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TABLE OF CONTENTS ABSTRACT ABSTRAK ACKNOWLEDGEMENTS APPROVAL DECLARATION TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES LIST OF ABBREVIATIONS

CHAPTER 1 - INTRODUCTION 1.1 Introduction 1.2 Background of Study 1.2.1 Technology Transfer and International Joint Ventures (IJVs) 1.3 Problem Statement 1.4 The Research Questions 1.5 The Study Objectives 1.6 Significance of Study 1.6.1 Theory Advancement 1.6.2 Policy and Practice 1.7 Operational Definitions of Key Terms 1.8 Organization of the Thesis 2 - LITERATURE REVIEW 2.1 Introduction 2.2 The Definition and Concept of Technology 2.2.1 Discussion 2.3 Defining the Concept of Technology Transfer 2.3.1 Discussion 2.3.2 Technology Transfer and Knowledge Transfer 2.4 Approaches to Technology Transfer 2.4.1 The Traditional Models of Technology Transfer 2.4.2 Technology Transfer Models After 1990s 2.4.3 Discussion 2.5 Theoretical Foundation of Study 2.5.1 Knowledge-Based View Perspective and Technology Transfer 2.5.2 Organizational Learning Perspective and Technology Transfer 2.5.3 Discussion 2.6 A Review on the Factors Influencing Inter-Firm Technology Transfer 2.6.1 Knowledge Characteristics (KCHAR) 2.6.2 Technology Recipient Characteristics (TRCHAR) PAGE ii iv vi vii ix x xiv xv xvi

1 1 6 11 15 15 16 16 23 25 31

33 33 38 38 42 42 44 45 50 56 57 59 68 78 79 79 80

2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14

2.6.3 Technology Supplier Characteristics (TSCHAR) 2.6.4 Relationship Characteristics (RCHAR) 2.6.5 Discussion Relationships between KCHAR and Degree of Technology Transfer (TTDEG) Relationships between TRCHAR and TTDEG Relationships between TSCHAR and TTDEG Relationships between RCHAR and TTDEG Degree of Technology Transfer (TTDEG) Relationship between TTDEG and Local Firms Performance (LFP) Moderating Variables Chapter Summary

80 81 81 83 93 106 116 125 128 130 136

3 - CONCEPTUAL FRAMEWORK 3.1 Introduction 3.2 Theories Underpinning the Conceptual Framework 3.3 The Studys Conceptual Framework 3.4 Hypotheses Development 3.5 Chapter Summary 4 - RESEARCH METHODOLOGY 4.1 Introduction 4.2 The Research Design 4.3 Population and Unit of Analysis 4.4 Sample Size and Power Analysis 4.5 Sampling Procedures 4.6 Non Response Issues 4.7 Sampling Type 4.8 Questionnaire Design and Instrumentation 4.9 Va1idity and Measurement of Variables 4.10 Pilot Study 4.11 Reliability 4.12 Data Collection Methods 4.13 Data Analysis Procedures 4.13.1 Data Screening and Cleaning 4.13.2 Descriptive Analysis 4.13.3 Correlation Analysis 4.13.4 Multiple Regressions Analysis 4.13.5 Inferential Analysis 4.13.6 Testing Goodness of Data 4.14 Exploratory Data Analysis - Test of Normality 4.14.1 The Kolmogorov-Smirnov Statistic of Normality Test 4.14.2 The Levenes Test of Homogeneity of Variance 4.14.3 The Skewness and Kurtosis Values 4.14.4 The Graphical Examination 4.14.5 The Collinearity Test 4.15 Chapter Summary

138 138 139 141 157

158 158 159 160 165 169 171 172 173 182 183 185 185 186 187 187 188 189 191 194 196 197 197 198 199 200

5 - FINDINGS AND DISCUSSIONS 5.1 Introduction 5.2 Profile of Respondents 5.2.1 Organizations Profile - JV Industry and JV Size 5.2.2 Organizations Profile - JV Industry and Age of JV 5.2.3 Organizations Profile - JV Industry and Foreign Equity 5.3 Relationship between KCHAR and TTDEG 5.3.1 Relationships between KCHAR and Dimensions of TTDEG 5.3.2 Relationships between Dimensions of KCHAR and TTDEG 5.4 Relationship between TRCHAR and TTDEG 5.4.1 Relationships between TRCHAR and Dimensions of TTDEG 5.4.2 Relationships between Dimensions of TRCHAR and TTDEG 5.5 Relationship between TSCHAR and TTDEG 5.5.1 Relationships between TSCHAR and Dimensions of TTDEG 5.5.2 Relationships between Dimensions of TSCHAR and TTDEG 5.6 Relationship between RCHAR and TTDEG 5.6.1 Relationships between RCHAR and Dimensions of TTDEG 5.6.2 Relationships between Dimensions of RCHAR and TTDEG 5.7 Predictors of TTDEG - A Holistic Model 5.7.1 Predictors of TTDEG - The Second TTDEG Model 5.8 Relationship between TTDEG and LFP 5.8.1 Relationships between TTDEG and Dimensions of LFP 5.9 On the Moderating Effects of MNCs Size (MNC SIZE), Age of JV (JVAGE), MNCs Country of Origin (MNCCOO), and MNCs Types of Industry (MNCIND) 5.9.1 The Moderating Effect of MNCSIZE 5.9.2 The Moderating Effect of JVAGE 5.9.3 The Moderating Effect of MNCCOO 5.9.4 The Moderating Effect of MNCIND 5.10 Summary of Hypothesis Testing 5.11 Chapter Summary 6 - CONCLUSIONS 6.1 Introduction 6.2 Summary of Findings 6.3 Contributions of Study 6.4 Implications for Policy and Practice 6.4.1 The Managerial Implications 6.4.2 The Organizational Implications 6.5 Limitations of Study 6.6 Recommendations for Future Research BIBLIOGRAPHY LIST OF APPENDICES

202 202 203 204 204 205 206 210 214 214 218 221 222 224 227 228 231 234 239 245 246 249 252 258 263 269 274 277

279 279 298 302 302 305 308 311 314 341

APPENDICES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I Appendix J Results of Power Analysis - Test 1 Results of Power Analysis - Test 2 Cover Letter for Questionnaire Letter by the Graduate School of Management, UPM The Questionnaire Results of Reliability Test Results of Descriptive Test Results of Pearson Correlation Coefficients Analysis Results of Multiple Linear Regression Analysis Results of Moderated Multiple Regression (MMR) Analysis

BIODATA OF CANDIDATE

LIST OF TABLES TABLE 1.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 FDIs in the Manufacturing Sector The Response Rate Results of T-Test in Determining Differences between the Respondent and Non Respondent The Constructs and Sources of the Scale The Results of Cronbach Alpha Tests Summary of the Research Questions, Hypotheses, Types of Scale, and Statistical Tests Used The Kolmogorov-Smirnov Statistic of Normality Test The Levenes Test of Homogeneity of Variance for Local Firms Performance Variable on MNCs Population Size The Skewness and Kurtosis Values of Descriptive Statistics The Test for Collinearity of Local Firms Performance JV Industry and JV Size JV Industry and Age of JV JV Industry and Foreign Equity Pearson Correlation Coefficients of Technology Transfer Characteristics (TTCHARS) and TTDEG and its Dimensions Pearson Correlation Coefficients of Dimensions of TTCHARS and TTDEG Estimates of Coefficients for the Main TTDEG Model The Multicollinearity Diagnostic for the Main TTDEG Model Estimates of Coefficients for the Second TTDEG Model The Multicollinearity Diagnostic for the Second TTDEG Model Pearson Correlation Coefficients of TTDEG and LFP and its Dimensions Model Summary - MNCSIZE Coefficients Table - MNCSIZE Model Summary - JVAGE Coefficients Table - JVAGE Model Summary - MNCCOO Coefficients Table - MNCCOO Model Summary - MNCIND Coefficients Table- MNCIND Summary of Hypotheses Testing PAGE 2 167 171 174 184 194 196 197 198 199 203 204 205 206 210 235 236 241 242 245 252 253 258 259 263 264 269 270 274

LIST OF FIGURES FIGURE 2.1 2.2 2.3 2.4 3.1 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 6.1 6.2 Technology Transfer at Three Levels of Involvement Four Levels of Knowledge and Technology Transfer The Technology Transfer Process Framework Knowledge Management in JV The Conceptual Framework of TTCHARS-TTDEG-LFP in IJV The Normal P-P plot of the Regression Standardized Residual for Main Model The Scatterplot of Standardized Predicted Values vs. Observed Values for Main Model The Normal P-P plot of the Regression Standardized Residual for Second Model The Scatterplot of Standardized Predicted Values vs. Observed Values for Second Model Slopes for TTDEG on TTCHARS for MNCSIZE Slopes for TTDEG on TTCHARS for JVAGE Slopes for TTDEG on TTCHARS for MNCCOO Slopes for TTDEG on TTCHARS for MNCIND The Holistic Inter-Firm TT Model of TTCHARS-TTDEG-LFP The Second Inter-Firm TTDEG Model PAGE 51 53 55 77 140 237 237 243 243 255 261 266 272 300 301

LIST OF ABBREVIATIONS ACAP CEO COMPLX CPERF EDA EXPK FDI FMM GM GSM HRM HRPERF ICV IJV IMP JV JVAGE KBV KCHAR KCHARQ KT LFP LFPQ MD MI MIDA MITI MLR MMR MNCs MNCCOO MNCIND MNCSIZE MT OL OLS PPROTEC RBV RCHAR RCHARQ RCOL RELQLTY Absorptive Capacity Chief Executive Officer Complexity Corporate Performance Exploratory Data Analysis Degree of Explicit Knowledge Foreign Direct Investment Federation of Malaysian Manufacturers General Manager Graduate School of Management Human Resource Management Human Resource Performance International Cooperative Venture International Joint Venture Industrial Master Plan Joint Venture Age of Joint Venture Knowledge-Based View Knowledge Characteristics Knowledge Characteristics Questionnaire Knowledge Transfer Local Firms Performance Local Firms Performance Questionnaire Managing Director Manufacturing Industry Malaysian Industrial Development Authority Ministry of International Trade and Industry Multiple Linear Regression Moderated Multiple Regression Multinational Corporations MNCs Country of Origin MNCs Industries Size of MNCs Mutual Trust Organizational Learning Ordinary Least Square Partner Protectiveness Resource-Based View Relationship Characteristics Relationship Characteristics Questionnaire Recipient Collaborativeness Relationship Quality

R&D ROC ROI SD SI SPEC SPSS TCT TCTK TRANSCAP TT TTDEG TTDEGQ TTCHARS TRCHAR TRCHARQ TSCHAR TSCHARQ U.S 9th MP

Research and Development Registrar of Companies Return on Investment Standard Deviation Service Industry Specificity Statistical Package for the Social Science Tacitness Degree of Tacit Knowledge Transfer Capacity Technology Transfer Degree of Technology Transfer Degree of Technology Transfer Questionnaire Technology Transfer Characteristics Technology Recipient Characteristics Technology Recipient Characteristics Questionnaire Technology Supplier Characteristics Technology Supplier Characteristics Questionnaire United States The Ninth Malaysia Plan

CHAPTER 1

INTRODUCTION

1.1 Introduction This chapter provides a brief account of the study beginning with the background of the study followed by an overview of inter-firm technology transfer (TT) via international joint ventures (IJVs). Next, this chapter presents the problem statement, research questions and objectives of the study followed by the significance of research and operational definitions of key terms. The organization of the study is presented at the end of this chapter.

1.2 Background of Study For the past three decades, Malaysia has experienced tremendous economic growth which transformed the agriculture or resource-based economy into an industrial economy (The Ninth Malaysia Plan, 2006). Intensified efforts by the Malaysian government have gradually turned the national economy from labor intensive to capital intensive. The growth of Malaysias economy is mainly backed by the early success in developing its industrial sectors through direct import of low technologies especially from United States (U.S), Japan and Europe (Ministry of International Trade and Industry (MITI), 2004). With the transformation of the national economic policy, the Malaysian government is determined to develop its industrial sector to boost the national economy. As a result, this policy has attracted many foreign investors to invest in Malaysia through foreign direct investments (FDIs). 1

During 1996-2005, the total FDI inflows are registered at RM121.8bn as compared to RM73.4bn in 1986-1995 (The Third Industrial Master Plan, 2005). FDIs in terms of value of fixed asset of foreign-owned firms have increased from RM43.8bn in 1996 to RM68.2bn in 2002, an increase of 39%; and for the same period FDIs account for 14.5% of the GDP growth as compared with private domestic investments which is 26.8% (Third Industrial Master Plan, 2005). Thus, FDIs are expected to assume its significant role as the main source of foreign technology in generating the countrys growth. In 2006 (Table 1.1), FDIs in the Malaysian manufacturing sector have increased from RM13.65bn in 2005 to RM14.7bn in 2006 (MIDA, 2007). Table 1.1: Foreign Direct Investment in the Manufacturing Sector
Country Japan Netherlands Australia USA Singapore 2006 RM4.4 billion RM3.3 billion RM2.6 billion RM2.5billion RM1.9billion 2005 RM3.7billion RM1.7billion RM155.9million RM5.2billion RM2.9billion

(Source: Malaysian Industrial Development Authority (MIDA), 2007)

In the context of a developing country, technology is viewed as an important catalyst of corporate success and national economic growth (Millman, 2001). Due to lack of resource capacities such as weak research and development (R & D) base, limited investment in R&D, production and manufacturing capability, weak infrastructure and technological disadvantage (Lado and Vozikis, 1996; Tepstra and David, 1985), Malaysia like other developing countries, depends mainly on FDIs from the multinational corporations (MNCs) as its 2

primary source of technology to enhance the technological capabilities and competitiveness of local industries (Lee and Tan, 2006). This is because MNCs own, produce and control the bulk of world technology in which they undertake nearly 80% of all private R&D expenditures worldwide (Dunning, 1993).

Therefore, to realize its aspiration to become an industrialized and developed nation in 2020, Malaysia must develop and sustain its own technology through appropriate TT strategies and initiatives. Through the Third Industrial Master Plan 2006-2020, Malaysia aims at leveraging the countrys existing strength and resources to enhance its competitiveness and resilience to achieve global competitiveness. On the other hand, The Ninth Malaysian Plan 2006-2010 stresses on the importance of developing human capital to strengthen the countrys technological capability and capacity to support local innovation through knowledge acquisition and utilization (The Ninth Malaysian Plan, 2006).

In order to achieve this primary objective, foreign technologies are greatly needed by Malaysian firms and industries to build their technological capacity, strengthen their core competencies and expand into technological fields that are critical for maintaining and developing market share (Wagner and Yezril, 1999). Realizing the need for foreign technologies in Malaysia, the MITI has accelerated the imports of technology, especially explicit technology, by focusing on investments in high value-added and technology intensive industries since 1995. From January 1995 to August 2001, MITI has approved a total of 779 technical and technology agreements of which 429 were technical assistance

agreement, 172 licensing and patent agreements, 74 trade mark agreements, 27 service agreements, and 26 know-how agreements (MITI, 2004).

Between this period (1995-2000), the payment for technology acquisition royalties and fees for procurement of the franchises, use of international brand names, and procurement of license for the utilization of new and improved technologies increased from RM932 million to RM1.6 billion in 2001. Japan was the major source of technology with 443 technical/technology agreements approved, followed by the USA (120), Germany (57), Singapore (24), Korea (18), France (16), Taiwan (13), Australia (13), Switzerland (11), and Netherland (5) (MITI, 2004).

Past studies have acknowledged the important role of MNCs as the main source of technology. MNCs are regarded as the most efficient vehicle for transferring technology and knowledge across organizational borders through FDIs and IJVs (Tihanyi and Roath, 2002; Kagut and Zander, 1993). Past literature also shows that those foreign MNCs in Malaysia have successfully transferred their technology to local industries (Lai and Narayanan, 1997, Narayanan and Lai, 2000).

The technologies transferred by MNCs benefit the host country in terms of achieving long term economic growth (Marton, 1986; Blomstrom, 1990), providing a higher potential of innovation performance/capabilities (Guan, Mok, Yam and Pun, 2006; Kotabe, DunlapHinkler, Parente and Mishra, 2007)), increasing technological capabilities (Kumar, Kumar and Persaud, 1999; Madanmohan, Kumar and Kumar, 2004), enhancing the organizations

competitive advantage (Liao and Hu, 2007; Rodriguez and Rodriguez, 2005), enhancing the organizational learning effectiveness (Inkpen, 2000; Inkpen and Dinur, 1998), providing a positive effect on productivity (Caves, 1974; Xu, 2000; Liu and Wang, 2003), and increasing the technological development of local industry (Markusen and Venables, 1999). Other research studies have proposed TT as one mechanism by which developing countries can break the vicious cycle of economic underdevelopment (Lado and Vozikis, 1996; Samli, 1985). From the TT initiatives, the host-country will also benefit in terms of improving quality of life, technology progression through research and development, and higher tax revenue. For the MNCs, the benefits are in terms of more equitable trade agreements, global expansion and increase in market share (Madu, 1989).

Recent studies have argued that although TT through FDIs, JVs, and licensing operations have significantly contributed to the impressive economic growth performance in Malaysia, however, these TT agents have not succeeded in developing the indigenous innovation capabilities (Malairaja and Zawdie, 2004). The international TT through FDIs do not sufficiently help to develop indigenous capabilities during the Asian economic crisis in 19971998 which made the host country economy vulnerable to changes in investors sentiment and foreign competitions (Lee and Tan, 2006). Thus, learning from the economic crisis, the host countries have no alternative but to re-strategize their TT policies and strategies by first understanding and identifying the critical determinants/factors that may have significant influence on TT implementation. TT by MNCs should not only act as an efficient vehicle to generate economic growth performance but more importantly it must also be capable of developing indigenous capabilities and organizational competitiveness.

Prior to formulating the appropriate TT strategies and policies, there is a need to critically examine the technology transfer characteristics (TTCHARS) that may have significant influence on the successful and effective implementation of TT particularly technologies transferred through IJVs. In this context, the success of TT is determined by the amount of technology transferred (level of TT) and the technological capacity to absorb, assimilate, improve and further develop the newly acquired technology (Madanmohan et al., 2004).

Most of previous literatures have focused more on the macro-economic or institutional factors (Contractor and Sagafi-Nejad; 1981, Marton; 1986). Examining the factors that influence TT becomes more important due to the diverse environmental factors which impede TT success (Cui, Griffith, Casvugil and Dabic, 2006). Since TT literature is extensive and varied in perspective, the focus of this study is specifically on inter-firm TT across organizational boundaries via IJVs based on the underlying knowledge-based view of the firm (KBV) and organizational learning (OL) perspectives. Thus, while appreciating the significance of various other perspectives of TT, however, they are indeed beyond the scope of this study.

1.2.1 Technology Transfer (TT) and International Joint Ventures (IJVs) Other than direct export of goods/products, FDIs and licensing, another form of formal and externalized mechanism of TT is through international joint ventures (IJVs) formed between foreign MNCs and local firms (Maskus, 2003). IJVs have been described as a form of international cooperative which bring together two or more firms to engage in a joint activity to which each member contributes resources with expectation to extract resources of higher

value (Beamish and Bedrow, 2003). JVs are also viewed as a collaborative effort by MNCs and local partners to share their individual resources, skills and expertise (Ibrahim and Mcguire, 2001).

From the cognitive perspective, few studies have considered IJVs as information processing unit, where the extent of amount of knowledge acquired in IJV depends on the complexity of knowledge to be acquired and the IJVs cognitive capabilities (Lane and Lubatkin, 1998; Simonin, 1999a; Lane, Salk and Lyles, 2001; Simonin, 2004). Many of the social perspective studies emphasize on the relationship and trust between the IJV partners; where knowledge underlying technology is embedded not only in the capabilities but also in the social relationships between the IJV partners (Dhanaraj, Lyles, Steensma and Tihanyi, 2004; Inkpen and Currall, 2004; Grandori and Kogut, 2002; Kogut and Zander, 1992).

When compared to various forms of strategic alliance such as distribution and supply agreements, research and development partnerships or technical and management contract, IJVs are considered as the most efficient formal mechanism for TT to occur through interpartner learning between foreign MNCs and local firms (Kogut and Zander, 1993; Inkpen 1998a, 2000). Learning in IJVs is being regarded as a means of knowledge acquisition and gaining collaborative know-how and collective experience (Liu and Vince, 1999; Hau and Evangelista, 2007).

IJVs are viewed as the most efficient mode to transfer technology or knowledge which is organizationally embedded and difficult to transfer through licensing agreements (Kogut,

1988; Mowery, Oxley and Silverman, 1996). Knowledge, as an important element underlying technology, can be learned and transferred between IJV partners. IJVs provide both MNCs and local partners an appropriate vehicle to facilitate the transfer of organizational knowledge, particularly for knowledge which is hard to be transferred without the setting up of a JV such as institutional and cultural knowledge (Harrigan, 1984).

Other studies have argued that JV is appropriate when technology can be easily learned and diffused to local partners who possess sufficient skills and expertise to manage the imported technologies (Lado and Vozikis, 1996; Zander and Kogut, 1995). JVs allow the MNCs and local partners to 1) share their different skills and knowledge bases in creating unique learning opportunities for both parties (Inkpen, 1998a), 2) access knowledge which is not yet widely distributed or exploited (Zack, 1999), and 3) provide learning opportunities and potentials for value creation (Berdrow and Lane, 2003).

Past studies have identified the motives that lead the MNCs and local firms to form IJVs. MNCs tend to embark on strategic alliance especially JVs for various reasons, such as to achieve economic goals by reducing investment risks, to learn and share technological knowhow and management expertise, to improve operational efficiency, to enhance market power, and to strengthen global competitiveness (Caves, 1996; Harrigan, 1988a; Perlmutter and Heenan, 1986; Lin, Yu and Seetoo, 1997; Calantone and Zhao, 2000; Nicholas and Pincell, 2001).

Studies have also acknowledged that local firms can contribute knowledge and information with respect to local economic condition, political stability, cultural differences, business customs, customers preference and taste, local work force, distribution channels, infrastructure and information on raw material supplies in the host countries (Shrader, 2001; Ibrahim and Mcguire, 2001). In exchange, MNCs may transfer their technological knowhow, managerial expertise and other intangible assets. MNCs would prefer JVs with local firms if the inherent advantages exist such as the ability to create niches in the foreign market early, the possibility to enjoy favorable treatment in terms of lower taxes, duties and easy transfer of profit back to home countries (Ibrahim and Mcguire, 2001). The local firms in the developing countries would prefer JVs as they provide opportunities to participate in the management and control of the venture, to gain the technological and managerial skills, and to have opportunity to share the ventures profit (Ibrahim and Mcguire, 2001).

However, studies have viewed MNCs as having the upper advantage by bringing their superior technology and knowledge to foreign markets (Kogut and Zander, 2003; Beamish and Berdrow, 2003). IJVs in the developing countries have been construed as having high instability rate and less managerial satisfaction than IJVs in the developed countries (Beamish, 1985). Asymmetrical learning pattern in alliances in the developing countries have become the main focus of the MNCs (Tsang, 1999). The IJVs success in developing countries has frequently been measured in terms of the degree of knowledge transferred to local partner and the synergy that arises from the JVs formation (Si and Bruton, 1999).

Learning in IJVs is mostly a one-way learning process; where MNCs from the developed countries perceived themselves as superior in technology and management than their counterpart thus having little to learn from the local partners (Liu and Vince, 1999; Danis and Parkhe, 2002). Technology and knowledge transfer from parents to JVs are mostly ineffective because cross-border knowledge spirals can be time consuming (Simonin, 1991).

Past studies have affirmed JVs as an effective channel of TT (Kogut, 1988; Mowery et al., 1996). Moeini and Zawdie (1998) observe that JVs are more successful than the other forms of channels in bridging the knowledge and skills gap in the learninginnovation link. Nonetheless, studies have also argued that since the extent of the TT significantly depends on the extent of control that a parent MNC has on its affiliate, JVs will not necessarily encourage TT (Lyles et al., 2003; Sinha, 2001). MNCs will typically choose JVs as a vehicle towards gaining knowledge and information on local business, economic and political stability and once they have absorbed/acquired the required knowledge they tend to initiate their own business by opting out of the ventures (Sinha, 2001).

