Academy (EIBA). 36th EIBA Annual Conference, Porto, Portugal, (). 9-11 December 2010.

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Author Fransson, A.
Hakanson, L.
Liesch, P.
Title of paper The underdetermined knowledge-based theory of the MNC
Conference name 36th EIBA Annual Conference
Conference location Porto, Portugal
Conference dates 9-11 December 2010
Proceedings title Proceedings of the 36th European International Business Academy (EIBA)
Place of Publication Brussels, Belgium
Publisher European International Business Academy (EIBA)
Publication Year 2010
Sub-type Fully published paper
Open Access Status
Total pages 14
Language eng
Abstract/Summary This paper revisits two core propositions in the knowledge-based view of the firm propounded in the seminal work by Kogut and Zander (1993): (a) that MNCs exist because transfers and re-combinations of knowledge occur more efficiently inside MNCs than between MNCs and third parties, and (b) the threat of opportunism is not necessary (although it may be sufficient), to explain the existence of the MNC. We question these conclusions, arguing that firms are only one of many types of ‘epistemic communities’ possessing and nurturing procedural norms, identity, and the cognitive, linguistic and reflexive attributes conducive to efficient exchange and recombination of knowledge. Through their ability to attenuate opportunism, the existence of non-firm epistemic communities has interesting implications not only for the knowledge-based view but also for the applicability of transaction cost economics in the analysis of the scope of the firm.
Keyword Theory of the MNC
pistemic communities
transaction cost economics
Q-Index Code E1
Q-Index Status Provisional Code
Institutional Status UQ
Additional Notes Presented at session: 6.1. Knowledge management and innovation in MNEs (Competitive). Subsequently published in Journal of International Business.

Document type: Conference Paper
Collection: UQ Business School Publications
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Created: Wed, 02 Mar 2011, 14:34:39 EST by Karen Morgan on behalf of UQ Business School