In the Malaysian context, the presence of MNCs has little effect on technological development (Malairaja and Zawdie, 2004). The effectiveness of IJVs in transferring technology is affected by the learning and institutional gaps. The learning gap between IJVs partners occurs when MNCs participating in IJVs tend to engage in industrial activities which are employment-intensive rather than the skill-intensive activities. On the other hand, institutional gap is associated with the lack of coordination in policies and action plan for science and technology capabilities development (Malairaja and Zawdie, 2004).

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The success and performance of TT through FDIs and IJVs in Malaysia are also contingent on the governments policy on TT (Bell, Hobday, Abdullah, Ariffin and Malik, 1996). TT through JVs in the electronics sector in Malaysia has not improved the local innovative capabilities due to heavy reliance on the export-oriented electronics sector which thrived on the back of R&D-intensive imported technologies (Bell et al. (1996). For the electronics sector in Malaysia, MNCs prefer to form wholly owned subsidiaries than JVs.

1.3 Problem Statement The MNCs are regarded as the most efficient vehicle for transferring technology and knowledge across organizational borders especially through strategic alliances and IJVs (Tihanyi and Roath, 2002; Kagut and Zander, 1993). The inter-firm technology TT through IJVs have significantly contributed to a higher degree of local innovation

performance/capabilities, technological capabilities, competitive advantage, organizational learning effectiveness, productivity, technological development of local industry, and the economic growth of the host country. Realizing the high potentials of inter-firm technology transfer, organizations in the developing countries are strategizing to collaborate, learn and internalize their foreign partners technological knowledge by forming IJVs with foreign MNCs to speed up the process of strengthening their organizational competitiveness, technological capabilities and local innovation.

Nevertheless, the inter-firm TT processes in IJVs have often involved complex tradeoffs between the technology suppliers willingness to transfer their considerable amount of

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technologies, degree of protectiveness of proprietary technology (Inkpen, 2000), degree of transparency (openness) (Hamel, 1991), and motivation to transfer (Szulanski, 1996). Transferring technologies within IJVs has always been subjected to various facilitators, actors and complex relationship between partners (Szulanski, 1996); which could contribute tremendous impact on degree of technologies. Consistent with the inter-firm technology transfer and organizational learning phenomenon, previous studies have also argued that the interplay between complex relationship and competition between IJVs partners (Hamel, 1991) and the tension between knowledge sharing and knowledge protection have caused a learning paradox (Hau and Evangelista, 2007; Jordon and Lowe, 2004); where this paradox exists because the inter-firm technology transfer is indeed an organizational learning process (Huber, 1991).

Previous studies have also repeatedly cautioned that due to the risk of technology spillovers and high transaction cost associated with technology transfer, the MNCs are perceived to be a reluctant technology supplier and have been slow in transferring technology and R&D expertise to local industries (Narayanan and Lai, 2000; Muller and Schnitzer, 2006). On the other hand, the MNCs have consistently contended that it is not a question of their willingness to transfer rather the transferring process is hampered by low maturity level of the local industry; which is largely due to insufficiency of skilled personnel and weak institutional support and business environment (Rasiah and Anuwar, 1998). However, studies have shown that as compared to the U.S MNCs, technology transfers by the Japanese MNCs have been found to be less intensive and much slower (Raduan, 2002; Yamashita, 1991). Indeed, the Japanese MNCs, to some extent, have no intention to transfer key aspects of their

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technology in order to maintain their dominance in Southeast Asian economies (Taylor, 1995). Evidence have shown that the impressive record of economic progress in Malaysia has not gone hand in hand with the technological progress of proportionate magnitude due to weak relationship between technology transfer practice and decision to innovate thus causing small effect on the countrys technological development (Malairaja and Zawdie, 2004). Although theoretically technology transfer initiatives such as strategic alliances and IJVs are considered as the most efficient mechanisms to internalize foreign technologies, they did not sufficiently help improve local technological and innovative capabilities (Bell et al., 1996).

Thus, the current issue of technology transfer in the developing countries is centered on the effectiveness, efficiency and successful implementation of technology transfer process (Narayanan and Lai, 2000; Lai and Narayanan, 1997), where the success has frequently been associated with degree of technologies that are transferred to local firms (Pak and Park, 2004; Yin and Bao, 2006). This is mainly because the technology transfer success is not merely possessing the ability to operate, maintain or repair machineries at the production level (transmission) but it also includes the ability to successfully learn, acquire, adopt and apply new external technologies and knowledge (absorption) (Davenport and Prusak, 1998, 2000). Technology transfer initiatives should not only act as a catalyst for national economic growth but more importantly as a perfect mechanism to increase local organizations performance, competitiveness, technological and innovation capabilities, and productivity.

In their efforts to materialize these noble objectives, organizations in the developing countries are seriously attempting not only to eliminate the inter-firm technology transfer

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barriers and reduce technological gaps that inhibit a higher transfer of advance technologies; which are attributed to knowledge, recipient, supplier and relationship characteristics, but they are also trying to assess and estimate the extent of significant effect of these critical determinants of technology transfer on degree of technology transfer. Moreover, organizations in the developing countries are very concerned about the significant role played by tacit and explicit knowledge in strengthening both corporate and human resource performances. Realizing that both tacit and explicit technologies are the main source of competitive advantage of foreign MNCs therefore in order to increase and further improve their organizational performance, the local organizations are facing a major challenge to fully optimize and extract the potential benefits/opportunities of learning both tacit and explicit knowledge that arise from IJVs.

Although many studies have acknowledged the significant effect of knowledge transfer determinants on knowledge transfer outcomes, nevertheless, the effects of technology transfer characteristics on degree of technology transfer in inter-firm technology transfer could possibly have been influenced by other established factors such as MNCs size (MNCSIZE), age of JV (JVAGE), MNCs country of origin (MNCCOO), and MNCs types of industry (MNCIND). Therefore, based on the above scenarios, failure to appropriately address and manage the inter-firm technology transfer factors and barriers holistically would directly cause uncertainties of the technology transfer outcomes, compromise the local firms global competitiveness, productivity and the technological capability building process of local work force. This will definitely undermine the governments ambition to turn Malaysia into a developed nation in 2020.

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1.4 The Research Questions This study addresses several main questions which are primarily concerned with the effects of technology transfer characteristics on degree of technology transfer, the effect of degree of technology transfer on local firms performance, and the contingent effects of moderating variables in the relationship between technology transfer characteristics and degree of technology transfer. This study is guided by the following four research questions upon which this thesis is developed: 1. To what extent do knowledge, technology recipient, technology supplier and relationship characteristics and their dimensions influence degree of technology transfer? 2. Whether these technology transfer characteristics are significant and good predictors of degree of inter-firm technology transfer? 3. To what extent does degree of inter-firm technology transfer influence local firms performance? 4. Are there possibilities that MNCs size, age of JV, MNCs country of origin, and MNCs types of industry could significantly moderate the relationships between the technology transfer characteristics and degree of technology transfer?

1.5 The Study Objectives The general objective of this study is to examine the effects of inter-firm technology transfer characteristics on degree of technology transfer and organizational performance in Malaysia. Specifically, the objectives of this research are to:

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1. Examine the relationships between knowledge, technology recipient, technology supplier, relationship characteristics and their dimensions with degree of technology transfer. 2. Assess whether the proposed multiple linear regression (MLR) model of degree of interfirm technology transfer is fully supported by the research/population data. 3. Examine the relationships between degree of technology transfer and local firms performance and its dimensions. 4. Examine whether MNCs size, age of JV, MNCs country of origin, and MNCs types of industry moderate the relationship between the technology transfer characteristics and degree of technology transfer.

1.6 Significance of Study This study expects to enhance understanding on the complex nature of inter-firm TTs processes in IJVs based on the underlying integrated KBV and OL perspectives. The significance of the study can be categorized into two dimensions as follows:

1.6.1 Theory Advancement Since many studies on inter-firm TT are theoretical (Hamel, 1991; Inkpen, 1998a; Inkpen and Dinur, 1998) and have exclusively focused on a single or few dimensions of TT determinants (Pak and Park, 2004; Yin and Bao, 2006; Hau and Evangelista, 2007), there is a need for more hypothesis development and testing (Simonin, 1999a; Huber, 1991; Fiol, 1994). The major contribution of this study to inter-firm TT literature is the development of a holistic model of inter-firm TT in IJVs; which is based on the integrated perspectives of

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KBV and OL in explaining the relative relationships (effects) between TT characteristics and degree of TT in a single model (Szulanski, 1996; Minbaeva, 2007).

Based on a literature review, studies have shown that probably there are no empirical studies on inter-firm TT and knowledge transfer (KT) that have simultaneously examined all the four TT characteristics (Knowledge, Technology Recipient, Technology Supplier, and Relationship Characteristics) in a single model. However, only few empirical studies on intra-firm transfer such as Szulanski (1996, 2000, and 2003), Gupta and Govindarajan (2000) and Minbaeva (2007) have examined all the critical characteristics (determinants) of knowledge transfer. Even though the focus of these studies is on intra-firm knowledge transfer between MNCs and its subsidiaries, the constructs and measurements used are deemed applicable as an important foundation to empirically examine the inter-firm TTDEG between partners in strategic alliance set up such as JV. Thus, in order to assess the relative influence (importance) of each characteristic on TTDEG, the four critical TT characteristics have to be examined simultaneously in a single holistic model (Szulanski, 1996).

In the context of inter-firm TT and KT, there are inadequate studies which examined all the four TT characteristics in a single model. For example, in the context of Koreans IJVs, Pak and Park (2004) examine two determinants of knowledge transfer: 1) relation-specific variables (equity ownership, conflict, and experience) and 2) knowledge-specific determinants (tacitness and absorptive capacity). Another study by Yin and Boa (2006) examines both supplier individual level and recipients factors that affect tacit knowledge acquisition in Chinas JVs. In the context of marketing knowledge acquisition, Hau and

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Evangelista (2007) examine the effect of knowledge seekers, knowledge holders, and contextual factors on explicit and tacit marketing knowledge acquisition through IJVs in Vietnam. Recent studies have also highlighted that empirical examination of the determinants of cross-border knowledge transfer from MNCs to local firms is a phenomenon which has not been extensively researched (Pak and Park, 2004; Yin and Bao, 2006). Lai and Narayanan (1996) stress the need to systematically investigate the level of technology that is being transferred by MNCs to local industries. Building on the intra-firm KT literatures (Szulanski, 1996; Gupta and Govindarajan, 2000; Minbaeva, 2007), the holistic model advanced by this study and the use of Malaysian samples extend the empirical scope of TT and KT literature. From a review of literature, the holistic model of degree of inter-firm TT advanced by this study; which has never been empirically tested before, warrants a comprehensive empirical examination.

Second, past studies on inter-firm knowledge transfer have suggested that 1) many of the studies are heavily focused on conceptual work; which involves either small-sample or indepth studies of few organizations, therefore studies on how strategic alliances work and alliance partners learn are still empirically under researched (Simonin, 1999a), 2) although studies on TT and KT in strategic alliance have contributed many interesting and valuable theories, however, they remain empirically under-researched (Mjoen and Tallman, 1997), 3) TT, KT and learning within non-equity strategic alliances are still under researched (Wang and Nicholas, 2005), 4) from the OL perspective, studies on inter-firm KT and knowledge acquisition by organizations require more hypothesis development and testing (Huber, 1991; Fiol, 1994), 5) the cross-border TT and KT from MNCs to local firms have not been

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extensively researched (Pak and Park, 2004), 6) studies on inter-firm knowledge acquisition in alliance have focused heavily on the suppliers, JVs or KTs perspective (Martin and Solomon, 2003; Simonin, 1999a, 2004; Lyles and Salk, 1996; Tsang et al., 2004), 7) fewer studies adopt the local firms or recipients perspective (Yin and Bao, 2006), 8) empirical research on the role of knowledge within the firms and alliances has been hampered by heavy reliance on anecdotes and assertion rather than statistical evidence (Simonin, 2004; Mowery et al., 1996), and 9) very few studies have empirically examined the properties of knowledge to its transfer across organizational boundaries (Simonin, 1999a). Based on the above limitations, the present study responds to the gaps in literature by empirically examining the effects of inter-firm TT characteristics on TTDEG from the local recipient firms perspective using the Malaysian sample. Hence, this study adopts a quantitative approach by using a large population sample to test the hypotheses which have strong theoretical foundation but either have not been empirically tested or failed to obtain empirical support (Lyles et al., 1999; Simonin, 1999b).

Third, this study expects to fill in the gaps in the existing inter-firm TT literature by empirically examining the relationship between TTDEG and local firms performance (LFP) using data generated from JV companies formed in Malaysia. Based on a review of the literature, except for Yin and Boa (2006) who empirically examined the effect of tacit knowledge acquisition on local firms performance, very few intra and inter-firm studies have examined the impact of TT on organizational performance; specifically, the effect of TTDEG on local firms performance. For example empirical studies by Szulanski (1996), Minbaeva et al. (2003), Pak and Park (2004), Hau and Evangelista (2007) and Minbaeva

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(2007) mainly focused on KT as an outcome. This study contributes to inter-firm TT and KT literature by adopting a multi-dimensional performance indicators approach in examining the relationships between TTDEG and LFP and its two dimensions; specifically whether TTDEG affects LFP in terms of 1) corporate performance (CPERF); which consists of business volume, market share, planned goal, and profits, and 2) human

resource/competencies performance (HRPERF); which consists of product/service quality, employees productivity, managerial techniques/skills and operational efficiency. These organizational performance indicators are selected as they reflect the organizations effectiveness in technological knowledge acquisition, organizations capabilities and productivity and competitiveness.

Fourth, many of the previous empirical studies on knowledge transfer and acquisition in strategic alliance have seldom tested the impact (strength) of moderating variables on the linear (direct) relationships between TTCHARS and TTDEG; in specific whether the presence of certain variables have strong moderating effects on TTCHARS-TTDEG relationship (for example Szulanski, 1996; Gupta and Govindarajan, 2000; Minbaeva, 2007; Pak and Park, 2004; Lin, 2005; Wang and Nicholas, 2005; Cummings and Teng, 2003; Liao and Hu, 2007; Bresman et al., 1999; Mowery et al., 1996; Lyles and Salk, 1996; Kogut and Zander, 1993; Grosse, 1996; Dhanaraj et al., 2004; Hau and Evangelista, 2007). Nonetheless, few studies on inter-firm KT in strategic alliance have acknowledged the important role of moderating variables such as 1) collaborative know-how, learning capacity and alliance duration (Simonin, 1999a), 2) collaborative experience and firm size (Simonin, 1999b), 3) organizational culture, firm size, alliance form, and competitive regime (Simonin, 2004), 4)

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age of JV (Mohr and Sengupta, 2002), and 5) alliance origin and alliance experience (Yin and Bao, 2006). In two knowledge acquisition studies through IJVs, Tsang et al. (2004) and Hau and Evangelista (2007) tested age of JV and environmental challenge as moderating variables in the relationships between knowledge acquisition and JVs performance, and between marketing knowledge acquisition and its antecedents. Therefore, following recent approach in the strategic alliance literature (Simonin, 1999a, 1999b, 2004; Yin and Bao, 2006; Tsang et al., 2004), this study examines/tests the effects of MNC SIZE (large vs. medium/small MNCs), JVAGE (old vs. young IJVs), MNCCOO (Western vs. Asian MNCs) and MNCIND (manufacturing-based industry vs. service-based industry), as moderating variables in the relationship between the TTCHARS and TTDEG. The primary objective is to provide new insights and information on the boundary conditions for the relationships and to improve the fit of the studys model (Aguinis, 2004). These moderating variables are able to further explain changes in the TT characteristics which affect the amount of technology transferred to local firms (Aguinis, 2004; Frone, 1999). Examining the contingent effects of moderating variables is important to ascertain whether 1) these variables could facilitate a higher/lower degree of technology transferred to local firms, and 2) the studys model is a fully specified model (Lin, 2005; Lyles and Salk, 1996).

Finally, while the previous studies are limited to selected functional expertise such as technological learning (Lin, 2007), managerial knowledge (Si and Bruton, 1999; Tsang, 2001; Liu and Vince, 1999; Lin, 2005), managerial skills (Wong et al., 2002), technology or manufacturing know how (Lam, 1997; Bresman, Birkinshaw and Nobel, 1999), business environment and product market knowledge (Geppert and Clark, 2003), marketing

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knowledge (Simonin, 1999b; Wong, Maher and Luk, 2002), and research and development (Cummings and Teng, 2003; Minbaeva, 2007), this study adopts a multi-dimensional operationalization approach (Minbeava, 2007; Gupta and Govindarajan, 2000; Lyles and Salk, 1996; Lane et al., 2001; Dhanaraj et al., 2004; Pak and Park, 2004) by integrating and operationalizing knowledge underlying technology from eight critical aspects of technology.

Thus, rather than treating technology/knowledge as an abstract subject, this study operationalizes technology as technological knowledge from two distinct dimensions 1) tacit knowledge (new product/service development, managerial systems and practice, process designs and new marketing expertise), and 2) explicit knowledge (manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing knowhow). These types of technologies are chosen as they strongly represent both tacit and explicit knowledge, are system dependent and less product observable (Zander and Kogut, 1995). Studies have also argued that different types of technology and knowledge require different kinds of management (Inkpen and Dinur, 1998). Through technology dichotomization, this study would be able to assess and examine the extent of influence (importance) of each TTCHAR on degree of tacit and explicit knowledge in IJVs (Pak and Park, 2004). This approach provides plausible, systematic and practical measurement of degree/amount of technology transferred by foreign MNCs to local firms based on different type of technologies. This study is also motivated by 1) a limitation highlighted by Yin and Bao (2006) to further examine the amount and various types of organizational tacit knowledge transferred by MNCs to local firms, and 2) Pak and Parks (2004) suggestion of the critical association between the generic knowledge attributes and various

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functional/expertise kinds of knowledge in the value-chain activities such as marketing and production knowledge.

Past studies have operationalized knowledge in terms of marketing know-how, distribution know-how, packaging design/technology, product design, process design, purchasing knowhow, management systems and practices, new product development, and manufacturing process skills/techniques separately or individually (Minbeava, 2007; Gupta and Govindarajan, 2000; Lyles and Salk, 1996; Lane et al., 2001; Dhanaraj et al., 2004; Pak and Park, 2004). The types of knowledge underlying technology in this study are consistent with the definition on types of technology given by many researchers which include product, process and management technologies (Grosse, 1996; Chudson, 1971; Baranson, 1978; Marton, 1986).

1.6.2 Policy and Practice The inter-firm TT through IJVs formed between foreign MNCs and local companies has increasingly emerged as an efficient formal mechanism to internalize foreign partners technologies, knowledge and competencies in developing countries (Kogut and Zander, 1993; Harrigan, 1984). Although the TT processes are complex and difficult, collaborative JVs are seen as the appropriate strategy to extract tacit and explicit knowledge in enhancing the local companies competitiveness, indigenous technical capability, technological development and local innovation (Inkpen 1998a, 2000; Mowery et al., 1996).

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Since JVs in developing countries have been frequently perceived as unstable organizations and technology as the main source of competitive advantage of MNCs, transferring technology often involves various facilitators, actors and complex relationship between JV partners which could affect the amount/degree of technologies transferred to local companies (Szulanski, 1996; Beamish, 1985). Thus, this studys holistic model may help the recipient managers to assess the strengths and weaknesses of their current inter-firm TT strategies and policies, identify the crucial factors that influence degree of technology transfer and help to strengthen their organizations strategy for organizational learning which could create potentials for a higher transfer of tacit and explicit technology to their organizations.

The issue of effectiveness and efficiency of inter-firm TT between foreign MNCs and local recipient firms in JVs are directly associated with the facilitators/barriers that impede TT (the transfer process) and knowledge acquisition (the absorption process); which are primarily attributed to the critical TTCHARS such as knowledge transferred (knowledge attributes), technology recipient (knowledge seeker attributes), technology supplier (source attributes), and supplier-recipient relationship (relational attributes) characteristics (Leonard-Barton, 1990; Teece, 1977; Rogers, 1983; Szulanski, 1996). These facilitators/barriers to transferability can facilitate or impede inter-firm TT and knowledge acquisition in strategic alliance set-up such as IJVs (Szulanski, 1996; Simonin, 1999a). The co-existence of these determinants is interrelated with each other where the ineffectiveness of any characteristic will render inter-firm TT and knowledge acquisition in IJVs to be less successful and effective. As inter-firm TT in JVs involves more complex and difficult processes than intrafirm TT between MNCs subsidiaries, the barriers which arise from the TTCHARS require

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close empirical investigation. In this context, this studys framework will therefore help the recipient managers to enhance their understanding on the complex nature of inter-firm TT through JVs and identify, address and manage the dominant barriers that inhibit the transfer process. Consequently, the managers will be able to re-strategize their inter-firm TT strategies to suit their organizations objectives.

Identifying and examining the relative effect of all TT characteristics on TTDEG is also crucial as the findings could 1) offer the local firms managers a practical framework (foundation) in reviewing, designing or formulating new TT policies and strategies that would help to facilitate a higher level of technology transfer in JVs, 2) significantly help increase the overall local companies competitiveness, productivity, and performance, 3) enhance potentials for technology learning and acquisition by local companies, 4) help develop indigenous technological capabilities of the local work force, and 5) indirectly help to stimulate local innovation capability.

1.7 Operational Definitions of Key Terms The following definitions describe the key terms that are used in this study to clarify the problem statement, research questions, objectives and scope of this study. The definitions provide explanations and descriptions of the variables used in the context of this study which are specifically operationalized from KBV and OL perspectives. Building on the previous studies from both perspectives, the variables operational definitions are intended to delineate

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the studys perimeter (scope) and to avoid ambiguity/uncertainty in the interpretation of variables.

1.7.1 Technology Technology is defined as both tacit and explicit knowledge, information and know-how of the product materials, physical assets, processes and production and managerial capabilities which are organizationally embedded (Polanyi, 1962; Nelson and Winter, 1982; Teece, 1986; Reed and DeFillippi, 1990; Nonaka, 1994; Nonaka and Takeuchi, 1995; von Hippel, 1994; Kogut and Zander, 1992, 1993).

1.7.2 Technology Transfer (TT) TT is defined as the transfer of technological knowledge, information and know-how that are transferred across (outside) organizational border by the technology suppliers to unaffiliated firms where the technology recipients firms have effectively acquired, learned and absorbed technology and knowledge embedded in product materials, physical assets, processes and production and managerial capabilities (Kogut and Zander, 1992, 1993; Teese, 1976; Grant, 1996a; Szulanski, 1996; Inkpen, 1998, 2000; Inkpen and Dinur, 1998; Simonin, 1999a, 1999b, 2004; Pak and Park, 2004; Lyles and Salk, 1996).

1.7.3 International Joint Ventures (IJVs) IJVs are referred to as a form of international cooperative or collaborative effort which bring together two or more firms to engage in a joint activity to which each member contributes resources and competencies, technology, knowledge and skills with expectation

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to extract resources of higher value (Beamish and Bedrow, 2003; Inkpen, 2000; Harrigan, 1986; Porter and Fuller, 1986). In this study IJVs do not include other forms of co-operative agreements such as licensing, distribution and supply agreements, research and development partnerships, or technical assistance and management contracts (Inkpen and Crossan, 1995).

1.7.4 Degree of Technology Transfer (TTDEG) This study defines TTDEG as the degree of 1) tacit knowledge in terms of new product/service development, managerial systems and practice, process designs and new marketing expertise, and 2) explicit knowledge in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing knowhow; which are transferred across organizational boundaries by the supplier firms (the transmission) and have been successfully adopted by the local recipient firms (the adoption) (Lyles and Salk, 1996; Lane et al., 2004; Gupta and Govindarajan, 2000; Dhanaraj et al., 2004; Pak and Park, 2004; Yin and Bao, 2006; Tsang at al., 2004; Minbaeva, 2007).

1.7.5 Tacitness (TCT) TCT is defined as the degree of technology suppliers implicit knowledge that is nonverbalizable, intuitive, unarticulated, non-codifiable, highly personal and deeply rooted in action, accumulated through learning by doing, experience and practice, and involvement within a specific context which makes it difficult to be formalized, communicated, and transferred to the recipient (Polanyi, 1962; Reed and DeFillippi, 1990; Nonaka, 1994).

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1.7.6 Complexity (COMPLX) This study defines COMPLX as the degree of interdependent skills and assets that arise from large numbers of technologies, organization routines, individual resources, and teambased experience linked to a particular knowledge or asset of the technology supplier which makes knowledge difficult to be transferred or imitated (Winter, 1987; Reed and DeFillippi, 1990; Simonin, 1999a; Kogut and Zander, 1993).

1.7.7 Specificity (SPEC) SPEC is defined as the degree of durable investments in specialized equipments, facilities and skilled human resources that are firm-specific, difficult to transfer and imitate, produce complex social relationships and have become the source of technology suppliers competitive advantage (Reed and DeFillippi, 1990; Kogut and Zander, 1993; Lado and Wilson, 1994).

1.7.8 Absorptive Capacity (ACAP) In the context of this study, ACAP includes two important elements of absorptive capacity: prior related knowledge and intensity of effort. Thus, absorptive capacity is defined as the degree of technology recipients ability 1) to understand, assimilate, and apply new technology and knowledge to commercial ends, and 2) to solve problems (Cohen and Levinthal, 1990; Kim, 1998; Zahra and George, 2002).

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1.7.9 Recipient Collaborativeness (RCOL) This study defines RCOL as the degree of technology recipients efforts to establish a mutually beneficial and collaborative relationship which requires the recipient firms honest intention to create common benefits for both supplier and recipient (Yin and Bao, 2006).

1.7.10 Partner Protectiveness (PPROTEC) PPROTEC refers to the extent of protections/hurdles, intentionally or unintentionally, imposed by technology supplier on recipient in an IJV thus restricting the accessibility to proprietary technology/knowledge (Hau and Evangelista, 2007; Inkpen 2000).

1.7.11 Transfer Capacity (TRANSCAP) TRANSCAP is defined as the degree of the technology suppliers ability to articulate, communicate and transfer technology and knowledge efficiently and effectively to technology recipient thus facilitating the TT and inter-organizational learning between JV partners (Martin and Solomon, 2003; Minbaeva, 2007).

1.7.12 Relationship Quality (RELQLTY) RELQLTY is defined as the degree of quality interaction between technology supplier and recipient in terms of relationship informality, openness and communication density which increases the exchange of information, technology and knowledge between JV partners (Gupta, 1987; Gupta and Govindarajan, 2000; Lin, 2005).

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1.7.13 Mutual Trust (MT) MT refers to the degree of the JV partners perception or belief that the other partner will honor their respective promises, commitments and obligations in the collaborative relationship (Gulati, 1995; Uzzi, 1997; Kale, Singh and Perlmutter, 2000; Inkpen, 2000).

1.7.14 Local Firms Performance (LFP) This study refers LFP as the local firms performance in terms of 1) corporate performance (business volume, market share, planned goal, and profits), and 2) human

resource/competencies performance (product/service quality, employees productivity, managerial techniques/skills and operational efficiency) (Lyles and Salk, 1996; Tsang et al., 2004; Yin and Bao, 2006).

1.7.15 Size of MNCs (MNCSIZE) MNCSIZE refers to the total number of MNCs or technology suppliers employees (Simonin, 1999a; Tsang et al., 2004; Dhanaraj et al., 2004).

1.7.16 Age of JV (JVAGE) JVAGE refers to the duration of international joint ventures from the date of JV formation (Tsang et al., 2004; Lin, 2005; Simonin, 1999a; Luo, 2001).

1.7.17 MNCs Country of Origin (MNCCOO) MNCCOO refers to the nationality of the technology suppliers or MNCs which formed JVs with local firms (Yin and Bao, 2006; Mowery et al., 1996; Kale et al., 2000).

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1.7.18 MNCs Types of Industry (MNCIND) MNCIND refer to the manufacturing-based and service-based industries of the MNCs (Minbaeva et al., 2003; Cho and Lee., 2004; Lane and Lubatkin, 1998).

1.8 Organization of the Thesis This thesis is organized into six chapters. Chapter 1 deals with the studys background, problem statement, research questions, objectives and significance, and operational definitions of key terms.

Chapter 2 presents an extensive literature review on the definitions and concept of technology, definitions and concept of TT, the underlying theories and TT models, technology transfer characteristics, moderating variables, and performance. The other objective of this chapter is to provide explanations/arguments on the theoretical foundation of the studys conceptual framework.

Chapter 3 is devoted to the studys conceptual framework and hypotheses development. The studys framework is developed based on an extensive literature review of theoretical background as well as empirical research on intra and inter-firm knowledge transfer, technology transfer, and IJV. A number of hypotheses are developed to 1) examine the relationships between all TTCHARS and their dimensions, and TTDEG, 2) determine whether all TTCHARS and their dimensions are predictors of TTDEG, 3) examine the relationships between TTDEG and LFP and its dimensions, and 4) examine the contingent

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effects of moderating variables (MNCSIZE, JVAGE, MNCCOO, and MNCIND) in TTCHARSTTDEG relationship.

Chapter 4 describes the research methodology applied by this study; which includes the research design, unit of analysis, sampling procedures, data collection methods, and statistical analysis techniques used in this study. This chapter also discusses the questionnaire, instruments construction, reliability and validity of instruments, non response issues, pilot test, and exploratory data analysis.

Chapter 5 discusses the results and findings of the study. This chapter discusses the demographic profile of the respondents and organizations. The results of the study; which are based on group and sub-variable (individual) analyses, are presented together with the results of hypothesis testing and discussions on the effect of findings on existing literature. The discussions offer plausible arguments which are supported by the previous studies.

Chapter 6 discusses the studys findings and conclusions, implications of the findings on theory (body of knowledge) and practice, limitations of study, and recommendations for future research. Apart from summarizing the results, this chapter highlights the significant contributions made by the study.

Finally, the bibliography and appendices are annexed at the end of the thesis.

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CHAPTER 2

LITERATURE REVIEW

2.1 Introduction This chapter presents the literature review that relates to the variables under study and their relationships with inter-firm technology transfer (TT). This review is divided into two sections. The first section covers literature review on the definition and concept of technology, definition and concept of technology transfer (TT), TT models, theories related to TT and the underlying theories of the study. The second section reviews literature on the relationships between all technology transfer characteristics (TTCHARS) namely knowledge (KCHARS), technology recipient (TRCHAR), technology supplier (TSCHAR) and relationship (RCHAR) characteristics and degree of technology transfer (TTDEG) followed by a review of the literature on the effects of moderating variables in the relationship between TTCHARS and TTDEG. This study also offers a review on the relationship between TTDEG and local firm performance (LFP). Finally, the chapter summary is presented at the end of this chapter.

2.2 The Definition and Concept of Technology Reddy and Zhoa (1990) argue that defining the technology concept is not easy because technology has been defined from various perspectives. The term technology is inherently an abstract concept; which is difficult to interpret, observe and evaluate (Blomstrom and Kokko, 1998). Regardless of the extensive research conducted on the subject, many of the

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literatures are fragmented along different specialties. Thus, there is no commonly accepted paradigm (Reddy and Zhoa, 1990). Due to this the concepts, variables and measures relevant to the study are different from one study to another (Kumar et al., 1999).

Past researchers have viewed and defined the term technology from different perspectives; and this has influenced the research design and results, negotiations around a transfer and government policies in general (Reddy and Zhoa, 1990). From the cultural system perspective the researchers define technology as a cultural system which is concerned with the relationships between humans and their environment (Tepstra and David, 1985). From the systems perspective, technology is referred to as encompassing 1) the basic knowledge sub-system, 2) the technical support system (software), and 3) the capital-embodied technology (hardware) (Afriyie, 1988). From the socio-technology perspective the researchers take a broader view by describing technology to be meaningful only when it becomes a social fact (Levin, 1996; Rogers, 1962; Rogers and Shoemaker, 1971). Some researchers have even defined technology as the essential human attribute (Pitt, 1999).

The early concept of technology as information holds that technology is generally easy to apply, reproduce and reuse (Arrow, 1962). This view contradicts the collection of literatures on international TT literature which hold that technology is conceived as firm-specific information concerning the characteristics and performance properties of the production process and product design (Reddy and Zhoa, 1990). The production process or operation technology is embodied in the equipment or the means to produce a defined product. On the

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other hand, the product design or product technology is that which is manifested in the finished product (Reddy and Zhoa, 1990).

Technology is also viewed as a configuration where the transfer object (the technology) must rely on a subjectively determined but specifiable set of processes and products (Sahal, 1981). Based on Sahals (1981, 1982) concept, technology and knowledge are inseparable because when a technological product is transferred or diffused, the knowledge upon which its composition is based is also diffused. The physical entity cannot be put to use without the existence of a knowledge base which is inherent and not ancillary (Bozeman, 2000). Technology does not only relate to technology embodied in the product. It is also associated with the knowledge, information of its use, application and the process in developing the product (Lovell, 1998; Bozeman, 2000). Technology has always been connected with obtaining certain results, resolving certain problems, completing certain tasks using particular skills, employing knowledge, and exploiting assets and resources (Lan and Young, 1996).

Technology has been construed as the firms intangible assets and it is firm-specific which forms the basis of a firms competitiveness and generally is released under special condition (Caves, 1974; Dunning, 1981). Technology as the intangible assets of the firm is rooted in the firms routines and is not easy to transfer due to the gradual learning process and higher cost associated with transferring tacit knowledge (Radosevic, 1999). Valuable technological knowledge which is the intangible assets of the firm is never easily transferred from one firm to another because technological learning process is needed to assimilate and internalize the transferred technology (Lin, 2003). Technology is mainly differentiated knowledge about a

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specific application, tacit, often uncodified and largely cumulative within firms (Pavit, 1985). It can include information that is not easily reproducible and transferable (Tihanyi and Roath, 2002). Based on this argument, technology is seen as tacit knowledge, firm-specific secrets or knowledge known by one organization (Polanyi, 1983; Nonaka, 1994).

Technology has also been referred to as the integration of the physical objects or artifacts, the process of making the objects and the meaning associated with the physical objects (MacKenzie and Wajcman, 1985). These elements are not distinctive and separable factors rather they form a seamless web that constitutes technology (Woolgar, 1987). All the three elements should be understood as being connected to each other in which a change in one element will affect the other elements. Thus, technology is broadly defined as embodied in people, materials, cognitive and physical processes, facilities, machines and tools (Lin, 2003).

Kumar et al. (1999) categorize technology into two primary components: 1) a physical component which comprises items such as products, tooling, equipments, blueprints, techniques, and processes; and 2) the informational component which consists of know-how in management, marketing, production, quality control, reliability, skilled labor and functional areas. Rosenberg and Frischtak (1985) consider technology as firm-specific information, concerned with the characteristics and performance properties of production processes and product designs, tacit and cumulative in nature. Technology is the theoretical and practical knowledge, skills, and artifacts that can be used to develop products and services as well as their production and delivery systems (Burgelman et al., 1996). In

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extending the technology concept, Maskus (2003) defines technology as the information necessary to achieve a certain production outcome from a particular means of combining or processing selected inputs which include production processes, intra-firm organizational structures, management techniques and means of finance, marketing methods or any of its combination.

A review of the literature indicates that previous researchers have broadly categorized technology in terms of its explicit and tacit nature (Polanyi, 1962). These two forms of technology are also referred to as hardware and software technology. The term technology has been extensively debated by both hardware and software schools. Based on the definitions given, the researchers from the hardware school define technology as the construction and use of machines, systems, processes or engineering (Strassman, 1968; Jones, 1970; Hawthorne, 1971; Galbraith, 1972; Goulet, 1989; Lovell, 1998; Reisman, 2005). Generally, hardware technology corresponds with explicit knowledge which refers to knowledge underlying technology that can easily be codified, shared, transmitted, retrieved, reused, transferable in formal or systematic language i.e. production manuals, academic papers, books, technical specifications, designs and is only useful when tacit knowledge enables individuals and organizations to use it (Techakanont and Terdudomtham, 2004). Software technology, on the other hand, corresponds with implicit/tacit knowledge underlying technology that is difficult to codify, communicate, transfer and is generally exchanged through action, commitments and direct involvement such as face-to-face communication or on-the-job/apprenticeship type of training (Ernst and Kim, 2002).

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2.2.1 Discussion The dynamic nature of technology has resulted in the existence of various definitions and concepts of technology by previous studies. Discussions on the concept of technology are crucial in getting a clear understanding on the nature of technology before examining what technology consists of. Building specifically on knowledge-based view (KBV) and organizational learning (OL) perspectives, this study follows a stream of literature which suggests that 1) knowledge as the critical element underlying technology (Hall and Johnson, 1970; Kanyak, 1985; Shiowattana, 1987; Das, 1987; Williams and Gibson, 1990; Hayden, 1992; Gibson and Rogers, 1994), and 2) both technology and knowledge are inter-dependent and inseparable in nature (Kogut and Zander, 1992,1993; Zander and Kogut, 1995; Sinani and Meyer, 2004; Sahal, 1981, 1982; Bozeman, 2000; Li-Hua, 2006).

2.3 Defining the Concept of Technology Transfer (TT) The definitions and concepts of TT have been discussed in many different ways based on the disciplines, perspectives and purposes of research (Bozeman, 2000). TT is often a chaotic and disorderly process involving groups and individuals who may hold different views about the value and potential use of the technology, where the researchers, developers, and users are likely to have different perceptions about technology (Gibson and Slimor, 1991). A review of TT literature reveals that TT is a complex, difficult process even when it occurs across different functions within a single product division of a single company (Zaltman et al., 1973; Kidder, 1981; Smith and Alexander, 1988) and needs time to evolve (Agmon and von Glinow, 1991). However, economic theory for example Solows (1957) growth model

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has viewed technology as given that is embodied in products or processes, where technology resembles blueprint, machines, or materials that are easily replicated and transferred (Lin, 2003; Arrow, 1962).

A stream of literature described TT from various dimensions for example TT as 1) the transmission of know-how to suit local conditions with effective absorption and diffusion both within and across countries (Chung, 2001; Kanyak, 1985; Teece, 1977; Roessner, 1993; Tihanyi and Roath, 2002), 2) the transmission of know-how (knowledge) which enables the recipient enterprise to manufacture a particular product or provide a specific service (Baronson, 1970), 3) the application of scientific principles to solve practical problems (Levin, 1996), 4) the technology system in terms of technology embodied in people (personembodied), things (product-embodied) or processes (process-embodied) (Hall and Johnson, 1970), 5) the process by which ideas and concepts are moved from the laboratory to marketplace (Phillips, 2002; Williams and Gibson, 1990), 6) the transfer of knowledge and concept from developed to less technologically developed countries (Derakhshani, 1983; Putranto et al., 2003), 7) the transfer of inventive activities to secondary users (Van Gigch, 1978), 8) the transmission or movement of knowledge as a process where it involves the process how an organization or a country transfers scientific or technological achievements, new uses for technology, designs, and the technical knowledge that can be used in production (Chun 2007), 9) an intentional, goal-oriented interaction between two or more social entities during which the pool of technological knowledge remains stable or increases through the transfer of one or more components of technology (Autio and Laamanen, 1995), and 10) the transmission of embodied and disembodied technologies (Das, 1987).

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Past researchers have identified that technology can be transferred from one place to another for instance from university to enterprise, from organization to another organization, or from one country to another (Solo and Rogers, 1972). In the context of developing countries TT needs to be perceived in terms of achieving three core objectives: 1) the introduction of new techniques by means of investment of new plants, (2) the improvement of existing techniques, and (3) the generation of new knowledge (Hoffman and Girvan, 1990). In the context of manufacturing processes, TT requires not only the transfer of technological knowledge in the form of process sheets, blueprints, products, and materials specification but also the transfer of know-how of high-caliber engineering and technical personnel (Farhang, 1996).

Another stream of literature views TT process which is not only about the transmission of knowledge but is also related to 1) a learning process where technological knowledge is continually accumulated into human resources that are engaged in production activities (Shiowattana, 1991), 2) the technology recipients capability to learn and absorb technology into the production function (Maskus, 2003), 3) the capacity to master, develop and later produce autonomously the technology underlying the products (Chesnais, 1986), 4) a sustained relationship between two enterprises over a period of time which enables the receiving enterprise to produce the product with the desired level of quality standards and cost efficiency (Reddy and Zhoa, 1990), and 5) a deeper and wider accumulation of knowledge (Shiowattana, 1991).

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The literatures on TT and international TT are extensive and varied in perspectives from various disciplines which include political science, economics, sociology, public policy, marketing and management of technology (Kumar et al., 1999; Zhoa and Reisman, 1992). The economists often define TT on the basis of the properties of generic knowledge; where the main focus is on variables that relate to production and design (Arrow, 1969; Johnson, 1970; Dosi, 1988). For the sociologist they tend to link TT to innovation and view technology as a design for instrumental action that reduces the uncertainty of causeeffect relationships involved in achieving a desired outcome (Rogers, 1962; Rogers and Shoemaker, 1971). The anthropologists tend to broadly view TT within the context of cultural change and how technology affects changes (Foster, 1962; Service, 1971; Merrill, 1972). The social science perspective relates TT to socio-technical process; which implies the transfer of cultural skills accompanying the movement of machinery, equipment and tools which include the transfer of the physical movement of artifacts and the embedded cultural skills (Levin, 1993). The business disciplines tend to concentrate on stages of TT, particularly stages which are related to designs, productions and sales (Teese, 1976; Lake 1979). The bulk of TT literature has been contributed by management researchers (Zhoa and Reisman, 1992). Management researchers tend to focus on intra-sector transfer and relationships between TT and strategy (Rabino, 1989; Chiesa and Manzini, 1996; Laamanen and Autio, 1996; Lambe and Spekman, 1997). Most of the current literatures by management researchers have extensively shifted their focus to TT within alliances and how alliances are crucial to the development of TT (Zhoa and Reisman, 1992).

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2.3.1 Discussion Based on various definitions TT area is very wide and dynamic. The numbers of literature on the subject are voluminous, extensive and varied in perspectives (Kumar et al., 1999; Zhoa and Reisman, 1992). Past studies on TT and KT have clearly distinguished between intra and inter-firm transfer. While this study focuses on inter-firm TT, the understanding on how both types of transfer operate is useful since both intra and inter-firm transfers serve different purposes and apply different mechanisms of transfer. Intra-firm TT and KT focus on how knowledge is created and internally transferred between departments, units, divisions of the same organization, or MNCs subsidiaries (Argote and Ingram, 2000). On the other hand, inter-firm TT or KT involves the process of knowledge acquisition and transfer from outside of the organizational boundary especially within the strategic alliances or IJVs between two or more different organizations (Huber, 1991; Inkpen, 1998a; Inkpen and Dinur, 1998; Inkpen, 2000). Thus, consistent with the development of current TT literature this study specifically focuses on the transfer of technologies and knowledge between unaffiliated organizations in IJVs.

2.3.2 Technology Transfer (TT) and Knowledge Transfer (KT) A review of literature reveals that past studies have made little attempt to explain the difference between knowledge transfer (KT) and technology transfer (TT). Many of the studies do not draw clear distinctions between KT and TT where most of the studies have applied the terms interchangeably in both TT and KT literatures. Most of the studies have treated KT and TT to have similar meanings and dimensions. Based on various definitions from different disciplines of research and background, most of the researchers have affirmed

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that knowledge as the critical element underlying technology. TT is closely associated with the transfer of information, know-how, technical knowledge embodied in the products, processes and managements (Hall and Johnson, 1970; Kanyak, 1985; Shiowattana, 1987; Das, 1987; Williams and Gibson, 1990; Hayden, 1992; Gibson and Rogers, 1994). Other definition makes direct reference to knowledge as a critical element underlying the product technology, process technology and management technology (Grosse, 1996).

Many researchers have attempted to explain the interface between TT and KT, and some even tried to draw distinctions between these two concepts. Kogut and Zander (1992, 1993), in their study on knowledge transfer within the multinationals (MNCs), use both terms interchangeably to establish a close association between TT and KT when suggesting that TT within MNCs can be explained by the attributes of knowledge such as tacitness, codifiability and teachability. Sinani and Meyer (2004) make no distinction between TT and KT in studying spillover effects of TT. Sung and Gibson (2000) connote TT and KT to have similar meaning when suggesting KT and TT as the movement of knowledge and technology through some channels from one individual or organization to another.

Studies have suggested that technology and knowledge are inseparable. For example Sahal (1981, 1982) argues that technology as configuration, observing that the transfer object (the technology) must rely on a subjectively determined but specifiable set of processes and products. Bozeman (2000) asserts that Sahals (1981, 1982) concept has resolved a major analytical problem in distinguishing TT and KT. Both TT and KT are inseparable because when a technological product is transferred or diffused, the knowledge upon which its

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composition is based is also transferred (Bozeman, 2000). TT will not occur without knowledge transfer as knowledge is the key to control technology (Li-Hua, 2006). Thus, studies on KT turn almost invariably to TT when empirical investigation is in order (Simonin, 1996b pg. 466). Dunning (1994) argues that current studies tend to relate technology directly with knowledge. In the context of TT through FDIs, Kogut and Zander (1993) have explicitly indicated that the transfer of knowledge embodies a firms advantage, underlying technology, production, marketing or other activities.

Although TT and KT have been regularly used interchangeably in many literatures as they are highly interactive, however, they serve different purposes. Gopalakrishnan and Santoro (2004) distinguish TT and KT in term of their purposes. KT implies a broader and have more inclusive construct which is directed more towards the why for change whereas TT focuses on a narrower and more targeted construct that usually embodies certain tools for changing the environment (Gopalakrishnan and Santoro, 2004). Even though it appears that there are distinctions between their purposes, majority of the researchers are in consensus on the fact that knowledge is the critical element underlying TT (Kogut and Zander, 1992, 1993; Sinani and Meyer, 2004; Sung and Gibson, 2000; Sahal, 1981, 1982; Bozeman, 2000; Lin, 2003; LiHua, 2006).

2.4 Approaches to Technology Transfer (TT) Previous studies on TT have employed different approaches to shape and govern the TT efforts. TT as a domain covers all activities around technological development. Few TT

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models were developed after World War II to govern the implementation of TT activities and their application to marketplace (Devine et al., 1987; Tenkasi and Mohrman, 1995). Among the traditional TT models developed were the appropriability, dissemination, knowledge utilization, and communication models. In the 1970s studies have adopted the economic international trade approach in developing a linear TT model (Bessant and Francis, 2005). In the 1980s research on TT emphasized on the effectiveness of specific technologies that are being transferred; which in general is within a broader context of economic development (Hope, 1983). The 1990s approach emphasizes on the significance of learning at the organization level as a key element in facilitating technology transfer (Figuereido, 2001).

In late 1980s and early 1990s TT models have started to absorb the principles of organization development movement (French and Bell, 1995). Strategic management researchers have further contributed to the development of TT frameworks based on KBV and OL perspectives as these perspectives have been found to have quite similar dimensions such as the outcomes, processes, barriers and facilitators (Daghfous, 2004). These perspectives have significantly contributed to the expansion of TT models since literatures from both KBV and OL perspectives appear to subsume most of the contributions of the TT literatures (Daghfous, 2004).

2.4.1 The Traditional Models of Technology Transfer (TT) The main objective of this section is to review previous TT models in terms of focus of each model, strengths and limitations of the models and finally to provide explanations on the foundation of the present studys conceptual framework.

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2.4.1.1 The Appropriability Model This model, which was developed in 1945-1950s, suggests that good or quality technologies sell themselves (Gibson and Slimor, 1991). The model emphasizes on the importance of quality of research and competitive market pressure in achieving TT and promoting the use of research findings (Devine et al., 1987; Gibson and Slimor, 1991; Tenkasi and Mohrman, 1995). According to this model, TT process simply occurs when technology has found its users or has been discovered by the market. Purposive or deliberate TT mechanism is seen as unnecessary. This model assumes that after the researchers develop the technology and make technology available through various forms of communications such as technical reports and professional journals, the users will automatically show up at the researchers door (Devine et al., 1987).

In their three-level TT model (Figure 2.1, pg 51) Gibson and Slimor (1991) describe the first level (technology development level) as the most fundamental level when the technology process can be largely passive through mediated means such as research reports, journal articles and computer tapes. The underlying presumption of the appropriability approach is viewing TT as the result of an automatic process that began with scientific research and then moved to development, financing, manufacturing and marketing. [One] need not necessarily be concerned with linkages in the technology commercialization process (Kozmetsky, 1990). However, previous studies have acknowledged that over the years evidence has shown that quality technologies do not usually sell well themselves (Devine et al., 1987; Gibson and Slimor, 1991).

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2.4.1.2 The Dissemination Model This model, which was popularized by Rogers (1983) and Rogers and Kincaid (1982), was developed in the 1960-1970s (Gibson and Slimor, 1991). This approach suggests the importance of technology and innovation to be diffused or disseminated to the potential users by the experts (Williams and Gibson, 1990). This model assumes that an expert will transfer specialized knowledge to the willing user. The presumption underlying this model is that once the linkages are established, the new technology will move from the expert to the nonexpert like water through a pipe once the channel is opened (Williams and Gibson, 1990; Gibson and Slimor, 1991). Gibson and Slimor (1991) describe this model as the second level of their model, the technology acceptance level. Based on their model, this level includes the experts primary responsibility to select technology and ensure that the technology is available to a receptor that can understand and potentially use the technology (Gibson and Slimor, 1991). However, this model suffers from its one-way communication (unilateral) characteristic with no involvement from the users (Devine et al., 1987; Gibson and Slimor, 1991).

2.4.1.3 The Knowledge Utilization Model This model, which was developed in late 1980s (Gibson and Slimor, 1991), has a significant influence on TT literature (Szakonyi, 1990; Zacchea, 1992). The approach taken by this model is its emphasis on 1) the important role of interpersonal communication between the technology developers/researchers and technology users, and 2) the importance of organizational barriers or facilitators of TT. The knowledge utilization approach represents an evolutionary step which focuses on how to organize knowledge to effective use in the

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technology users setting (Backer, 1991). Gibson and Slimor (1991) view this model as the third level in their model, the technology application level. This level is the most involved level of TT where it includes the profitable use of the technology in the market place as well as other application such as intra-firm processes.

While this approach indicates an appreciation of the complexities of TT, the researchers argue that the model suffers from a linear bias (Dimancescu and Botkin, 1986). The underlying presumption of this model is that technology moves hand-to-hand in one direction unilaterally from the experts to the users to become a developed idea and eventually a product (Gibson and Slimor, 1991). This model reduces the complex transfer process to chronologically ordered stages (Gibson and Slimor, 1991; Sung and Gibson, 2000). The appropriability, dissemination and knowledge utilization models still suffer from inherent linear bias; where these TT models have limitations in terms of their limited application in transferring technology across organizational boundaries (Tenkasi and Mohrman, 1995; Gibson and Slimor, 1991).

2.4.1.4 The Communication Model Departing from the previous three models, several researchers have suggested that the communication model is a replacement of the earlier TT models (Williams and Gibson, 1990; Gibson et al., 1990; Doheny-Farina, 1992). This model perceives TT as a communication and information flow process with communication understood to be concerned with full exchange and sharing of meanings. This model suggests technology as an on-going process which involves a two-way interactive process (non-linear) by

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continuously and simultaneously exchanging ideas among the individuals involved (Williams and Gibson, 1990). Consistent with this approach, other researchers view communication model of TT follows the network communication paradigm, where feedback is all pervasive and the participants in the TT process are transceivers rather than the sources and receivers (Gibson and Slimor, 1991; Irwin and Moore, 1991).

Other researchers acknowledged that feedbacks help participants in the transfer process to reach convergence about the important dimensions of the technology (Rogers, 1983; Rogers and Kincaid, 1981). To overcome the obstacles and barriers to transfer process, different sets of functions, activities and network must occur simultaneously (Rogers, 1983; Kozmetsky, 1988a, 1988b). The communication model which consists of characteristics such as two-way communication, interactive and interpersonal/organizational communication helps to explain the failures of the previous TT strategies which are based on one-way unidirectional communication and dissemination/diffusion models (Irwin and Moore, 1991). Two-way interactive communication is primarily developed towards overcoming the communication barriers between the technology developer group and the user group (Doheny-Farina, 1992; Dobrin, 1989).

This model assumes that there is a body of information, of objective facts, just lying there waiting to be communicated (Dobrin, 1989). The underlying presumption is that knowledge is an object that exists independently, valid, complete and has universal applicability (Tenkasi and Mohrman, 1995). The implementer (technology developer) is responsible for transferring knowledge correctly through appropriate channels for the user to understand, and

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failure to adopt knowledge is simply because the users fail to understand (Tenkasi and Mohrman, 1995).

Although the communication model shows an appreciation of the complexities of TT, however, this model is unable to provide explanations on 1) the complexities of TT in the context of knowledge transferred through collaborative learning, 2) the subjectivity of knowledge, and 3) the need for contextual adaptation, dialoging at the level of values, assumption and beliefs that takes on more acute proportions with soft or disembodied technologies (Tenkasi and Mohrman, 1995). This view is consistent with the earlier studies on TT which suggests that the focus of current management researchers is on TT in strategic alliances/IJVs and learning at the organizational level in facilitating TT (Zhoa and Reisman, 1992; Figuereido, 2001).

2.4.2 Technology Transfer (TT) Models After 1990s A review of the literature reveals that TT researchers have attempted to develop new technology transfer models distinguishing them from the traditional models developed earlier which mainly focused on TT processes. The later models developed by researchers (Gibson and Slimor, 1991; Rebentisch and Ferretti, 1995; Sung and Gibson, 2000) attempt to address the limitations that arise from the traditional TT models in terms of their application in contemporary high-tech industries (Gibson and Slimor, 1991). Several models developed after 1990s have emphasized on 1) the important element of communication between the technology developer and the receiver or between different organizations, 2) the levels of TT,

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3) the factors which influence TT and KT and 4) the inter-firm TT processes in IJV (Gibson and Slimor, 1991; Sung and Gibson, 2000; Rebentich and Ferretti, 1995).

2.4.2.1 Gibson and Slimors Model This model describes TT from the perspective of technology researchers and users through three levels of involvement (Figure 2.1 below). The underlying theories of this model are the organization and communication theories (Gibson and Slimor, 1991). This model proposes that TT consists of three levels of involvement: Level I (Technology Development), Level II (Technology Acceptance), and Level III (Technology Application). This model explains the levels of technology transfer involvement and integrates the activities involved in the traditional models. Figure 2.1: Technology Transfer at Three Levels of Involvement

Level III Technology Application Level II Technology Acceptance Level I Technology Development

(Source: Gibson and Slimor, 1991)

The technology development, acceptance and application levels are described as follows: Technology Development: This level is considered the most important level where the transfer process is viewed as passive through transfer means such as research reports, journal articles and computer tapes. This level relates to the appropriability model where the

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emphasis is on the importance of quality of research and competitive market pressure in achieving technology transfer (Gibson and Slimor, 1991).

Technology Acceptance: This level indicates more involvement of TT. At this level the technology developer is responsible in making certain that the technology is made available to the receptors that can understand and potentially use the technology. This level of involvement relates to the dissemination model where the concentration is on disseminating innovations to individual users (Gibson and Slimor, 1991).

Technology Application: This level is the most involved level of TT. Technology application includes commercializing the use of technology in the marketplace and other application such as intra-firm processes. This level equates with knowledge utilization model where the emphasis is on the critical element of interpersonal communication between technology developers and users, and the organizational barriers and facilitators of TT (Gibson and Slimor, 1991).

2.4.2.2 Sung and Gibsons Model This model is developed to have similar objectives as Gibson and Slimors (1991) model that is to address limitations in the traditional TT models. As an expansion and improvement to the three levels involvement model of TT (Gibson and Slimor, 1991), this model (Figure 2.2, below) provides plausible explanations as to the levels and factors affecting knowledge and technology transfer by describing knowledge and technology transfer in four levels of

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involvements: Level I (Knowledge and Technology Creation), Level II (Sharing), Level III (Implementation) and Level IV (Commercialization) (Sung and Gibson, 2000). Figure 2.2: Four Levels of Knowledge and Technology Transfer

Level IV Commercialization Level III Implementation Level II Sharing Level I Creation

(Source: Sung and Gibson, 2000)

Sung and Gibson (2000) describe the model as follows: Creation: At this level, the technology developers conduct and develop research into knowledge and make available their results/findings through research publication, videotapes, teleconference, news and anecdotes. TT at this level is considered as a passive process where it needs only minimum involvement of all participants (Sung and Gibson, 2000). Sharing: At this level, technology developers and users begin to share responsibility as the success of technology transfer occurs when knowledge and technology are transferred across personal, functional or organizational where knowledge and technology are well accepted and understood by users (Sung and Gibson, 2000). Implementation: At this level, success is determined by the timely and efficiency of knowledge and technology transfer and the users resources ability to implement KT and TT 53

may occur through manufacturing transfer, processes transfer or services and best practice transfer (Sung and Gibson, 2000). Commercialization: At this level, knowledge and technology are commercially utilized. The commercialization level is built cumulatively on the success of creation, sharing and implementation levels with the help of market strength. Success of the implementation level is measured by return of investment (ROI) and increased market share (Sung and Gibson, 2000).

2.4.2.3 Rebentisch and Ferrettis Model Rebentisch and Ferretti (1995) propose an integrated model of TT process developed from the insights derived from their study of two IJVs. According to Rebentisch and Ferretti (1995) TT areas require further investigation and integration particularly on 1) the effect of interdependencies between technology characteristics and its organizational context, and 2) the interface between the core competencies of the firm and its ability to adopt new technology. The model (Figure 2.3 below) addresses the issues on 1) how much effort is required to transfer different types of technologies, and 2) what impact the organizations existing competencies might have on that process. This model refers TT as the transfer of the embodied knowledge assets between organizations. The TT process in this model consists of four categories which include 1) Transfer Scope, 2) Transfer Method, 3) Knowledge Architecture, and 4) Organizational Adaptive Ability.

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Figure 2.3: The Technology Transfer Process Framework


Organizational Adaptive Ability Transfer Scope Transfer Method Transfer Success

Differences in Knowledge Architecture

(Source: Rebentisch and Ferretti, 1995)

Transfer Scope: The scope of transfer is determined by how much information is embodied in the technology and what type of technologies a firm seeks to acquire from the source. Based on this model the transfer scope consists of four types of technologies: General knowledge, Specific knowledge, Hardware, and Behaviors. Transfer Method: This model categorizes the transfer methods in the TT process as 1) Impersonal communication, 2) Personal communication, 3) Group interaction, and 4) Physical relocation. Knowledge Architecture: Knowledge architecture is defined as a characterization of the structure and artifacts into which knowledge has been embodied in the organization and describes the way organization stores and processes information (Rebentisch and Ferretti, 1995). Knowledge architecture has four critical elements which influence TT process 1) technology hardware, 2) experience base, 3) procedures, and 4) organization power structures. These elements correspond with the level of technologys complexity and compatibility with the existing organization, the costs and extent of change involved in implementing it and the possibility of encountering any opposition (Rebentisch and Ferretti, 1995).

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Organizational Adaptive Ability: Organizational adaptive ability is the adoption of the organizations ability to utilize its resources to make adaptations either to itself or to a new technology (Rebentisch and Ferretti, 1995). Organizational adaptive ability consists of staffing and production flexibility.

This model which was developed based on two IJVs mainly offered the theoretical insights of TT process of hardware/embodied technology (explicit knowledge) where no hypothesis testing and empirical examination has been conducted. Since this model was developed from the transferring partners perspective thus it suffers from inherent linear bias where relationships between partners and contextual dimensions of JVs have not been considered.

2.4.3 Discussion From the above review, the early TT models were developed to govern the implementation of TT activities and their application to market place where much emphasis was given on 1) the promotion, adoption and diffusion of new innovations and technologies to potential users and 2) TT processes. The TT model after the 1990s were developed to address weaknesses and limitations in the traditional TT models by focusing more on communication elements between TT participants, level of TT, factors that influence TT and TT processes in IJVs. Based on the above literature review, several limitations in the previous TT models have been identified as follows: 1) prior to 1990s many TT model concentrate on the adoption and diffusion of innovations which were based on appropriability, dissemination or knowledge utilization approach (Devine et al., 1987; Rogers, 1983; Rogers and Kincaid, 1981), 2) The pre 1990s TT model focused less on two-way inter-personal communication or relationship

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between the sender (supplier) and receiver (recipient) (Devine et al., 1987; Rogers, 1983; Rogers and Kincaid, 1981), 3) before 1990s limited models were developed to explain the interdependencies between technology and organizational and environmental context such as organization and culture distance (Rebentisch and Ferretti, 1995), 4) before 1990s there was limited number of inter-firm TT models on strategic alliance or IJVs (Zhoa and Reisman, 1992) instead many studies emphasized on the intra-firm TT (Gibson and Slimor, 1991), 5) prior to 1990s only limited TT models have conceptualized the impact of software technology (disembodied) or tacit knowledge and its properties on TT where many TT models have focused on the hardware technology (embodied technology) or explicit technology (Bessant and Francis, 2005), and 6) previous TT models do not provide frameworks on organizational learning especially on how technology is acquired, learned, shared and transferred within and outside the organizational boundary (Sung and Gibson, 2000).

2.5 Theoretical Foundation of Study Besides reviewing the TT models from previous literatures, an understanding of the related theoretical perspectives underlying this study is necessary to enable the readers to relate with the practical and empirical aspects. From a review of the literature, the relevant theories which are found to be related to TT are the international trade theory, FDI theory, KBV perspective and OL perspective.

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The international trade theories, which consist of the classical trade theory (Ricardo, 1817; Smith, 1776), the factor proportion theory (Hecksher and Ohlin, 1933) and the product life cycle theory (Vernon, 1966, 1971; Wells, 1968, 1969), are related to TT studies as these theories provide plausible explanations on how trades between countries contribute to the flow of production or goods and services which have brought along the technology embedded in them. The FDI theories are related to TT studies as these theories provide explanations on how FDIs by MNCs become the main channel for intra-firm technology transfer; where technology is transferred to MNCs subsidiary or affiliates in the host countries. FDI theories consist of the market imperfection theory (Hymer, 1960, 1970; Kindleberger, 1969; Caves, 1971), international production theory (Dunning, 1980), internationalization theory (Buckley, 1982, 1985; Buckley and Casson, 1976), and transaction cost theory (Williamson, 1975; Ouchi, 1980; Williamson and Ouchi, 1981).

However, for the purpose of this study which focuses on examining the relationship between inter-firm TTCHARS and TTDEG, the most relevant theories are KBV and OL perspectives. This study contends that KBV and OL perspectives have tremendously contributed to TT literature in terms of providing valuable arguments, theoretical insights, empirical findings, hypotheses development, testable constructs and reliable measurements (Simonin, 1999a). Furthermore, technology transfer does not only require a successful transmission of knowledge by the supplier but also a successful knowledge absorption and use by the recipient (Devanport and Prusak, 1998, 2000). Therefore, by using these perspectives which are strongly interrelated, this study will be able to capture and explain the effect of critical knowledge characteristics, behavioral elements of the actors and facilitators/barriers on

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degree of technology, where these characteristics are mainly attributed to knowledge transferred, attitudes of both technology supplier and recipient and their relational and contextual factors (Szulanski, 1996). The streams of literature on TT, KBV and OL perspectives are quite similar along various dimensions for example the outcomes, processes, barriers and facilitators (Daghfous, 2004).

2.5.1 Knowledge-Based View Perspective (KBV) and Technology Transfer (TT) In the late 1980s and early 1990s, knowledge-based economies which are based on the production, distribution and use of knowledge and information, have emerged as the dominant perspective in the management fields. Knowledge has been regarded as the catalyst of organizational competitiveness and economic growth. The KBV perspective, which is originally developed from resource-based view of the firm (RBV) perspective (Wernerfelt, 1984; Barney, 1991), has been developed to response to the change in the environment where in the information era knowledge especially tacit knowledge is acknowledged as one of the most important strategic resources (Grant and Baden-Fuller, 1995; Grant, 1996a, 1996b, 1997). These researchers explain the relationship between a firms knowledge integration and its competitive advantage based on the resource and capability perspective. Knowledge integration in a firm will lead to the firms organization capability which in turn determines its sustainable competitive advantage.

KBV perspective suggests that firms as a bundle of knowledge emphasize on firm-specific, intangible, non-tradable and inimitable knowledge as durable sources of sustainable competitive advantage of the firm (Spender, 1996; Barney, 1991). Past studies on KBV

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perspective have focused on knowledge as a key competitive asset. Many studies have emphasized on the capacity of firms to integrate tacit knowledge (Grant and Baden-Fuller, 1995; Conner and Pralahad, 1996). KBV perspective is primarily concerned with human resource than other physical resources of the firm since human resource plays an important role in the process of knowledge creation, knowledge transfer and acquisition within organizations (Conner and Pralahad, 1996; Kogut and Zander, 1996).

KBV perspective is critical in explaining how firms gradually grow and achieve sustainable competitive advantage through knowledge creation and learning (Kogut and Zander, 1992, 1993; Spender, 1996). As repository of knowledge, firms build their firm-specific knowledge and accumulate it over time, which makes them specialize in specific product or service (Dierickx and Cool, 1989; Kogut and Zander, 1993). Firms expanding abroad transfer to their foreign subsidiaries firm-specific ownership advantages such as superior production, marketing and technical knowledge because of the inherent disadvantage of operating in the host countrys environment (Hymer, 1970). The intra-firm knowledge transfer of superior knowledge is viewed as an effective means of replication and exploitation of the ownership advantage for economic rents (Kogut and Zander, 1993).

However, recent studies argue that firms are no longer seen as repository of knowledge rather as an instrument to transfer knowledge across subsidiaries which contribute to knowledge development (Gupta and Govindarajan, 2000; Holm and Pedersen, 2000). As firm-specific knowledge is the important resource of the firm, tacit knowledge is more difficult to replicate and transfer than explicit knowledge (Mowery and Rosenberg, 1989). The firms tacit

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knowledge is not easily communicated and shared as it is highly personal deeply rooted in action and in an individuals involvement within a specific context (Nonaka, 1994). The individuals insights and skills that form tacit knowledge in human resource which are gained through personal experience are hard or impossible to articulate or transfer (Kogut and Zander, 1993; Nelson and Winter, 1982; Nonaka, 1994; Polanyi, 1962, Simonin, 1999a). Tacit knowledge acts as the glue that integrates mechanism in learning (Dhanaraj et al., 2004). On the other hand, explicit knowledge which is highly codifiable and transmittable in formal and systematic language, acts as the building blocks (Polanyi, 1967; Nonaka and Takeuchi, 1995).

A number of researchers such as Kogut and Zander (1992, 1993, 1996), Nonaka (1994), Nonaka and Takeuchi (1995), Nonaka et al. (1996), Grant (1996a, 1996b, 1997), Spender (1996), and Szulanski (1996) are among the researchers who have developed KBV perspective as a theory of the firm and strategy. These researchers stress on knowledge as the most important strategic resource which emphasizes the roles of knowledge acquisition, storage, replication, transfer, and creation in organizations.

2.5.1.1 Kogut and Zanders Model Kogut and Zander (1992) are among the first researchers who established the foundation for the knowledge-based theory of the firm when emphasizing the strategic importance of knowledge as a source of competitive advantage. Their work is focused on the idea that what firms do better than markets is the creation and transfer of knowledge within the organization. Knowledge, which consists of information and know-how, is not only held by

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individuals but is also expressed in regularities by which members cooperate in a social community. Firms as social communities act as a repository of capabilities determined by the social knowledge embedded in enduring individual relationships structured by organizing principles (Kogut and Zander, 1992). The organizing principles are referred to as the organizing knowledge that establishes the context of discourse and coordination among individuals with disparate expertise and that replicates the organization over time in correspondence to the changing expectations and identity of its members (Kogut and Zander, 1996).

This view was articulated and empirically tested in Kogut and Zander (1993). They assert that 1) firms are efficient means by which knowledge is created and transferred, 2) a common understanding is developed by individuals and groups in a firm through repeated interactions to transfer knowledge from ideas into production and markets, 3) what a firm does not depend on the markets failure rather on the efficiency in the process of transformation relative to other firms, and 4) the firms boundary is determined by the difference in knowledge and the embedded capabilities between the creator and the users (who possessed with complementary skills) and not market failure. Kogut and Zander (1996) further extend their discussion on the concept of identity by asserting that individuals are unsocial sociality; where they have both a desire to become a member of community and at the same time have a desire to retain their own individuality (Kogut and Zander, 1996). As firms provide a normative territory to which members identify, costs of coordination, communication, and learning within firms are much lower thus allowing for more knowledge to be shared and created within firms.

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2.5.1.2 Nonakas Model A stream of literatures has found consistent support for Kogut and Zanders (1992) model of organization knowledge creation and transfer (Nonaka, 1994; Nonaka and Takeuchi, 1995; Nonaka et al., 1996) for example 1) knowledge should be the basic unit of analysis for explaining a firms behavior, and 2) organization knowledge is socially constructed. This group of researchers proposes a model of knowledge creation which complements Kogut and Zanders (1992) model, by proposing a model for understanding the knowledge creation process in organizations in which organizational knowledge is created through a continuous dialogue between tacit and explicit knowledge.

This model proposes four modes of knowledge conversion 1) from tacit knowledge to tacit knowledge (socialization); a process of personalized form of tacit knowledge growth in which an individual passes on knowledge to another individual, 2) from tacit knowledge to explicit knowledge (externalization); a process where individuals take existing knowledge, add their tacit knowledge and create something new that can be shared throughout the organization, 3) from explicit knowledge to explicit knowledge (combination); a process where knowledge is gained by combining and synthesizing existing explicit knowledge from different sources, and 4) from explicit to tacit knowledge (internalization); a process where new explicit knowledge is internalized within members of the organization to create new tacit knowledge (Nonaka, 1994; Nonaka and Takeuchi, 1995).

Even though each of these modes may independently create knowledge, the organizational knowledge creation processes only occur when all the four modes are organizationally

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managed and dynamically interacted. This process which is highly interactive constitutes knowledge spiral which happens mainly through informal networks of relations in the organization starting from the individual level, then moves up to the group (collective) level and eventually to the organizational level. It creates a spiraling effects of knowledge accumulation and growth which facilitates organization innovation and learning (Nonaka, 1994; Nonaka and Takeuchi, 1995).

2.5.1.3 Grants Model Departing from Kogut and Zander (1992, 1993), Nonaka (1994) Nonaka and Takeuchi (1995), and Nonaka et al. (1996), Grant (1996a, 1996b, 1997) propose a different model of knowledge creation. Grant (1996a) has further articulated the theoretical arguments of knowledge-based view; which considers knowledge creation as an individual activity rather than an organizational activity. Several assumptions underlying the model are described as follows: 1) Knowledge is the important productive resource in terms of its contribution to value added and its strategic significance. 2) Knowledge consists of information, technology, know-how, and skills. Thus, different types of knowledge vary in their transferability. The critical distinction is between 1) explicit knowledge which is capable of articulation and transferable at low cost, and 2) tacit knowledge which is manifested only in its application and is not amenable to transfer. The ease with which knowledge can be transferred also depends upon the capacity of the recipient to aggregate units of knowledge.

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3) Individuals are the primary agents of knowledge creation and the principal repositories of knowledge especially tacit knowledge. If individuals learning capacity is bounded, knowledge creation requires specialization where increased depth of knowledge normally requires sacrificing breadth of knowledge. At the same time, production typically requires the application of many types of knowledge. 4) Most knowledge is subject to economies of scale and scope. This is especially the case with explicit knowledge that, once created, can be deployed in additional applications at low marginal cost (Grant and Baden-Fuller, 1995; Grant, 1997).

While knowledge resides within individuals and firms consist of multiple individuals with specialized knowledge, the firms role is to integrate this knowledge to enable it to produce products and services. Firms exist because of their efficient ability in creating conditions where many individuals can integrate their specialist knowledge (Grant, 1996a). Specialized knowledge can be integrated within firms through four mechanisms such as 1) rules and directives: where rules are standards which regulate the interactions between individuals and directives are what the specialists establish to guide the non-specialists, 2) sequencing; a mechanism to organize production activities in a time-patterned sequence in such that each specialists input occurs independently through being assigned a separate time slot, 3) routines; where the signals and responses developed by teams over time allow the complex interactions between individuals in a relatively automatic fashion, and 4) group problem solving and decision making: a mechanism used to perform unusual, complex, and important tasks that requires extensive personal interactions and communications. Common knowledge

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is important as a means through which multiple individuals can communicate to integrate knowledge (Grant, 1996b).

2.5.1.4 Spenders Model As opposed to traditional models of knowledge creation within organizations (Kogut and Zander, 1992; Nonaka, 1994; Grant, 1996a, 1996b), Spender (1996) proposes a dynamic rather than a static knowledge-based theory of the firm. Knowledge is viewed as a process or a competent goal-oriented activity rather than as an observable and transferable resource. Since knowledge is dynamic in nature and contained within actor network, a firm is a dynamic, evolving, quasi-autonomous, and organic system of knowledge production and application (Spender, 1996). A firm is a system of knowing activity and not a system of applied abstract knowledge (Spender, 1996). Other proponents of this view are Blacker (1995) and Orlikowski (2002). Blacker (1995) argues that traditional approach to knowledge is compartmentalized and static and further suggests that rather than discussing knowledge, it is more beneficial to discuss the process of knowing. Orlikowski (2002) suggests that the perspective which focuses on the knowledgeability of action (perspective on knowing) that is on knowing may be value in a perspective rather than knowledge.

2.5.1.5 Szulanskis Model Szulanski (1995) adopts a different approach to KT by adopting a communication metaphor (Shannon and Weaver, 1949) in analyzing intra-firm transfer of best practice in a manner analogous to the transmission of a message from a source to a recipient within a given media or context (Timbrell et al., 2001). While knowledge transfer is a distinct experience rather

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than diffusion, best practice transfer should be regarded as a process rather than a transaction or event (Szulanski, 1995). Szulanski (1996) proposes an intra-firm transfer of best practice model which views intra-firm transfer of best practice as an unfolding process where organizational routines are replicated through four stages of processes: 1) initiation, 2) implementation, 3) ramp-up, and 4) integration.

Initiation is described as comprising all events that lead to the decision to transfer. A transfer commences when both a need and the knowledge to meet that need coexist within the organization, possibly undiscovered. When the need is discovered, it triggers a search for potential solution; a search that leads to the discovery of superior knowledge (Szulanski, 1996). Implementation begins with the decision to transfer in which resources flow between the knowledge recipient and the source, the transfer-specific social ties between the source and the knowledge recipient are established, and the transferred practice is normally adapted with the objectives to suit the anticipated needs of the recipient to preempt problems experienced in a previous transfer of the same practice and to facilitate the introduction of new knowledge less difficult to the recipient (Szulanski, 1996). Ramp-up commences when the recipient begins to use the transferred knowledge. At this level the recipients primary concern is to identify and resolve unexpected problems that restrict its ability to match or exceed the transfer performance expectation (Szulanski, 1996). Integration starts when satisfactory result is achieved by the recipient from the transferred knowledge and the transferred knowledge is converted into the firms routine (Szulanski, 1996).

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Szulanski (1996) has explored the origin of internal stickiness and identified four sets of factors which are likely to have significant influence on the difficulty of knowledge transfer: 1) knowledge transferred, 2) source, 3) recipient, and 4) context where the transfer takes place. Central to Szulanskis (1996) model of intra-firm knowledge transfer, which was built on previous TT literature (Leonard-Barton, 1990; Teece, 1977; Rogers, 1983), is the importance of examining all the four sets of factors simultaneously in an eclectic model. Few researchers have developed their intra and inter-firm knowledge transfer framework based on this model (for example Szulanski, 2000, 2003; Gupta and Govindarajan, 2000; Minbaeva, 2007; Simonin, 1999a, 1999b, 2004). Building on Szulanskis (1996) model, the present study adopts and extends this model by developing a holistic inter-firm TT model that conceptualizes and explains the critical relationships/links between all technology transfer characteristics and degree of technology transfer in IJVs.

2.5.2 Organizational Learning (OL) Perspective and Technology Transfer (TT) Based on a review of the literature, the term organizational learning (OL) has existed in the literature since 1960s through researchers such as Argris (1964), Cangelosi and Dill (1965), and Cyret and March (1963). Past studies have defined OL from three different views. The first view describes OL as a process. Researchers who hold this view describe learning as cognition or information processing. OL is defined as 1) a development of insights, knowledge and associations between past actions, the effectiveness of those actions, and the future actions (Appelbaum and Goransson, 1997), 2) the process by which the organizational knowledge base is developed and shaped (Tsang, 1999), and 3) an organizational process,

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both intentional and unintentional, enabling the acquisition of, access to, and revision of organizational memory (Robey et al., 2000).

The second view emphasizes on the outcomes of OL such as change of behavior and improvement of organizational effectiveness. Proponents of this view describe OL as 1) a change in the behavior of individuals or groups within an organization leading to changes in the behavior of the organization itself (Reynolds and Ablett, 1998), 2) increasing an organizational capacity to take effective action (Kim, 1993) and changes in the behavior of the organizations knowledge and value base leading to improved problem solving ability and capacity for action (Probst et al.,1997), and 3) improving actions through better knowledge and understanding (Fiol and Lyles, 1985).

The third view integrates both views that link the learning process and outcomes. Researchers who hold this view describe OL as 1) a process that result in changed behavior in ways that lead to improved performance (Buckler, 1998), and 2) the development or acquisition of new knowledge or skills in response to internal and external stimuli that leads to a more or less permanent change in collective behavior, and enhancing organizational effectiveness (Sadler-Smith et al., 2001).

Other researchers have also described OL as 1) the environment adjustment process for achieving the specific goals of an organization and a common learning method of procedure of the organization (Lin, 2007), 2) the firms ability of evolution and action in response to the stimulation from the internal and external environment (Meyers, 1990), 3) the process of

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promoting organizational activities with better knowledge and understanding (Grant, 1996), and 4) the process of acquiring or internalizing the skills or know-how of the partners (Khanna et al., 1998).

An entity/organization learns if through its processing of information the range of its potential behaviors is changed, or if any of its unit acquires knowledge that it recognizes as potentially useful to the organization (Huber, 1991). Building on Hubers (1991) seminal work on OL, Miner and Mezias (1996) suggest that OL involves three key questions or issues 1) what are the learning processes, 2) who or what is doing the learning, and 3) when is learning valuable. The first question is closely related to the four constructs and processes of OL developed by Huber (1991). The four constructs are integrally linked to explain the OL process. The four constructs are described as follows: Knowledge Acquisition: This construct refers to the process of how knowledge is acquired or obtained. Knowledge acquisition consists of five stages of processes: 1) congenital learning 2) experiential learning 3) vicarious learning 4) grafting and 5) searching and noticing (Huber, 1991). Information Distribution: This construct relates to the process by which information from different sources is shared and thereby leads to new information or understanding (Huber, 1991). Information Interpretation: This construct refers to a process by which distributed information is given one or more commonly understood interpretations (Huber, 1991). Organizational Memory: This construct refers to the means by which knowledge is stored for future use (Huber, 1991).

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On the second question, Miner and Mezias (1996) suggest three levels of learning 1) the individual level; where individuals acquire and interpret information based on their personal cognitive maps and frameworks, 2) the group level; where the group decision-making of the firm will respond to performance feed-back with shared understanding and coordinated behavior, and 3) the organization level; where groups in the organization acquire knowledge through sharing of experience. With regard to the third question, the factors affecting the learning impact include learning rate, level of noise in the feedback process, numbers of the independent learning sub-units and the timing of learning (Miner and Mezias, 1996).

Hubers (1991) work on OL provides a useful framework in understanding how knowledge is acquired by organizations in the inter-firm relationship from outside the organizational boundary through grafting process (Inkpen, 2000). Through grafting, which is a sub-process of knowledge acquisition; organizations increase their store of knowledge by acquiring new knowledge not previously available within the organization either by mergers, acquisition or alliance (Huber, 1991). Thus, the focus of the present study directly relates to the grafting process which occurs at the OL level to explain how organizations (the partner firms) in the inter-firm relationship such as IJVs acquire and transfer knowledge between them (Huber, 1991; Inkpen, 2000; Tsang et al., 2004; Hau and Evangelista, 2007).

Knowledge acquisition through alliance may occur in various organizational arrangements of strategic alliance such as JVs, licensing agreements, distribution and supply agreements, research and development partnerships and technical exchanges (Inkpen, 1998a). Knowledge acquisition by organization through JVs is a multi-stage process (Inkpen and Dinur, 1998).

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The first stage begins with the formation of the JV where interactions between the individuals from two or more JV partners occur. The second stage is the grafting process where knowledge is transferred from JVs to the partners. In the final stage, for internalization to occur, the parent firms must first attempt to transfer the partners skill-related knowledge from JVs to themselves (Inkpen and Dinur, 1998).

Past studies on learning through alliance have acknowledged two main factors which affect knowledge acquisition 1) the accessibility of knowledge, and 2) the firms effectiveness at learning (Inkpen, 1998a, 2000). The accessibility to alliances knowledge mainly depends on knowledge tacitness and partner protectiveness (Inkpen, 1998a). Knowledge tacitness limits accessibility to knowledge when tacit knowledge; which is embedded in personal beliefs, experiences and values, is hard to formalize, not easily visible and difficult to communicate and share (Inkpen, 2000). Partner protectiveness inhibits knowledge acquisition in alliances when a high competitive overlap exists between partners. The transferring firms (the source) will be reluctant to share or transfer knowledge due to risk of knowledge spillovers to the opportunist learning partner (Inkpen, 1998a). In addition, knowledge must be accessible before it can be acquired and even if knowledge is accessible, it does not ensure acquisition. Thus, an effective knowledge acquisition is determined by 1) knowledge connections between parents firms and their JV, and 2) the nature of alliance knowledge and its relatedness to parent firms (Inkpen, 2000).

Bapuji and Crossan (2004), however, suggest that external learning by organizations could occur in three forms: 1) congenital learning: where a new firm learns from past experience of

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other firms in the industry, 2) vicarious learning: where firms learn from the experience of other firms, and 3) inter-organizational learning. In the inter-organizational learning, OL occurs through vicarious learning when organizations interact with each other in alliances or joint ventures (Bapuji and Crossan, 2004).

Few TT studies have suggested that OL perspective provides much needed rigor in the conceptualization of the TT process in terms of its depth and breadth. Daghfous (2004) views OL literature as necessary and a complementary component of the complete view of 1) TT as a learning process; and 2) technology recipient organizations as learning system (Levin, 1993; Daghfous, 2004; Bapuji and Crossan, 2004). A review of literature reveals that the previous researchers have proposed several OL models which explain 1) how an organization learns (Argyris and Schon, 1978), 2) the sources of knowledge (Mills and Friesen, 1992), 3) the OL process (Nevis et al., 1995), 4) how organizational knowledge is created (Nonaka, 1994), 5) the links between individual learning and OL (Kim, 1993), and 6) the OL and KT in IJVs (Tiemessen et al., 1997).

2.5.2.1 Argyris and Schons Model Argyris and Schon (1978) developed a three-fold typology of organizational learning: 1) single-loop, 2) double-loop, and 3) triple-loop (deutero) learning. Single-loop learning is described as the error-detection-and-correction process, where errors are detected and corrected to allow organizations to change their methods and rules to improve what is being done within existing programs or policies. As a result, organizations achieve their current objective more efficiently. In addition to the error-detection-and-correction, double-loop

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learning involves change of the value of organizations theory-in-use. This form of learning occurs when errors are detected and corrected in ways that involve changes in organizations underlying norms, policies and objective. Triple-loop (deutero) learning is learning how to learn; where the organizational members cognitive changes as a result of reflecting and inquiring into their previous learning experiences. Triple-loop learning is also a process how to execute single and double-loop learning (Argyris and Schon, 1978).

2.5.2.2 Mills and Friesens Model This model describes the ways how organizations learn, where it focuses on the sources of knowledge. The model suggests that organizations learn through individuals in the organization. These individuals are hired because of their specific competencies or knowledge which may be gained during on the job training or formal training. Learning is an individual phenomenon which benefits the organization entirely through individual members. OL should involve systemizing knowledge into its practices, processes, and procedures that are the reutilization of knowledge. When individuals do not use knowledge or resign, knowledge will still remain with organizations thus indicating that the organizations have learned something. If organizations acquire or merge with other organizations, OL occurs when the acquired organizations absorb the acquiring organizations practices and procedures, or adds to its personnel knowledge which is embodied in the acquired organizations processes and personnel (Mills and Friesen, 1992).

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2.5.2.3 Nevis, DiBella and Goulds Model Nevis et al. (1995) propose a three-stage model of OL: 1) knowledge acquisition, 2) knowledge sharing, and 3) knowledge utilization. Knowledge acquisition refers to the development or creation of skills, insights, and relationship. Knowledge sharing relates to the dissemination of knowledge that has been learned. Knowledge utilization is the integration of learning to make it widely available; where it can be generalized to new environments. OL may occur in planned or informal ways. Knowledge and skill acquisition occur not only through acquisition but also through knowledge sharing and utilization (Nevis et al., 1995).

2.5.2.4 Nonakas Knowledge Spiral Model Nonaka (1994) proposes a model describing how organizational knowledge is created through different channels of interaction between tacit knowledge and explicit knowledge. Nonaka (1994) suggests four modes how knowledge is created through: 1) socialization process (tacit to tacit knowledge creation), 2) externalization process (tacit to explicit knowledge creation), 3) combination process (explicit to explicit knowledge creation), and 4) internalization process (explicit to tacit knowledge creation). A discussion on this model has been provided in section 2.6.1.2.

2.5.2.5 Kims Model Kim (1993) proposes an integrative model describing the link between individual learning and organizational learning; where organizations learn through their individual members is influenced either directly or indirectly by individual learning. This model describes OL as not only a collective individual learning but also involves the transfer mechanism between

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individual and OL; where individual learning becomes embedded in an organizations memory and structure. In this sense, individual learning affects learning at organizational level by its influence on the organizations shared models. This model stresses that organizations learn only through its members and learning does not depend on any specific members. However, individuals can learn without the organization. OL process is viewed from two perspectives: 1) the collective learning, and 2) the cognitive-outcome perspectives. The collective learning perspective describes how knowledge through individual learning becomes organization shared knowledge, and the cognitive outcome perspective indicates that knowledge acquired through individual learning can lead directly to individual action or indirectly to organizational action through knowledge sharing (Kim, 1993).

2.5.2.6 IJV Knowledge Management Model Building on Parkhe (1993) and Toyne (1989), Tiemessen et al. (1997) propose a model of OL and KT in IJVs based on input-process-output model (Figure 2.4 below). According to this model there are four critical elements involved in OL and knowledge transfer in IJV: Structure, Conditions, Process, and Outcomes. Tiemessen et al. (1997) proposed three phases of inter-organizational learning in JV.

The first phase is transfer process; where two independent firms form a JV and both firms transfer and contribute resources in terms of their existing stock of competencies. Transfer is described as the movement/migration of knowledge between the parents firms, directly or indirectly, through activities such as buying, observing and imitating technology used by the other JVs partner or modifying/changing the existing technologies based on the partners

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direction. Transfer means to accept the partners knowledge, to integrate knowledge into ones own systems or changing ones own resources to imitate knowledge (Tiemessen et al., 1997).

The second phase is transformation process; where through joint activities these competencies are then transformed and enhanced to reflect the combined pool of knowledge and skills as well as new knowledge and skills created from the alliance. Knowledge transformation is the extension of existing knowledge and the creation of new knowledge within the JV. Thus, transformation is defined as the integration, application and leveraging of contributed knowledge and the creation of new knowledge as a result of IJV activities. Figure 2.4: Knowledge Management in JV
Conditions Partner choice Control mechanism Motivation Expectation Experience Structure and Process Outcomes Learning outcomes +No learning +IJV learning +Parent learning Performance outcomes +IJV performance +Parent performance

Parent A Transfer Harvesting Joint Venture Transformation

Parent B

Harvesting

(Source: Tiemessen et al., 1997)


(Source: Tiemessen et al., 1997)

Knowledge resources: Firm-specific Marketing-specific

Resources-integration Partnering

The successful exploitation of an advantage internationally may require an adaptation of the technology, system, or management practices, or all of them to the local environment (Casson, 1993). Collaborating with local partners is crucial in ensuring appropriate and correct adaptation, and opportunities to improve own capabilities. Through adaptation process, resource integration and partnering, knowledge is created (Tiemessen et al., 1997). 77

The third phase is harvesting process; where partners harvest knowledge and skills from IJV and bring them back to the parent firms. Harvesting is described as a process of retrieving knowledge that has already been created and tested from the IJV resources in which it resides, and internalizing it into the parent firm so it can be retrieved back and used in other applications. Knowledge harvesting process is different from transfer and transformation process because the process is more difficult and not straightforward (Tiemessen et al., 1997). Knowledge harvesting by the parent firm is contingent upon the top managements active role in JV and proper communication with the JV managers (Lyles, 1988).

2.5.3 Discussion The above review provides a comprehensive understanding on the significance influence of KBV and OL perspectives in shaping past, current and future TT models. Based on the strong influence of KVB and OL perspectives, the TT models which were previously developed using these perspectives have become the main foundation of this studys conceptual framework; where the integrated KBV and OL perspective are used to provide explanations and plausible arguments specifically on 1) how KBV and OL perspectives could play significant role in explaining the complex relationships between the supplier and recipient in inter-firm technology transfer, 2) the tradeoffs that involve between properties of technology, protecting proprietary technologies, competitiveness of the supplier, willingness and motivation to transfer technology, and learning attitudes of the recipient in strategic alliances and JVs, and 3) how KVB and OL perspectives could be integrated in a holistic model to explain the relationships between knowledge transferred, the recipient, the supplier, relationship characteristics and degree of technology transfer.

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2.6 A Review on the Factors Influencing Inter-Firm Technology Transfer (TT) The present study focuses on the complex process of inter-firm technology transfer; where technology and knowledge are transferred across organizational boundary between unaffiliated partners from different economic and cultural backgrounds. Both TT and KT process in strategic alliances, particularly IJVs, provide the most adequate vehicle for internalizing the partners competency (Simonin, 1999a; Inkpen, 2000; Inkpen and Dinur, 1998). In the context of this study, the theoretical perspectives from KBV and OL have indeed contributed valuable understanding on TT and KT in strategic alliance (Simonin, 1999a; Minbaeva, 2007). This study suggests knowledge as the critical element underlying technology and TT (Hall and Johnson, 1970; Kanyak, 1985; Shiowattana, 1987; Das, 1987; Williams and Gibson, 1990; Hayden, 1992; Gibson and Rogers, 1994; Kogut and Zander, 1993; Grosse, 1996). A review of the literature of both theoretical and empirical studies reveals that the success or failure of inter-firm TT and KT are strongly influenced by various factors, which can be broadly categorized as knowledge (KCHAR), technology recipient (TRCHAR), technology supplier (TSCHAR), and relationship (RCHAR) characteristics.

2.6.1 Knowledge Characteristics (KCHAR) Past studies have identified that KCHAR such as tacitness, complexity, specificity (Kogut and Zander, 1993; Inkpen and Dinur, 1998, Simonin, 1999a, 1999b, 2004; Pak and Park, 2004; Inkpen, 2000; Minbaeva, 2007; Makhija and Ganesh, 1997; Lei et al., 1997; Inkpen, 1998a, 1998b, 2000; Parise and Handerson, 2001; Mohr and Sengupta, 2002), knowledge relatedness (Inkpen, 2000; Lyles et al., 2003), desirability (Pak and Park, 2004), ambiguity (Simonin, 1999a) and availability (Minbaeva, 2007) as the important determinants of intra

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and inter-firm knowledge transfer. Knowledge tacitness, specificity and complexity have contributed significantly to knowledge ambiguity in imitation (Reed and DeFillippi, 1990) and knowledge migration (Szulanski, 1996).

2.6.2 Technology Recipient Characteristics (TRCHAR) The recipient characteristics that have been identified to influence TT and KT are absorptive capacity (Cohen and Levinthal, 1990; Hamel, 1991; Lyles and Salk, 1996; Mowery et al., 1996; Lane and Lubatkin, 1998; Lane et al., 2001; Gupta and Govindarajan, 2000, Minbaeva et al., 2003, Minbaeva, 2007; Pak and Park, 2004), experience (Simonin, 1999a, 1999b), prior knowledge and experience (Inkpen, 1998a, 1998b, 2000; Tsang, 2001), knowledge relatedness (Inkpen, 2000), learning capacity (Makhjia and Ganesh, 1997; Parise and Henderson, 2001), receptivity (Hamel, 1991; Baughn et al., 1997), learning intent or objectives (Beamish and Berdrow, 2003; Hamel, 1991; Simonin, 2004; Inkpen and Beamish, 1997; Baughn et al., 1997; Inkpen, 1998a; Mohr and Sengupta, 2002), managerial belief rigidity (Inkpen and Crossan, 1995), and recipient collaborativeness, readiness and method comprehensiveness (Yin and Bao, 2006).

2.6.3 Technology Supplier Characteristics (TSCHAR) A stream of studies has identified numerous TSCHAR such as motivation (Gupta and Govindarajan, 2000; Szulanski, 1996), partner protectiveness (Simonin, 1999a, 1999b, 2004; Szulanski, 1996, Inkpen, 1998a, 1998b, 2000), partner assistance (Lyles et al., 1999), partner transparency (Hamel, 1991), disseminative capacity (Minbaeva and Michailova, 2004), control (Lyles et al., 2003), prior experience (Subramaniam and Venkataraman, 2001),

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transferors commitment (Tsang et al., 2004), articulated objective or goal clarity (Lyles and Salk,1996; Inkpen, 2000) and source transfer capacity (Szulanski, 1996; Martin and Solomon, 2003) to have significant influence on knowledge transfer.

2.6.4 Relationship Characteristics (RCHAR) A large stream of literatures has identified the RCHAR which include JVs characteristics, as organizational distance (Simonin, 1999a, 1999b), cultural distance (Lyles and Salk, 1996; Mowery et al., 1996; Choi and Lee, 1997; Inkpen, 1998a, 1998b, Liu and Vince, 1999), organizational context (Kogut and Zander, 1993; Zander and Kogut, 1995), knowledge connection (Inkpen, 2000), organizational structure (Inkpen, 1997), ownership type (Kogut, 1988; Mowery et al., 1996), ownership equity (Pak and Park, 2004), relationship openness (Hamel, 1991; Inkpen, 2000), partners attachment (Inkpen and Beamish, 1997), inter-partner trust (Baughn et al., 1997; Morrison and Mezentseff, 1997; Love and Gunasekaran, 1999, Inkpen, 2000), empathy (Buckley et al., 2002), relationship quality and strength (Szulanski, 1996; Lin, 2005), relational openness (Wathne et al., 1996), relational capital (Kale et al., 2000), informal relationship (Clarke et al., 1998), articulated goals and management commitment (Choi and Lee, 1997; Morrison and Mezentseff, 1997), and legal, political and technical differences ( Marcotte and Niosi, 2000).

2.6.5 Discussion Based on the extensive number of literature in this area, past studies have examined the relationships between technology and knowledge transfer characteristics from many dimensions of knowledge, recipient, supplier and relational/contextual. However despite its

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extensiveness, majority of the studies are either theoretical or case studies which focused on few main determinants of inter-firm technology transfer. Since the present study proposes a holistic model in conceptualizing the critical relationships between the characteristics of knowledge, technology recipient, technology supplier, relationship and degree of technology transfer in a single model, therefore based on the literature review conducted by this researcher, the main criteria for selecting the elements/variables that represent each technology transfer determinant (knowledge, recipient, supplier and relationship) are primarily based on seven aspects as follows: 1) each element/variable has a strong representation of the main determinants, 2) these elements have strong theoretical foundation but they have not been empirically tested before or they have been tested but failed to obtain statistical supports thus suggesting inconsistencies of results, 3) the availability of measurement of constructs from previous empirical studies, 4) this study examines all the relationships from the technology recipients perspective in the context of IJVs in developing countries, 5) this study is conducted in response to suggestions made by previous studies which highlighted that these variables are still empirically under researched and require further theoretical explanations and hypotheses testing, 6) the context of study is the interfirm technology transfer; where technology transfer process involves the successful transmission of technology by the supplier and successful technology adoption by the recipient, and 7) the KBV and OL perspectives are used as the underlying theories in this studys conceptual framework.

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2.7 Relationships between Knowledge Characteristics (KCHAR) and Degree of Technology Transfer The first TT characteristic that this study investigates is knowledge characteristics (KCHAR). The KCHAR form the first group of TT characteristic in this study. Based on the previous intra-firm knowledge transfer studies (Winter, 1987; Reed and DeFillippi, 1990; Szulanski, 1996; Zander and Kogut, 1995; Kogut and Zander, 1993; Minbaeva, 2007) and inter-firm knowledge transfer studies (Lyles and Salk, 1996; Mowery et al., 1996; Simonin, 1999a; Simonin, 1999b; Simonin, 2004; Inkpen, 1998a; Inkpen and Dinur, 1998; Pak and Park, 2004), as shown in section 2.6.1 above, this study reviews three critical elements of KCHAR: tacitness (TCT), complexity (COMPLX) and specificity (SPEC), and their relationship with degree of technology transfer (TTDEG) in IJVs. The KCHAR are expected to have a significant negative impact on TTDEG.

2.7.1 Tacitness (TCT) and Degree of Technology Transfer (TTDEG) Knowledge has been extensively classified in many different ways by the management literature (Foss and Mahnke, 2003). The classification includes individual vs. collective/group knowledge (Cook and Brown, 1999), tacit vs. explicit (Polanyi, 1962, 1967; Winter, 1987; Nonaka and Tekuichi, 1995), declarative vs. procedural (Anderson, 1981; Quinn et al., 1996; Garud, 1997), architectural vs. component (Henderson and Clark, 1990; Matusik and Hill, 1998), and private vs. public knowledge (Matusik and Hill, 1998). Another stream of literature has proposed taxonomies of knowledge of the firm from several dimensions. Winter (1987) proposes a taxonomy which identifies four dimensions of knowledge of a firm: tacit/articulable, observable/not observable in use,

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complex/simple, and dependent/independent of a system. The dimension of knowledge taxonomy also include tacit/explicit, not teachable/teachable, not

articulated/articulated, not observable in use/observable in use, complex/simple and system/independent (Kogut and Zander, 1993; Zander and Kogut, 1995). Zander and Kogut (1995) have further classified tacit knowledge into three dimensions: codifiability, teachability and complexity. Even though knowledge may be classified using many different dimensions, the dimension that appears to be particularly relevant to TT is tacit vs. explicit dimension (Marcotte and Niosi, 2000; Grant, 1996a, 1996b, 1997).

The concept of tacit knowledge originated from the famous work of Polanyi (1962) who asserts that we can know more than what we can tell. Tacit knowledge is knowledge that is non-verbalizable, intuitive and unarticulated, developed through the transfer of contextspecific knowledge, embedded in non-standardized and tailored process, and difficult to acquire and exploit (Polanyi, 1967). Tacit knowledge is derived from accumulated experience and is reflected in the expertise, skills and routines acquired by organizational members over time (Winter, 1987).

From a literature review, previous researchers have theoretically described tacit knowledge as: 1) the implicit and non-codifiable accumulation of skills resulting from learning by doing, accumulated through experience and refined by practice (Reed and DeFillippi, 1990), 2) a source of ambiguity embodied within the skill component of competencies that raises barriers to imitation (Reed and DeFillippi, 1990; Simonin, 1999a), 3) highly personal, deeply rooted in action, commitment, and involvement within a specific context that makes it hard to be

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formalized, communicated and shared (Nonaka, 1994), 4) a main source of ambiguity in knowledge transfer in strategic alliance (Simonin, 1999a; Simonin, 1999b), 5) a durable source of competitive advantage to a firm because of its imperfect imitability and substitutability (Barney, 1991; Pralahad and Hamel, 1990; Reed and DeFillippi, 1990), 6) knowledge that is embedded in the social and administrative fabric of a company (Badarocco, 1991), and 7) knowledge that has not yet been abstracted from practice but which has been transformed into habit (Spender, 1996).

Studies have argued that tacit knowledge which includes insights, intuitions, hunches, rule of thumb, gut feeling, personal and organizational skills, and managerial and marketing expertise, is difficult to codify where it can only be observed through its application and acquired through practice (Nonaka, 1994; Lane et al., 2001). Thus, tacit knowledge transfer between individuals is slow, costly and uncertain (Kogut and Zander, 1992). Acquiring tacit knowledge is subject to time-compression diseconomies; which means to accelerate tacit knowledge learning is very difficult or perhaps not even possible no matter how much effort or resources are invested to acquire them within a short period of time (Dierickx and Cool, 1989; Lin, 2003). This is because tacit knowledge is unique to the knowledge owner, not codifiable in formulas or manuals, and cannot be easily reverse-engineered (Zander and Kogut, 1995).

Other theoretical studies have argued that tacit knowledge is hard to formalize, often sticky, not easily visible, and difficult to communicate, transfer and share between the alliance partners as it involves 1) intangible factors embedded in the personal beliefs, experiences,

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and values in an organization (Inkpen, 1998a, 2000), 2) internal individual processes like experience, reflection, internalization or individual talents (Nonaka, 1994), and 3) high incremental cost of transferring knowledge to a specified location in a form usable by a given party (von Hippel, 1994).

A number of studies have offered theoretical support by arguing that 1) the degree of knowledge tacitness of a particular competency and know-how influences the transfer outcomes (Simonin, 1999a, 1999b), 2) in the context of engineering tacit knowledge, the degree of tacit knowledge is equated with the extent of its non-transferability and differential between the engineer undertaking the learning and the production worker (Mody, 1989), 3) tacit knowledge acts as a main source of ambiguity that raises barriers to imitation when a skilled worker is unable to codify the decision, rules, and protocols that underlie performance (Reed and DeFillippi, 1990), 4) tacit knowledge such as intangible relational skills is more difficult to absorb and share (Loebecke et al., 1999), 5) the causal relationship between actions and results is ambiguous thus making tacit knowledge difficult for rivals to understand, imitate or match (Barney, 1991; Szulanski, 1996), and 6) the transfer of tacit knowledge often occurs through demonstration process, facilitated through face-to-face interaction and shared experience between the transferor and the recipient (Roberts, 2000).

On the other hand as opposed to tacit knowledge, explicit knowledge such as product technologies, physical distribution methods, and promotion techniques, lies in the organizations policies, systems, guidelines and standardized procedures thus could only be acquired, exploited and transferred inter-organizationally in a formal and systematic

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language (Polanyi, 1967; Nelson and Winter, 1982; Martin and Solomon, 2003). Explicit knowledge is referred to as knowledge that could be articulated, codified, shared and transferred in the form of data, formulae and principles, accessed using verbal communication and written documents through words and numbers, and is less likely to act as a firms competitive advantage (Kogut and Zander, 1992; Winter, 1987).

OL literature theoretically deals with tacit knowledge from several dimensions for instance 1) tacit knowledge as an important key in building the organizations competitiveness (Inkpen, 1998a), 2) organizational learning mainly occurs through transfer of tacit knowledge (Glaister et al. 2003), 3) organization capabilities often involve the acquisition of tacit knowledge (Makhija and Ganesh, 1997), 4) learning in JV is concentrated on the acquisition of tacit knowledge such as management skills and marketing know-how knowledge (Lane et al. 2001), and 5) knowledge tacitness determines the accessibility to alliance knowledge acquisition by partners (Inkpen, 2000).

From KBV perspective, Spender (1996) develops a comprehensive typology of organizational knowledge consisting of individual and social levels. While individuals have knowledge that is practical, communities have knowledge which constitutes the socialization and social activities of individuals within them. At the individual level, individuals constantly acquire knowledge, share knowledge with the organizational community and maintain a common individual knowledge with the co-workers (Spender, 1996). The organizational knowledges typology developed by Spender (1996) distinguishes tacit knowledge into three separate types: 1) automatic knowledge, 2) conscious knowledge, and 3) collective tacit

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knowledge. Automatic knowledge is an implicit knowledge that happens by itself and normally is taken for granted; whereas conscious knowledge is codifiable in a set of notes and is potentially available to other people. Collective knowledge is tacit knowledge of a social or communal nature.

In strategic alliances context, Inkpen and Dinur (1998) identify four key knowledge management processes that are commonly used by alliance partners to transfer explicit and tacit knowledge from an alliance to their partner: 1) technology sharing, 2) JV-parent interactions, 3) personnel transfers, and 4) strategic integration. According to Inkpen (1998a) 1) personnel transfers, which could be associated with explicit knowledge, are effective mechanisms to gain access to tacit knowledge, 2) technology sharing is a mechanism that facilitates access to explicit knowledge, and 3) alliance/JV-parent interactions and strategic integration create potentials for the acquisition of tacit and explicit knowledge (Inkpen, 1998a).

Inkpen and Dinur (1998) further argue that technology sharing and strategic integration have high degree of explicit knowledge transfer, and JV-parent interaction and personnel transfers may also consist of high degree of tacit (implicit) knowledge transfer as they involve culture and philosophy about business that are not based on specific rules or guidelines. Nonetheless, short term technology sharing and JV-parent interactions are less effective in transferring tacit knowledge. Personnel transfer and strategic integration which suggest a longer term for knowledge interactions and sharing, allow the largest amounts of knowledge to travel inter-

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organizationally. Long-term processes create potentials for a continuous flow of knowledge which leads to continuous learning and change (Inkpen and Dinur, 1998).

Apart from the theoretical aspect, a stream of empirical studies has examined the impact of knowledge tacitness on inter-firm knowledge transfer. In general a number of intra and interfirm knowledge transfer studies have found that knowledge TCT is negatively related to 1) knowledge transfer of manufacturing capabilities (Zander and Kogut, 1995), 2) knowledge transfer in strategic alliance by MNCs where the causally ambiguous nature of knowledge impedes technological knowledge transfer (Simonin, 1999a), 3) knowledge transfer of marketing know-how in strategic alliance by large and medium MNCs (Simonin, 1999b), 4) knowledge transfer of new product development and manufacturing skills between partners within IJVs (Pak and Park, 2004), and 5) the alliances knowledge transfer at organizational level and collective learning (Inkpen and Dinur, 1998). The degree to which capabilities are codifiable and teachable (two constructs used to measure TCT) significantly influence the speed of manufacturing capabilities transfer (Zander and Kogut, 1995).

2.7.2 Complexity (COMPLX) and Degree of Technology Transfer (TTDEG) A number of literatures has theoretically described COMPLX from five dimensions 1) COMPLX is closely associated with the amount of information required to characterize the item of knowledge in question (Winter, 1987), 2) COMPLX is a result of the interdependent skills and assets which arises from large numbers of technologies, organization routines and individual or team-based experience (Reed and DeFillippi, 1990), 3) COMPLX as the number of interdependent technologies, routines, individuals and resources linked to a

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particular knowledge or assets (Simonin, 1999a), 4) COMPLX as the number of critical and interacting elements embraced by an entity or activity (Kogut and Zander, 1993), and 5) COMPLX as an applied system whose components have multiple interactions and constitutes a non-decomposable whole (Singh, 1997). COMPLX of human and technological systems produce higher levels of ambiguity which restrains imitation and impedes transferability (Reed and DeFillippi, 1990). Kogut and Zander (1993) argue that the higher the degree of COMPLX of the manufacturing technology, the more difficult for knowledge to be transferred or imitated.

Singh (1997) suggests that a complex technology consists of 1) systematic technology, 2) multiple interactions, and 3) non-decomposable characteristics. Systematic technology refers to a complex good or technology which comprises elemental units or components; and is normally organized in hierarchies of sub-systems. The hierarchies structure of sub-systems creates complicated interdependencies between interrelated sub-systems and components. Although interactions between individual components are often seen as a simple and direct process, the occurrence of multiple interactions and feedback between components within the sub-systems, between components across sub-systems, and between sub-systems at various levels create complicated network of complex relationships. A product is non-decomposable when it is difficult to separate into its components without seriously degrading its capabilities or performance (Singh, 1997).

A review of literature reveals that very limited studies have empirically examined the direct impact of COMPLX on knowledge or technology transfer. Few studies have established that

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1) COMPLX is positively correlated to the choice of wholly-owned subsidiaries; where as the degree of technologys COMPLX increases, technologies are more likely to be transferred to wholly-owned subsidiaries rather than through other modes of TT such as joint ventures or licensing (Kogut and Zander, 1993), 2) COMPLX, as an antecedent of knowledge ambiguity, is negatively related to KT in strategic alliance (Simonin, 1999a, 1999b), and 3) COMPLX has a negative impact on degree of KT from MNCs headquarters to their subsidiaries (Minbaeva, 2007). However, Zander and Kogut (1995) find there is insignificant relationship between COMPLX and the speed of intra-firm manufacturing capabilities.

2.7.3 Specificity (SPEC) and Degree of Technology Transfer (TTDEG) SPEC originally refers to transaction costs of asset SPEC which was popularized by Williamson (1985). Asset SPEC, which includes site, physical, dedicated and human assets, refers to durable investments that are undertaken in support of particular transaction (Williamson, 1985). Building on Williamson (1985), Reed and DeFillippi (1990) define SPEC as transaction-specific skills and assets that are utilized in production processes and provision of services for particular customers. Through firm-customer relationship, the business actions resulting from the resource and skill deployment (competencies) are highly specific and inter-dependent with the firms internal or external transaction partners (Reed and DeFillippi, 1990).

Although sites or physical assets create limited ambiguity to imitation by rivals, dedicated assets such as the plants that are specifically designed for the production of goods and

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services for a specific customer and human asset SPEC are linearly and significantly related to ambiguity as these types of asset SPEC create barriers to imitation and are protected by the security and exclusivity of the firm-customer relationship (Reed and DeFillippi, 1990). Simonin (1999a, 1999b) narrowly views SPEC as durable investments in specialized equipment, facilities and skilled human resources. Asset SPEC is not only acting as a source of causal ambiguity and barrier to imitation where technology is difficult to be explicitly articulated (Lippman and Rumelt, 1982), but it also acts as a barrier to knowledge transferability (Simonin, 1999a).

The firms resources and competencies which are highly specific are difficult to imitate and transfer as they are embedded in context and idiosyncrasy of the firm (Kogut and Zander, 1993). Firms create sustainable competitive advantage by developing assets and competencies that are firm-specific, produce complex social relationships i.e. firm-customer relationship, embedded in a firms history and culture, generate organizational tacit knowledge and time consuming to develop (Lado and Wilson, 1994; Dierickx and Cool, 1989; Kogut and Zander, 1993).

Several empirical studies have examined the relationship between firm SPEC and KT. However, the empirical results indicate that the findings are rather inconsistent with the theoretical studies where 1) the effect of SPEC on KT, through its direct impact on ambiguity, is insignificant because the constructs lack of effect which needs to be further investigated for other types of competencies (Simonin, 1999a), and 2) SPEC, as one of KCHAR, has lost its significance effect to other KT determinants such as knowledge

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provider and receiver (Minbaeva, 2007). Nonetheless, Zander and Kogut (1995), who applied system dependence as having similar notion to SPEC, found that system dependence is negatively related to the probability to transfer. Recent findings by Pak and Park (2004) suggest that SPEC is negatively related to knowledge transfer of manufacturing technologies in IJVs.

2.8 Relationships between Technology Recipient Characteristics (TRCHAR) and Degree of Technology Transfer (TTDEG) The technology recipient characteristics (TRCHAR), as indicated in section 2.6.2, have been affirmed by many studies as one of the important determinants that affects KT. In this study TRCHAR form the second group of TT characteristic. This study reviews two critical elements of TRCHAR: absorptive capacity (ACAP) and recipient collaborativeness (RCOL), and their relationships with TTDEG. Based on past theoretical and empirical studies, ACAP and RCOL are expected to have a significant positive impact on TTDEG.

2.8.1 Absorptive Capacity (ACAP) and Degree of Technology Transfer (TTDEG) As TT involves the process of transmission and absorption of knowledge (Davenport and Prusak, 1998, 2000), the recipient firms ability to absorb the knowledge transferred heavily depends on their existing degree of absorptive capacity. Past studies have shown that a low degree of technology recipients ACAP impedes both intra and inter-firm KT (Cohen and Levinthal, 1990; Hamel, 1991; Lyles and Salk, 1996; Mowery et al., 1996; Lane and

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Lubatkin, 1998; Lane et al., 2001; Gupta and Govindarajan, 2000; Minbaeva et al., 2003; Minbaeva, 2007; Pak and Park, 2004; Simonin, 1999a, 1999b).

The concept of ACAP has been extensively reviewed in both theoretical and empirical studies. In their seminal paper, Cohen and Levinthal (1990) define ACAP as the firms ability to recognize the value of new external information, assimilate it, and apply it to commercial ends. ACAP of a firm is primarily a function of the recipient firms level of prior related knowledge. Prior related knowledge is closely related to the individuals units of knowledge available within the organizations. The accumulation of prior knowledge increases the ability to make sense of, assimilate and use new knowledge (Kim, 1998).

The firms ACAP tends to be developed cumulatively in which ACAP is more likely to be developed and maintained as a byproduct of routine activity when the knowledge domain that the firm wishes to exploit is closely related to its current knowledge base (Cohen and Levinthal, 1990). Prior related knowledge which includes basic/minimal skills, a shared language, positive attitude towards learning, relevant prior experience and up-to-date information on knowledge domain, is critical for an organization to assimilate and exploit new knowledge (Cohen and Levinthal, 1990; Szulanski, 1996, 2003; Minbaeva, 2007). By possessing sufficient prior related knowledge which is closely associated with new knowledge, organizations will have adequate ability to absorb new technological and innovative competencies/capabilities (Cohen and Levinthal, 1990).

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Based on the extensive literatures on ACAP, previous researchers have suggested various definitions, components (variables), and sub-components (sub-variables) of ACAP. A review of the literature reveals that previous studies have identified critical components of ACAP as 1) the ability to recognize, assimilate and apply new external knowledge (Cohen and Levinthal, 1990; Lane and Lubatkin, 1998; Lane et al., 2001; Thuc Anh et. al., 2006), 2) the acquisition, assimilation, transformation and exploitation capabilities (Zahra and George, 2002), 3) the employees ability and motivation (Minbaeva et al., 2003; Minbaeva, 2007), and 4) the ability to exploit sources of knowledge (Szulanski, 1996).

From these literatures a number of sub-components of ACAP have been suggested for example 1) the relevance of the student firms basic and specialized knowledge to the teachers knowledge base, and the similarity of the student firms and teachers compensation practices, structures and dominant logics (Cohen and Levinthal, 1990; Lane and Lubatkin, 1998), 2) trust between IJVs parents, cultural compatibility with foreign parents, prior knowledge from foreign parent, relatedness of IJV and foreign parents business, IJV flexibility, management support by foreign parents, training by foreign parents, formal goals for IJV, specialization of IJVs parents, IJVs business strategy, and IJVs training competence (Cohen and Levintahl, 1990; Lane et al., 2001), 3) the employees ability and motivation (Minbaeva et al., 2003, Minbaeva, 2007), and 4) investment in training, relatedness between IJV and foreign parents business, employees ability to learn, cultural distance, joint participation and written goals and plans (Cohen and Levinthal, 1990; Thuc Anh et al., 2006).

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Several theoretical studies have expanded the ACAPs concept developed by Cohen and Levinthal (1990). Lyles and Salk (1996) apply the concept by using a notion of capacity to learn or learning capability in examining the influence of capacity to learn on knowledge acquisition. In their re-conceptualization of the concept, Lane and Lubatkin (1998) propose ACAP as a dyad-level construct that denotes relative ACAP rather than firm-level construct. Lane et al. (2001) refine the concept by suggesting that the first two components of ACAP: the ability to understand and assimilate new external knowledge are interdependent yet distinct from the third component: the ability to apply new external knowledge. It is argued that Lane et al.s (2001) measures of relative ACAP are shown to have greater explanatory power than the established measure of absolute ACAP by Cohen and Levinthal; which is solely based on R&D intensity.

The other critical element of ACAP is intensity of effort. This concept is developed by Kim (1998). Intensity of effort is referred to as the amount of energy expended by organizational members to solve problems (Kim, 1998). Intensity of effort is achieved through organizational members focusing their considerable time and effort in learning how to solve problems before attempting to solve complex problems (Kim, 1998). Zahra and George (2002) re-conceptualize the concept by proposing ACAP to have four complementary dimensions capabilities which include 1) knowledge acquisition, 2) knowledge assimilation, 3) knowledge transformation, and 4) knowledge exploitation. Knowledge acquisition and assimilation capabilities form potential capacity; whereas knowledge transformation and knowledge exploitation capabilities form realized capacity (Zahra and George, 2002).

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Minbaeva et al. (2003) suggest that prior related knowledge is closely associated with Zahra and Georges (2002) concept of potential ACAP. Potential ACAP is expected to consist of high degree of prior knowledge base or employees ability. On the other hand, the element of intensity of effort is closely related to realized ACAP because of high degree of employees motivation. Minbaeva et al. (2003) integrate the elements of ACAP such as prior related knowledge (Cohen and Levinthal, 1990), intensity of effort (Kim, 1998), and the potential and realized ACAP (Zahra and George, 2002). The ACAPs elements of prior knowledge and intensity of effort are closely associated with the ability and motivation of employees, respectively (Minbaeva et al., 2003). Employees ability and intensity of effort are expected to be high in order to facilitate the absorption of knowledge from the other part of MNCs (Minbaeva et al., 2003; Minbaeva, 2007).

A stream of strategic alliance literatures has dealt with the concept of ACAP (for example Hamel, 1991; Simonin, 1999a, 1999b, Inkpen, 2000; Szulanski, 1996). Hamel (1991) applies the term receptivity to have similar notion to ACAP in explaining the organizations capacity to learn from their partner. Several factors have been identified as determinants of receptivity: 1) the appropriateness of resource deployment, 2) incentive systems, 3) attitudes towards learning, and 4) the propensity to unlearn (Hamel, 1991). In a similar vein, few researchers have expanded the concept of receptivity to include local parent receptivity; which refers to the readiness and ability of local parent to appreciate and receive the knowledge brought in by the foreign parent (Tsang et al., 2004; Gupta and Govindarajan, 2000).

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All partners are not equally adept at learning because the capacity to learn in strategic alliance mainly depends on the degree of receptivity of the partners. Inter-partner learning is determined by 1) the sense of confidence, which relates to partners learning attitudes and the need to unlearn, 2) the degree of skills gap with the industry leaders, 3) the absorptiveness of the receptors i.e. the ability to observe, interpret, apply and improve upon partner skills, 4) the top managements commitment to learning and 5) the capacity of the receptor to turn individual learning into collective learning (Hamel, 1991). Hamel (1991) further argues that learning becomes almost impossible if the skills gap between partners is too great.

The appropriateness of resource deployment, in terms of human and support assets, is the most valuable organizational capability that shapes learning outcomes (Simonin, 1999a). Therefore, an appropriate resource deployment should include 1) sufficient staff to solve immediate problems, 2) a highly trained staff assigned to alliances, and 3) the appropriate information processing and communication capabilities between the alliance and parent firms (Simonin, 1999a, 1999b).

Inkpen (1998a) maintains that knowledge acquisition effectiveness in JV which is closely associated with Cohen and Levinthals ACAP concept is also influenced by the intensity of efforts (learning efforts). Thus, it is insufficient for the partner firms to expose their employees to new knowledge as 1) learning could not occur without the parent firms active involvement/leadership commitment in the learning effort; especially when the parent firms over-emphasize on financial performance issues or if there is a lack of strong organizational culture alignment between partners, and 2) learning efforts take place at various

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organizational levels and by various actors (Inkpen, 2000); where at the individual level the process is to interpret knowledge, at the group level learning occurs through knowledge integration, and at the organization level the process is to integrate and institutionalize knowledge. In order for knowledge to spiral upward from individual to the parent organization level, knowledge must be connected through these various organization levels (Nonaka, 1994; Inkpen, 2000). Knowledge connections occur through both formal and informal relationships between individuals and groups thus creating potentials for individuals to share their observations and experiences (Inkpen, 2000; Nonaka, 1994). The internal managerial relationships through knowledge connections enhance 1) knowledge sharing and communication of new knowledge, 2) potentials for converting individual knowledge to organization knowledge, and 3) knowledge transfer effectiveness (Inkpen, 2000).

Research on ACAP by strategic alliance literature has a strong focus on the characteristics of particular combination of partners (Simonin, 2004). For example, Dyer and Singh (1998) refer partner-specific capacity as the ability to recognize and assimilate valuable knowledge from an alliances partner. Rather than focusing on firm-level singularities, other studies on ACAP in organizational learning literature have focused on partner similarities (Lane and Lubatkin, 1998), and the breadth and depth of overlap between partners (Mowery et al., 2002).

Besides the theoretical aspect past studies have offered empirical evidence as to the effect of ACAP on knowledge and technology transfer. A number of empirical studies on inter-firm KT have offered strong evidence on the relationship between ACAP and KT where 1)

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capacity to learn is a strong indicator of knowledge acquisition from foreign partners (Lyles and Salk, 1996), 2) ACAP is critical in the acquisition of capabilities in strategic alliance; where ACAP of the partners strongly depends on their prior experience in related technological fields (Mowery et al., 1996), 3) prior experience has a negative impact on ambiguity which impedes KT; where the greater/higher the levels of prior experience of knowledge seeker, the less ambiguous the knowledge to be transferred (Simonin, 1999a), 4) a lack of ACAP is one of the barriers to KT (Szulanski, 1996), 5) a higher ACAP of the local firms promotes more KT in new product development and manufacturing skills/techniques (Pak and Park, 2004), 6) the recipient readiness has a positive impact on tacit knowledge acquisition (Yin and Bao, 2006) and 7) the local parents receptivity is positively related to the amount of knowledge acquired from foreign partner (Tsang et al., 2004).

2.8.2 Recipient Collaborativeness (RCOL) and Degree of Technology Transfer (TTDEG) Recipient Collaborativeness (RCOL) mostly involves inter-firm KT between partners in collaborative relationship such as strategic alliances and joint ventures. In intra-firm KT, firms are expected to encounter fewer problems when transferring knowledge and technology to their own subsidiaries and affiliates within the organizational boundaries. Strategic alliances provide an ideal platform for organizational learning especially through IJVs where partner firms can acquire, learn, share, create new knowledge, and transfer knowledge between them (Inkpen, 2000). Nonetheless, quite often strategic alliances face a tradeoff between the opportunities for generating and sharing knowledge and the propensity that partners may tend to become opportunistic (Child and Faulkner, 1998). Building on the

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concept of inter-partner learning developed by Hamel (1991), RCOL is defined as the recipient firms willingness to establish a mutually beneficial and collaborative relationship which requires the recipient firms honest intention to create common benefits for both the supplier and recipient (Yin and Bao, 2006). Thus, learning in the collaborative relationship greatly depends on the partners intent; whether the recipient partners learning objective (intent) is collaborative (complementary) or competitive (Child and Faulkner, 1998).

A group of studies on inter-firm KT has established that partners intent (collaborative vs. competitive intent) is a key determinant of inter-organizational learning (Beamish and Berdrow, 2003; Hamel, 1991; Simonin, 2004; Inkpen and Beamish, 1997; Baughn et al., 1997; Inkpen, 1998a; Mohr and Sengupta, 2002). Learning intent has always been referred to as 1) an opportunity to learn and the desire and will of an organization to internalize a partners skill and competencies (Hamel, 1991), 2) the desire and will of the partner firm to acquire the other firms knowledge and skills (Tsang, 2001; Story and Mohr, 1997; Inkpen and Beamish, 1997), and 3) the key condition for knowledge creation (Nonaka and Takeuchi, 1995). Past studies have contributed valuable theoretical arguments on partners learning intent (competitive vs. collaborative intent) and its relationship with partners collaborative attitudes in knowledge acquisition (Hamel, 1991; Lindholm, 1997; Child and Faulkner, 1998; Khanna et al., 1998; Inkpen, 1995a; Inkpen, 1998a; Inkpen, 2000). Most of the partners in strategic alliance consider their cooperative relationship as transitional devices; where the primary objective is to learn and subsequently internalize their partners skills and knowledge (Hamel, 1991).

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Lindholm (1997) suggests that learning through IJVs can occur in three different processes: 1) through the IJV partners transferring their knowledge to the JV; where technology, knowledge or management practice are moved into new organizational setting for which such transfer represents a new knowledge input (Child and Faulkner, 1998), 2) through cooperative learning process where partners offer one another valuable complementary knowledge (Child and Faulkner, 1998). This learning process involves the creation of new knowledge or substantial transformation of existing knowledge within the cooperative venture (Lindholm, 1997). Partners in this process constructively integrate different inputs (knowledge) to create mutual learning between them, and 3) through knowledge harvesting; where it involves the retrieval of knowledge which has been generated in the collaborative JV and internalize knowledge back to the parent firms so the newly acquired knowledge can be used in other areas of operation (Lindholm, 1997; Tiemessen et al., 1997).

Khanna et al. (1998) identify two benefits the partners can obtain in strategic alliance through IJV. First, the private benefits, where partner firms can unilaterally acquire through learning from their partners and apply the knowledge to operations in areas which are not related to the alliance activities (Child and Faulkner, 1998). When private benefits which are based on the underlying attitude of competition between partners, become the primary objective in inter-partner learning the alliance relationship is likely undermined by the partners attitude to out-learn each other by optimally exploiting the opportunity to learn from the other partner (Khanna et al., 1998). In the competitive relationship environment, the opportunistic behaviors of one partner will cause the other partner to be more protective of their knowledge and reluctant to share knowledge to avoid risk of knowledge or technology spillovers

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(Inkpen, 2000). Knowledge spillovers may occur when valuable firm knowledge spills out of the firm to the competitor or potential competitor; where the competitor would optimize the acquired knowledge to gain competitive advantage (Cohen and Levinthal, 1990). Thus, a competitive relationship promotes opportunism (Child and Faulkner, 1998).

Second, the common benefits, where in the cooperative learning environment partners jointly establish a mutual opportunity to learn from each other within the scope of the alliance, and apply the knowledge acquired to strengthen the alliances operation. Cooperative or collaborative learning which is based on the underlying spirit of strong collaboration encourages the partners to work together by sharing their knowledge, benefiting each other complementarities, and providing opportunities to extract the potential synergies between their respective competencies (Doz, 1996; Geringer, 1991).

The propensity of learning in an alliance is high if the partners adopt the collaborative learning approach as it creates potentials for mutual learning, knowledge sharing and knowledge acquisition between them (Hamel, 1991; Inkpen, 2000). If learning is considered as a competitive acquisition of knowledge rather than a collaborative learning approach, the alliance/JV becomes destabilized (Beamish and Bedrow, 2003), the partners bargaining power changes (Hamel, 1991; Inkpen, 1998a), the cooperative venture will not be learning oriented (Galister et al., 2003), the mutual trust between partners erodes (Child and Falkner, 1998), the partners may tend to hold back their knowledge as a defensive measure (Pucik, 1991), and the transferring partner becomes cautious, skeptical and tend to monitor and control the flow of the proprietary information (Makhija and Ganesh, 1997).

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Inkpen (1995a) suggests that collaborative learning in an alliance is achievable in two forms 1) through learning from a partner; where collaboration provides access to partners knowledge and skills which can include product and process technology, organizational skills and knowledge about new environments, and 2) through learning with a partner; where this mode creates the accumulation of mutual experience and knowledge about how to manage inter-organizational cooperation (Inkpen, 1995a).

Glaister et al. (2003) categorize learning process in strategic alliance into two different learning concepts 1) learning the other partner's skills (co-operating to learn), and 2) learning from strategic alliance experience (learning to co-operate). Co-operating to learn means using JVs as a medium for organizational and inter-organizational learning; where a partner focuses on learning certain technology or other types of know-how of the other partner. Whereas, learning to co-operate means striving towards a growing understanding of the processes and specific problems involved in IJVs and continuing to develop the practices and competencies in IJV management (Glaister et al., 2003). Learning to co-operate in IJVs includes 1) management of the IJV formation process, 2) management of the boundary relationship between partners, and 3) management of the operation of the IJV (Glaister et al., 2003). Thus, based on Glaister et al.s (2003) categorization, the present study concentrates on the acquisition of the IJVs partners technology/knowledge, skills and competencies (cooperating to learn) through inter-organizational technology/knowledge transfer processes in IJVs which excludes learning how to manage IJVs (learning to co-operate).

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The opportunity to learn or acquire knowledge in strategic alliance depends on the partners ability to interact and exchange knowledge. With no knowledge exchange especially through frequent interactions, there will be fewer chances for knowledge acquisition to occur (Inkpen, 2000). In the collaborative learning where mutual benefit is the primary objective, the transferring partners tend to be more open or transparent in terms of sharing knowledge with the acquiring partner provided that the acquiring partners reciprocate in terms of exchanging valuable knowledge and demonstrate their receptive attitude by appreciating and receiving new knowledge (Tsang et al., 2004). Collaborative learning is closely associated with relationship openness or transparency as it allows both JV partners to have access to each other knowledge and competencies (Inkpen, 2000).

Inkpen (2000) suggests two factors as the determinants of relational openness 1) competitive overlap, and 2) inter-partner trust. When the competitive overlap between JV partners is high, the transferring partners tend to protect their knowledge and are reluctant to share and transfer knowledge for fear of knowledge spillovers. Partner collaborativeness which is reflected in the acquiring partners learning intent (competitive vs. collaborative intent), determines degree of openness or transparency in knowledge sharing and knowledge transfer. The transferring partners would have limited incentive to transfer and share knowledge with partners who demonstrate competitive learning intent and may actively seeks to prevent knowledge leakage (Inkpen, 1998a, 2000). Thus, a higher degree of recipient collaborativeness displayed by the recipient partners learning intent would increase interpartner trust and commitment between partners in the collaborative relationship (von Krogh

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et al., 2000). As the inter-partner trust increases, the transferring partners degree of openness or transparency will also eventually increase (Inkpen, 2000).

A review of the literature shows that very little empirical evidence is available with respect to the relationship between recipient collaborativeness and TTDEG. In a case study of nine international alliances, Hamel (1991) find empirical evidence that partners intent is a key determinant of inter-organizational learning in alliance. Perhaps, the only empirical evidence is provided by Yin and Boa (2006). In their study on the acquisition of tacit knowledge in China through IJVs, three aspects of recipient factors have been examined: RCOL, method comprehensiveness and recipient readiness. The result shows that among the recipient factors, RCOL is the most significant factor that has a positive impact on tacit knowledge acquisition. Since learning in an alliance greatly depends on partners intent, Simonin (2004) find learning intent consistently emerge as the significant determinant of KT.

2.9 Relationships between Technology Supplier Characteristics (TSCHAR) and Degree of Technology Transfer (TTDEG) The technology supplier characteristic (TSCHAR) is the third group of TT characteristic in this study. A review of literature shows that, as shown in section 2.6.3, TSCHAR have been studied from many dimensions of suppliers behaviors. Previous studies on the suppliers behaviors which are mostly theoretical and case-based, suggest different conclusions on the suppliers behaviors because there has been no consensus on the appropriate definition and measure of the concept (Minbaeva, 2007). As a source of knowledge, the technology supplier

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must be knowledgeable to form a knowledge gap between the transferor and the transferee; where they are being perceived as reliable or valuable sources of knowledge (Szulanski, 1996), and must be willing to support and co-operate with the local partner in transferring technological knowledge (Simonin, 1999a). This study focuses on two critical behavioral characteristics namely PPROTEC and TRANSCAP as the vital technology supplier characteristics that affect degree of technology transfer.

2.9.1 Partner Protectiveness (PPROTEC) and Degree of Technology Transfer (TTDEG) The ability of a firm to acquire knowledge in the cooperative arrangement such as joint venture does not solely depend on its internal ACAP. The inter-firm learning opportunity provided by strategic alliance is also subjected to the degree of willingness of the technology supplier to cooperate or engage in knowledge sharing i.e. by reducing the level of protectiveness (Simonin, 1999a; Steensma and Lyles, 2000). One of the critical elements of technology supplier characteristic is PPROTEC, which is beyond the technology recipients control.

PPROTEC refers to the extent of protections/hurdles, intentionally or unintentionally, imposed by the foreign partners on local partners in IJVs which restrict the accessibility to proprietary technology/knowledge (Hau and Evangelista, 2007). PPROTEC is significantly related to degree of transparency. Transparency is thus defined as the degree of openness of one partner (technology supplier) and their willingness to transfer knowledge to the other partner (technology recipient) (Hamel, 1991). In the context of intra-firm, openness is referred to as the degree to which relationship between business unit managers and

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corporate supervisors is open and informal which promotes spontaneous and open exchange of information and ideas (Gupta, 1987).

Many theoretical studies have indicated that partners in the collaborative relationships such as JV are expected to mutually exchange their valuable proprietary assets, resources, information, knowledge and technology between them to achieve mutual benefits (Inkpen, 2000; Khanna et al., 1998; Child and Faulkner, 1998). These proprietary competencies are the sources of sustainable competitive advantage of the supplier partners and for fear of losing ownership, a position of privilege and superiority of their valuable assets, they are most likely to protect their hard-won success and competencies from the opportunist recipient partners (Parkhe, 1993; Steensma and Lyles, 2000; Szulanski, 1996). Unless they have sufficient incentive to mitigate the cost, which is typically associated with the transfer, the foreign parent firms (supplier partners) may intentionally restrict knowledge flow to the JV. This is because cooperation through JVs is commonly viewed as a low cost approach for local firms to gain competencies (Hamel et al., 1989; Simonin, 1999a, 2004; Steensma and Lyles, 2000; Dyer and Singh, 1998).

Due to the risk of knowledge spillovers (leakage), partners in the strategic alliance tend to be more protective of their valuable knowledge resources as their competitiveness depends very much on these strategic valuable resources (Barney, 1991). Valuable knowledge resources of the firm, if not well protected will leak to potential competitors or competitors which eventually will enable competitors to gain competitive advantage and subsequently

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use it against the proprietor or supplier firms (Cohen and Levinthal, 1990; Hamel et al., 1989; Simonin, 1999a, 2004; Steensma and Lyles, 2000).

Knowledge spillover to an alliance partner tends to shift the balance of bargaining power between partners which could lead to the initiation of changes in the partner relationship (Inkpen, 2000). Due to asymmetries of knowledge between the alliance partners, PPROTEC and knowledge accessibility will be correspondingly asymmetrical in which partners in an alliance can be less transparent or open than the other partner (Hamel, 1991). However, even though openness (transparency) of the alliances partner, to some extent, is a prerequisite for carrying out joint tasks in an alliance, there is a great concern by the managers about the unintended and unanticipated transfer of knowledge where knowledge is unintentionally transferred by default rather than by design (Hamel, 1991).

Inkpen (2000) describes relationship openness as the willingness and ability of JV partners to share information and communicate openly. Openness between partners in the relationship such as alliances or JVs is a key element in determining the amount of information/knowledge shared (Inkpen, 2000). Past researchers are in agreement that the extent of willingness of the partners to share and transfer knowledge is reflected in their degree of protection of knowledge accessibility and transparency (Inkpen, 2000; Hamel, 1991).

Hamel (1991) outlines four determinants of transparency (openness) which include 1) the penetrability of the social context surrounding the partner which relates to the question on

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how easy or difficult for the partners employees to assimilate themselves into different culture of the other partner, 2) the attitude towards outsiders; which refers to the difference in degree of openness based on the cultural and organizational backgrounds of the alliance partners. For example, western cultures and organizational context are more open to facilitate the employees assimilation as compared to the Japaneses Oriental cultures and organizational context which are clannish, 3) the extent to which the partners distinctive skills are encodable where explicit knowledge is more encodable than tacit knowledge, and 4) the partners relative pace of innovation/skills-building, which refers to the difference in speed of innovation of one partner and the other partners pace of absorption. Hamel (1991) suggests that the level of transparency is low when the transferring partner innovations speed is much faster than the learning partners absorption pace. Partners can be very open in terms of knowledge accessibility but remain less transparent in terms of its rapid pace of product development (Hamel, 1991).

Therefore, in the context of knowledge sharing within an alliance where a high-competitive overlap between partners exists, the knowledge protectiveness level is expected to be high (Inkpen, 1998a; Inkpen, 2000; Yan and Luo, 2001) due to the foreign partners lack of motivation to share and transfer knowledge (Szulanski, 1996; Hua and Evangelista, 2007). Although alliances provide a strategic avenue to internalize the foreign partners technologies and competencies, however, they are also likely to be surrounded by greater levels of protectiveness and mistrust which may discourage the transfer of tacit knowledge especially when learning in alliances demands active teaching by the technology supplier (Simonin, 2004, 1999a; Dhanaraj et al., 2004; Marcotte and Niosi, 2000).

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In protecting their knowledge and competencies, the foreign partners may adopt 1) explicit measures, 2) deploy shielding mechanisms, or 3) engage in defensive actions when the embodied knowledge is explicit and held by only few experts (Simonin, 1999b, 2004; Hamel, 1991; Inkpen and Beamish, 1997). The transparency or permeability of the organizational membrane between partners is protected through active means such as the adoption of strict policies or development of shielding mechanisms to wall off the proprietary technology through astute partitioning of tasks and physical separation of experts (Doz et al., 1986; Baughn et al., 1997). To protect their competencies, the alliance partners may also employ few active (explicit) measures against the ambitious partner through 1) gate-keeping strategy; where alliance employees are assigned to monitor knowledge flows, filter information access and disclosure across the collaborative membrane, and limit the number of staff from each partner seconded to the other, 2) restricting the collaborative agreement to a narrow range of products and markets such as designing components or sourcing products from multiple places, 3) restricting (control) access to plant, or locating the joint company in a third location, and 4) controlling the information at management and operating levels (Hamel, 1991).

However, several studies are in consensus that active (explicit) measures and procedures are likely to 1) create a negative impact on the perception of trust and openness (Hamel, 1991; Simonin, 1999a), and 2) become the main hindrance to openness or transparency; which escalate suspicion of opportunistic behavior of the other partner (Kale et al., 2000) particularly when a partner is perceived as provocative, undermining trust or acting in bad faith (Hamel, 1991). Thus, PPROTEC has not only had a disruptive impact on the alliances

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operation but it also contributes to the escalation of cross-cultural and other conflicts between alliance partners which eventually affects KT (Lyles and Salk, 1996).

As discussed above, studies on PPROTEC are mostly theoretical or case-based. Only few studies have empirically examined the impact of PPROTEC on technology and knowledge transfer. The empirical results are found to be inconsistent 1) in the context of marketing know-how transfer in strategic alliance, partner PPROTEC has insignificant relationship with knowledge ambiguity (Simonin, 1999b), 2) PPROTEC indirectly, through the mediation of knowledge ambiguity, is insignificantly related to inter-firm KT in strategic alliance (Simonin, 1999a), 3) PPROTEC has a significant negative effect on inter-firm KT in strategic alliance (Simonin, 2004), and 4) partners knowledge protectiveness has a significant negative influence on explicit and tacit marketing knowledge acquisition (Hua and Evangelista, 2007).

2.9.2 Transfer Capacity (TRANSCAP) and Degree of Technology Transfer (TTDEG) Since technology and knowledge transfer involve the absorption and transmission of knowledge (Devanport and Prusak, 1998, 2000), the ability of the technology supplier to efficiently transfer knowledge and technology to recipient becomes critical in inter-firm TT. Few studies have suggested that while firms differ in their ability in knowledge creation, they also differ in their ability to transfer knowledge within and outside of the organizational boundary (Kogut and Zander, 1992, 1993; Szulanski, 1996). The efficiency in transmitting technology or knowledge by the supplier is important in both intra and inter-firm knowledge transfer as it affects the TT outcomes. The supplier firms ability to transfer knowledge to

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their subsidiaries efficiently and effectively can achieve several objectives such as 1) to facilitate their expansion in foreign countries, 2) to maintain the firms competitiveness, and 3) to safeguard their competencies from the competitors (Martin and Solomon, 2003).

In the context of strategic alliance, the supplier firms ability to transfer knowledge facilitates the organizational learning process and simultaneously justifies their commitments in the collaborative relationship when all partners are expected to mutually contribute their knowledge, technologies, skills and competencies to the JVs in order to gain mutual benefits (Inkpen, 1998a, Inkpen 2000; Khanna et al., 1998; Child and Faulkner, 1998). Past studies have described/operationalized TRANSCAP from many dimensions, for example: 1) the supplier firms ability to articulate potential uses of their own knowledge, assess the needs and capabilities of the potential recipient, and transfer knowledge to different location (Martin and Solomon, 2003), 2) a disseminative capacity of knowledge sender in terms of the sources ability and willingness to share knowledge (Minbaeva and Minhailova, 2004), 3) the senders ability to articulate and communicate knowledge to the recipient (Minbaeva, 2007), 4) the parent firms capacity to knowledge transfer (Wang et al., 2004), and 5) the sources motivational disposition (Gupta and Govindarajan, 2000).

In their conceptualization of TRANSCAPs concept, Martin and Solomon (2003) argue that the source firms ability to transfer knowledge within MNCs consist of three interrelated elements 1) the firms ability to identify potential uses of its knowledge, where knowledge can be effectively used, in which firms do not only articulate knowledge but must also be able to describe its potential uses and conditions as to what it can achieve, 2) the source

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firms ability to assess the recipient firms readiness in absorbing knowledge and their ability to evaluate the recipient firms capacity to assimilate and use knowledge, and 3) the source firms ability as a proficient transferor (Martin and Solomon, 2003).

Szulanski (1996) identifies source (supplier) not perceived as reliable and lack of motivation as the sources characteristics that contribute to knowledge stickiness. When the source is perceived as unreliable, it is not seen as trustworthy and knowledgeable. Moreover, due to the sources lack of motivation; which can undermine the KT process, the source may be reluctant to share its proprietary knowledge with the recipient thus unwilling to devote sufficient time and resources to support the transfer due to fear of losing ownership, privilege or superiority (Szulanski, 1996). Dhanaraj et al., (2004) argue that as tacit knowledge is abstract, which can only be communicated/transferred through active involvement of the teacher (source), transferring tacit knowledge therefore demands 1) a significant amount of teaching (Marcotte and Niossi, 2000; Winter, 1987), and 2) the foreign partners highest level of commitment and seriousness (Berdrow and Lane, 2002).

The decision to transfer knowledge is largely individual and driven by the ability and willingness of the sender to share knowledge (Minbaeva, 2007; Kogut and Zander, 1992, 1993; Szulanski, 1996). Minbaeva (2007) argues that knowledge sender (source) should possess well-develop abilities to articulate and communicate knowledge to the recipient. However, although the knowledge sender is capable of transmitting knowledge, they may be unwilling to share knowledge (Minbaeva, 2007). Wang et al. (2004) identify parent firms capacity; which include the ability to impart knowledge in a form that can be assimilated by

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the recipient, as an important determinant of knowledge transfer by MNC parent to its subsidiary.

In the context of inter-firm KT, the strategic alliance and JV literatures have implicitly associated the technology suppliers TRANSCAP with 1) the parents firm assistance (Lyles et al., 1999; Hau and Evangalista, 2007), 2) the foreign parents active involvement (Lyles and Salk, 1996; Cumming and Teng, 2003), and 3) the foreign parents commitment (Tsang et al., 2004). For IJVs to succeed, the foreign firm is expected to assist the local partner firms by providing adequate and sufficient assistance to the IJV management in terms of transferring a significant amount of knowledge to local personnel through training programs or interactions/contacts between local and foreign employees (Hau and Evangalista, 2007). Simonin (1999b) argues that the degree to which a foreign partner has explicit contribution in terms of training of the local personnel should be positively associated with the degree to which an IJV acquires explicit knowledge from its foreign parent.

Although the foreign partners commitment is explicitly reflected in their investment of resources, specifically in terms of physical assets and organizational knowledge, such resources must also include commitment to human resources in terms of quantity and quality of expatriate assigned to JV and the training/support programs of local employees (Hau and Evangalista, 2007; Tsang et al., 2004). The foreign partners active involvement by providing training and support to local employees is acknowledged as a mechanism to transfer explicit knowledge (informational content) and tacit knowledge (socially embedded information) (Lyles and Salk, 1996). Cumming and Teng (2003) suggest that the greater the foreign

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partners involvement in KT through various form of activities the higher the propensity for the recipient to internalize their partners knowledge. A review of the literature shows that past studies are mostly theoretical (Minbaeva, 2007). Only few studies have empirically examined the relationship between TRANSCAP and KT focusing on intra-firm transfer (Szulanski, 1996; Gupta and Govindarajan, 2000; Minbaeva 2007).

In the context of strategic alliance and JV literature, no studies have directly examined the relationship between the suppliers TRANSCAP and TTDEG. Nevertheless, as TRANSCAP has been closely associated with the foreign firms active involvement, assistance and commitment, few empirical studies have offered evidence that 1) partner assistance has a significant positive impact on the acquisition of explicit marketing knowledge (Hau and Evangalista, 2007), 2) the degree of active involvement of the foreign parent is significantly related to knowledge acquisition (Lyles and Salk, 1996), and 3) the foreign parents commitment has a significant positive effect on knowledge acquisition (Tsang et al., 2004).

2.10 Relationships between Relationship Characteristics (RCHAR) and Degree of Technology Transfer (TTDEG) As indicated in section 2.6.4, a stream of literatures on intra and inter-firm KT has identified many aspects of RCHAR. In this study the RCHAR form the fourth group of TT characteristic. The present study reviews two important dimensions of RCHAR: relationship quality (RELQLTY) and mutual trust (MT) and their relationship with TTDEG. RELQLTY and MT are expected to have a positive impact on TTDEG.

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2.10.1 Relationship Quality (RELQLTY) and Degree of Technology Transfer (TTDEG) In order to facilitate inter-firm TT and organizational learning, both technology supplier and recipient are expected to establish a close relationship between them. For partner firms who have differences in terms of organizational structures, cultural backgrounds, experiences, capabilities, learning intent and technological resources, transferring technology between partners is rather a challenging process (Argote, 1999; Hamel, 1991). As knowledge is firmspecific, embedded in firm organizational context, personal in nature and idiosyncrasy of the knowledge source (Nonaka, 1994; Kogut and Zander, 1992, 1993), acquiring and transferring technology require frequent and effective interactions between the supplier and recipient (Bresman et al., 1999).

A review of the literature on both intra and inter-firm KT, reveals that RELQLTY has been extensively operationalized from many dimensions, for example 1) ease of communication and intimacy of relationship between the source and recipient unit (Szulanski, 1996), 2) existence and richness of transmission channels within MNCs (Gupta and Govindarajan, 2000), 3) degree of interaction frequency between the sender and receiver (Lin, 2005), 4) openness of communication, spontaneous, and open exchange of information and ideas between the interacting parties (Gupta, 1987), 5) numerous individual exchanges (Szulanski, 1996; Nonaka, 1994), 6) frequency, adequacy, amiability and constructiveness in interaction (Lin, 2005), 7) productive interaction/relationship (Wang et al., 2004; Inkpen, 1998a), 8) extensive and effective inter-personal communication (Bresman et al., 1999), 9) meaningful and timely information (Anderson and Narus, 1990), 10) close and intense interaction between individual members of the alliance partners (von Hippel, 1988; Marsden, 1990), 11)

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personal attachment between partners (Luo, 2001), and 12) extensive communication between JV partners (Inkpen, 2000).

The importance of numerous individual exchanges in facilitating tacit knowledge transfer within organization is achievable through ease of communication and intimacy of relationship between the source and recipient units; and therefore a problematic relationship will only lead to hardships in transferring knowledge (Szulanski, 1996). Gupta and Govindarajan (2000) argue that the existence and richness of transmission channels as an important determinant of knowledge flows within MNCs. The richness of communication links is captured or operationalized as informality, openness and density of communications. These constructs are closely related to relationship quality as they 1) indicate higher degree of involvement and interaction frequency between the sender and receiver, 2) increase the openness of communication, spontaneous and open exchange of information and ideas between the interacting parties, and 3) create potential for numerous individual exchanges (Szulanski, 1996; Nonaka, 1994; Lin, 2005; Gupta, 1987). Wang et al. (2004) suggest that effective transfer of managerial knowledge by MNCs to Chinese subsidiaries does not only depend on adequate presence of expatriates but also productive interaction between these expatriates and their Chinese counterpart.

From the inter-firm KT context, Lin (2005) categorizes quality interaction in terms of its frequency, adequacy, amiability and constructiveness. Frequency of interaction refers to the number of interactions that occur during the inter-organizational learning process which takes place between the supplier and recipient personnel (Szulanski, 1996). Adequate

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interaction describes the interaction value, meaningful exchanges and sufficient opportunities to understand each other seriously (Mohr and Nevin, 1990). Amiable refers to the climate of the relationship and degree of understanding between supplier and recipient. Finally, interactions between partners must be implemented in a constructive and collaborative manner so as to avoid unintended conflicts (Lin, 2005).

Bresman et al. (1999) argue that communication involves two distinct but overlapping stages 1) the post integration process which depends on an effective, extensive and intensive communication between the acquirer and acquired units, and 2) the tacit knowledge transfer process which requires intensive communication and frequent interaction between the transmitting and receiving parties.

Strategic alliance literature has explicitly indicated that RELQLTY or quality of interaction between alliance partners promotes greater opportunity to learn, share and access to the alliance partners strategic knowledge and competencies. RELQLTY creates higher relationship openness which can directly affect the willingness and ability of alliance partners to share more information and communicate openly (Inkpen, 1998a, 2000). The inter-partner RELQLTY is also reflected in the formal and informal sharing of meaningful and timely information (Anderson and Narus, 1990). Relationship openness between collaborative partners is acknowledged as 1) a key factor in determining the amount of information shared, degree of accessibility of alliance knowledge and the success of knowledge acquisition by alliance partner (Inkpen, 2000), and 2) an essential element in the learning process which suggests that more resources are likely to be invested in learning by the parent firms who

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regard their alliance relationship as open (Hamel, 1991). Thus, a close and intense interaction between alliance partners act as an effective mechanism to acquire, share, transfer or learn tacit and explicit knowledge across the organizational interface (von Hippel, 1988; Marsden, 1990; Kale et al., 2000).

Surprisingly, although the previous researchers have extensively highlighted and debated RELQLTY and its importance effect on knowledge acquisition (Yin and Bao, 2006, pg 344), however, empirical studies that examined the relationship between RELQLTY and knowledge transfer are found to be very limited as most of them are theoretical. Many intrafirm studies have offered evidence that RELQLTY provides a positive impact on KT (Szulanski, 1996; Minbaeva, 2007; Hansen, 1999, 2002; Gupta and Govindarajan, 2000).

Nonetheless, few empirical studies have found that 1) RELQLTY has a significant positive impact on managerial knowledge acquisition (Lin, 2005), and 2) an effective inter-personal communication between supplier and recipient through visits and meetings has significantly facilitated cross border KT through acquisition of new firms (Bresman et al., 1999). As opposed to quality interaction, the JV literature has established that conflicts in general may lead to JVs instability and poor JV performance (Killing, 1983; Lane and Beamish, 1990) thus minimizing the flow of information and knowledge (Fiol and Lyles, 1985; Lane and Beamish, 1990; Parkhe, 1993).

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2.10.2 Mutual Trust (MT) and Degree of Technology Transfer (TTDEG) Inter-partner mutual trust (MT) is critical in the collaborative relationship as trust 1) develops a sense of openness and shared understanding between partners (Dyer and Nobeoka, 2000), 2) facilitates greater accessibility to the alliance knowledge and knowledge acquisition (Inkpen, 1998a, 2000), 3) creates opportunities for a mutual inter-organizational learning, when partners become more open and committed in sharing their knowledge and competencies (Inkpen and Dinur, 1998; Inkpen and Beamish, 1997), 4) reduces the partners protectiveness of their knowledge and promotes free exchange of information between partners (Inkpen, 2000), 5) creates higher propensity of inter-partner learning as knowledge is more accessible due to free exchange of information (Hamel, 1991; Doz, and Hamel, 1998; Inkpen, 2000), 6) reduces the fear of opportunistic behaviors of the learning partner and promotes greater transparency between the exchange processes (Gulati, 1995), 7) promotes knowledge acquisition (Glaister et al., 2003; Inkpen and Tsang, 2005), and 8) fosters norms of reciprocity (Nahapiet and Ghoshal, 1998).

A review of the literature reveals that inter-partner MT has been discussed from few dimensions 1) as the ongoing social control mechanism and risk reduction device (Lane et al., 2001), 2) as the mutual problem-solving mechanism (Uzzi, 1997), and 3) as the implementation and continuous evolution phases of alliance development (Nielsen, 2007). Based on the extensive literatures, the concept of trust has many operational definitions, among others, trust is defined as 1) the perceived likelihood of the other not behaving in a self-interest manner (Madhok, 1995), 2) the willingness of a party to be vulnerable to actions of another party based on the expectation that the other will perform a particular action

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important to the trustor, irrespective of the ability to monitor or control that other party (Mayer et al., 1995), 3) the decision to rely on another JV party under the condition of risk (Inkpen and Currall, 2004), 4) a state involving confident positive expectations about anothers motives with respect to oneself in situations entailing risk (Boon and Holmes, 1991; Lewicki and Bunker, 1995; Das and Teng, 1998), 5) the expectation that the promise of another can be relied on and that, in unforeseen circumstances, the other will act in a spirit of cooperation with the trustor (Hagen and Choe, 1998), and 6) a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another (Rousseau et al., 1998).

Generally, strategic alliance studies have described trust as 1) the partners perception or belief that the other alliance or JV partner would not take advantage on the collaborative relationship and the belief that partners will honor their promises by fulfilling their commitments and obligations in the collaborative relationship (Inkpen, 2000), 2) a type of expectation that alleviates the fear that ones exchange partner will act opportunistically (Bradach and Eccles, 1989), and 3) the belief that an exchange partner would not act in selfinterest at another partners expense (Uzzi, 1997).

Trust between exchange partners consists of two critical components: structural and behavioral components. Structural component is developed through a mutual hostage environment; whereas behavioral component refers to the degree of confidence that the partners have on the other partner in terms of their reliability and integrity (Madhok, 1995). Gulati (1995) categorizes trust as knowledge-based trust and deterrence-based trust.

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Knowledge-based trust is created when the two partners firms interact with each other and learn about each other to develop trust around their norms of equity. Based on utilitarian consideration, deterrence-based trust will lead a firm to believe that a partner will not act opportunistically owing to the costly sanctions that are likely to arise. MT reduces the fear of opportunistic behaviors of the learning partner, promotes greater transparency between the exchange processes (Gulati, 1995) and may mitigate partner protectiveness (Inkpen, 1998a). The partners openness (transparency) which determines the willingness to exchange, share and transfer knowledge between alliance partners is frequently hindered by a mutual suspicion of opportunistic behaviors between them (Kale et al., 2000). In the cooperative ventures such as IJVs mutual trust which emerges from the existence of personal attachment between partners, contributes to a higher degree of willingness to transfer knowledge between alliance partners (Luo, 2001).

High degree of MT indicates that the partners in a collaborative relationship 1) accept each other as an ally not as competitor (Powell et al., 1996), 2) signify their commitment not to take advantage of the other partners weaknesses and or vulnerabilities (Steensma and Lyles, 2000), and 3) are more willing to provide information to knowledge learning and sharing; particularly when partners are less suspicious of the other partners opportunistic behaviors (Child and Faulkner, 1998). Trust allows potential access to the alliance valuable resources and a willingness to solve problems through mutual problem-solving (Uzzi, 1997).

A collaborative alliance with low degree of trust will reduce the partners openness (transparency) in knowledge sharing and learning thus limiting the informations accuracy,

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comprehensiveness and timeliness (Zand, 1972; Kale et al., 2000) as the partners are unwilling to face the risk associated with sharing more valuable information (Hedlund, 1994). A lack of inter-partner trust may generate inter-firm conflicts, increase partners opportunistic behaviors and eventually erode mutual understanding (Tsang et al., 2004). The inter-partner trust acts as an ongoing social control mechanism and risk reduction device as it determines the extent of knowledge exchange in IJVs and the efficiency with which it is exchanged (Lane et al., 2001). Trust is also crucial in alliances and JVs as no contracts/agreements can cover all the variations and conditions that can occur (Dhanaraj et al., 2004).

Inter-partner trust is also viewed as both the implementation and continuous evolution phases of alliance development since they are overlapping and inseparable (Nielsen, 2007). As a JV matures overtime, MT intensifies thus developing greater attachment among partners especially when partners become familiar with each others idiosyncrasies (Meschi, 1997; Nielsen, 2007). Trust between partners may help to develop mutual partner understanding, increase knowledge accessibility (Inkpen, 1998a) and contribute to a freer and greater exchange of information and know-how between alliance partners (Kale et al., 2000).

Past studies on MT are mainly theoretical (Nielsen, 2007). Nevertheless, few empirical studies suggest that MT between alliance partners is an important determinant in the alliance performance in terms of 1) reducing search cost, increasing efficiency, enhancing benefits and alliances performance (Gulati, 1995), 2) increasing alliances cooperation, improving flexibility, reducing coordinating activities cost and increasing KT and learning (Smith et al.,

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1995) and, 3) reducing negotiating costs in alliances and enhancing alliance performance (Zaheer et al., 1998).

Few strategic alliance studies on JVs have also offered empirical evidence where in general MT has significant positive relationships with 1) the alliance performance (Nielsen, 2007), 2) learning in strategic alliance (Kale et al., 2000), 3) international cooperative ventures (ICVs) performance (Luo, 2001), and 4) tacit knowledge transfer in IJVs (Dhanaraj et al., 2004). On the other hand, Pak and Parks (2004) findings suggest that inter-firm conflicts between partners will erode MT when the transferring partners tend to be more protective of their knowledge and unwilling to share knowledge due to suspicion of the other partners opportunistic behaviors.

2.11 Degree of Technology Transfer (TTDEG) The technology, knowledge transfer and strategic alliance literature have extensively examined the links (relationships) between 1) knowledge attributes, source and recipient and KT success (Cummings et al., 2003), 2) knowledge seekers, knowledge holder and contextual factors and know-how acquisition (Hau and Evangelista, 2007), 3) IJVs characteristics and knowledge acquisition (Lyles and Salk, 1996), 4) knowledge actors interaction and KT (Bresman et al., 1999), 5) organization motivation, learning capacity, learning hindrance and KT (Simonin, 2004), 6) absorptive capacity and knowledge learned from foreign firm (Lane et al., 2001), 7) the IJV characteristics and knowledge acquisition (Tsang et al., 2004), 8) knowledge antecedents, ambiguity and knowledge transfer (Simonin,

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1999a), 9) learning intent, management control and managerial knowledge acquisition (Lin, 2005), 10) relational embeddedness and tacit/explicit knowledge acquisition (Dhanaraj et al., 2004) , 11) overseeing effort, management involvement and knowledge acquisition (Tsang et al., 2002), 12) the supplier and recipient factors and tacit knowledge acquisition (Yin and Bao, 2006), and 13) relation-specific determinants, knowledge specific determinants and degree of knowledge transfer (Pak and Park, 2004).

However, in general majority of these studies have focused more on knowledge transfer and knowledge acquisition per se as the outcomes (dependant variables). Therefore as a result, except for Pak and Park (2004), not many studies have empirically examined the effects of knowledge attributes/antecedents, actors, facilitators/barriers, or TT processes on degree of technology transfer. The TTDEG as an outcome (dependent variable) is indeed crucial as it reflects 1) the extent of technology/knowledge that has been successfully or unsuccessfully transferred or acquired, and 2) the types of technology transferred (tacit or explicit) to the recipient. Previous literatures on TT have acknowledged that a substantial transfer of technology will positively 1) lead to a higher potential of innovation performance/capabilities (Guan et al., 2006; Kotabe et al., 2007)), 2) increase in technological capabilities (Kumar et al., 1999; Madanmohan et al., 2004; Mowery et al., 1996), 3) enhance the organizations competitive advantage (Liao and Hu, 2007; Rodriguez and Rodriguez, 2005), 4) enhance the organizational learning effectiveness (Inkpen, 2000; Inkpen and Dinur, 1998), 5) affect productivity (Caves, 1974; Xu, 2000; Liu and Wang, 2003), 6) increase the technological development of local industry (Markusen and Venables, 1999), and 7) improve the economic growth of the host country (Blomstrom, 1990). Thus, as the question is no longer whether or

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not the MNCs are transferring technology to local firms, the recent focus in the literature has shifted to questions on 1) the level (sophistication) of technology being transferred, and 2) the stage where the transfer process has reached (Lai and Narayanan, 1997; Narayanan and Lai, 2000).

Although the previous researchers have not specifically dealt with TTDEG as the outcome (dependent variable), however, a number of studies have implicitly operationalized degree/level (amount) of technology transferred to the recipient firm in terms of the extent of type of technology/knowledge that are transferred or acquired for example 1) the tacit and explicit marketing knowledge (Hau and Evangalista, 2007), 2) the tacit and explicit knowledge (Dhanaraj et al., 2004; Yin and Bao, 2006), 3) the marketing know-how (Simonin, 1999b; Wong et al., 2002), 4) the technology in service industries (Grosse, 1996), 5) the knowledge on product development and foreign cultures (Lyles and Salk, 1996), 7) the technological learning (Lin, 2007), 8) the managerial knowledge (Si and Bruton, 1999; Tsang 2001; Luo and Peng, 1999; Liu and Vince, 1999; Lin, 2005), 9) the managerial skills (Wong et al., 2002), 10) the technology or manufacturing know how (Lam, 1997; Bresman et al., 1999), 11) the business environment and product market knowledge (Geppert and Clark, 2003), and 12) the research and development (Cummings and Teng, 2003; Minbaeva, 2007). In the context of inter-firm technological KT in IJVs, only Pak and Park (2004) have specifically dealt with degree of knowledge transfer as the outcome (dependent variable) with respect to the transfer of new product development and manufacturing skills/techniques.

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2.12 Relationships between Degree of Technology Transfer (TTDEG) and Local Firm Performance (LFP) A review of the literature reveals that most of the empirical studies on inter-firm technology and knowledge transfer in strategic alliance, particularly IJVs, are limiting their focus on the performance of the IJVs (Lyles and Salk, 1996; Lane et al., 2001; Tsang et al., 2004; Dhanaraj et al., 2004; Steensma and Lyles, 2000). In the context of intra-firm knowledge transfer many studies have concentrated on the performance of the MNCs subsidiary in the host countries (Chen, 1996; Chung, 2001; Ofer & Potterovich, 2000, Cui et al., 2006; Lin, 2003). Studies that examine the impact of technology transfer on local firms performance have been found to be very limited. Following Yin and Boa (2006), this study examines the impact of degree of technology transfer on the recipient/local firms performance. Nevertheless, previous intra and inter-firm studies on knowledge transfer have contributed valuable and well accepted constructs and measurements which are deemed to be applicable as a basis in measuring the relationship between degree of technology transfer and local firms performance.

Most of the studies on IJVs in strategic alliance have recorded positive impact of knowledge acquisition and transfer on IJVs performance. Lyles and Salk, 1996 in their study on interfirm knowledge acquisition from foreign parent in Hungarian IJVs, operationalize IJVs performance in terms of business, human resource and general performance. The study finds that knowledge acquisition has a positive impact on IJVs human resource, general and business performance. The findings suggest that knowledge acquisition is a better predictor of human-resource related performance as compared to general and business performance.

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Lane et al. (2001) examine the effect of inter-firm knowledge acquisition on IJVs performance. Their study measure IJVs performance in terms of business volume, market share, planned goals, and profit. The study finds knowledge acquisition from parent firms has a significant positive effect on IJVs performance. In the context of Vietnamese IJVs, Tsang et al. (2004) examine the effect of knowledge acquisition on IJVs performance by including marketings measurements. They measure IJVs performance in terms of operational cost, operational efficiency, employee productivity, business volume, market share, market penetration, product quality, customer service, and customer satisfaction. The study finds knowledge acquisition has a significant positive effect on IJVs performance. Building on Lyles and Salk (1996) and Lane et al. (2001), Dhanaraj et al. (2004) measure IJVs performance by using a three-item scale of the Hungarian parent, foreign parent, and the IJV general managers evaluation on IJVs performance. They adopt measurements previously used by Lyles and Salk (1996) and Lane et al. (2001) together with average IJVs sales measurements. The result finds tacit and explicit knowledge acquisition have a positive impact on IJVs performance.

The intra-firm technology transfer studies have also recorded a positive impact of technology transfer on MNCs subsidiary performance. Cui et al. (2006) investigate the direct effect of technology transfer on performance of MNCs subsidiaries operating in Croatia. Their study measure MNCs subsidiaries performance in terms of the different of the subsidiaries current and previous years performance and whether the subsidiaries outperform their competitors in the previous year. They find a significant positive relationship between technology transfer and performance of MNCs subsidiaries. Nonetheless, there are limited

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empirical studies which examine the effect of technology transfer on the recipient and/or local firms performance. Yin and Bao (2006) examine the effect of tacit knowledge acquisition on the recipient firms performance in Chinese IJVs. Following Lyles and Salk (1996) and Tsang et al. (2004), the study measures local firms performance in terms of three performance indicators: productivity, revenue and market share. They find tacit knowledge acquisition has significantly affected recipient firms performance.

2.13 Moderating Variables This study also examines the variations of TTDEG by testing the effects of moderating variables of size of MNCs (MNC SIZE), age of JV (JVAGE), MNCs country of origin (MNCCOO) and MNCs types of industry (MNCIND) in the relationship between TTCHARS and TTDEG. These moderating variables are predicted to have strong contingent effects which can moderate the TTCHARS-TTDEG relationship (Sekaran, 2003).

2.13.1 Size of MNC (MNCSIZE) Past studies have acknowledged the significant effect of size of MNC (MNCSIZE) on both intra and inter-firm knowledge transfer; which is largely due to asymmetries in the availability of the firms resources (Kogut and Zander, 1992, 1993; Simonin, 1997, 1999a, 2004; Bresman et al., 1999; Minbaeva et al., 2003). Large firms/MNCs are likely to transfer more (higher) technology and knowledge as compared to small firms, because of the availability of high number of resources and expertise. Hagedoorn and Schakenraad (1994) find a strong positive effect of MNCSIZE on the intensity of strategic partnering and

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technological cooperation because large firms possess organizational and monitoring supports to form an alliance.

substantial administrative,

Generally, small firms do not have adequate resources and are likely to transfer knowledge and technology and knowledge through arms length licensing agreements (Stobaugh, 1988). MNCSIZE affects the propensity of firms to develop competitive advantage and achieve the above-average performance (Porter, 1980). The strategy literature also view MNCSIZE 1) as the important contingency variable with respect to governance, levels of diversification and resistance to organizational change (Hoskisson et al., 1994), 2) influences intra-firm knowledge transfer, and 3) as an impediment to organizational learning (Marquardt and Reynolds, 1994). In the context of strategic alliance, MNCSIZE has been argued as 1) a determinant of alliance participation, intensity of strategic partnering and technological cooperation (Berg et al., 1982; Hagedoorn and Schkenraad, 1994), 2) a differentiating factor in the motives for alliance formation (Glaister and Buckley, 1996), and 3) a source of asymmetric bargaining power between partners in the alliance relationship (Khanna et al., 1998). Few empirical studies on KT in strategic alliance have found that MNCSIZE, as a moderating variable, has significant effects in the relationships between 1) experience, knowhow and collaborative benefits (Simonin, 1997), 2) tacitness of knowledge and knowledge ambiguity (Simonin, 1999a), and 3) learning intent, learning capacity, knowledge ambiguity and KT (Simonin, 2004). However, few studies find MNC SIZE is insignificant as a moderating variable in the relationships between 1) knowledge acquisition and performance (Tsang et al., 2004), 2) absorptive capacity, learning and IJVs performance (Lane et al., 2001), 3) relational embeddedness and IJVs performance (Dhanaraj et al., 2004), and 4)

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organizational characteristics, structural mechanisms, contextual factors and knowledge acquisition from foreign parents in IJVs (Lyles and Salk, 1996).

2.13.2 Age of Joint Venture (JVAGE) Age of JV (JVAGE) or JVs duration is expected to influence the relationship between TTCHARS and TTDEG (Foss and Pedersen, 2002). This is because the longer the collaborative relationship the greater the opportunity for JV partners to acquire, share, learn, and transfer technology and knowledge between them (Kale et al., 2000; Lin, 2005). However, Kale et al. (2000) caution that a longer duration of JV relationship can escalate the propensity of losing the valuable proprietary asset to a JV partner. Gomez-Mejia and Palich (1997) posit that the subsidiary maturity in the local market can develop capabilities in overcoming the negative impacts of cultural difference through deliberate strategies.

From the strategic alliance context, studies have shown that age of alliance is an important variable because as the alliance sustains over the years 1) the cultural distances tend to decrease (Meschi, 1997), 2) the inter-partner trust intensifies (Gulati, 1995), 3) the relative bargaining power between partner changes (Yan and Gray, 1994), 4) the alliance partners develop personal attachment (Inkpen and Beamish, 1997), 5) the partners become more familiar with each others expertise and idiosyncrasies (Simonin, 1999a), and 6) older IJVs are likely to leverage the acquired knowledge and convert it to competitive advantage (Tsang et al., 2004). However, few researchers have stressed that since alliances are perceived as a race to learn and alliances are being regarded as unstable organizational forms (Porter, 1990; Hamel, 1991; Inkpen and Beamish, 1997, Inkpen, 1998a; Yan and Gray, 1994), age of JV

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may cause a shift in the partners bargaining power associated with the acquisition of knowledge and skills which could encourage a partner firm with strong bargaining power to eliminate partner dependency (Inkpen and Beamish, 1997). JVAGE moderates the relationship between knowledge acquisition and performance for two reasons 1) when a JV can survive within a considerable period, firms become more practiced and efficient at what they already do, and 2) studies have shown that duration of relationship in JVs is positively associated with frequency of communication and information exchange between partners (Tsang et al., 2004; Hallen et al., 1991). As the relationship develops, shared experience is able to resolve inter-firm conflicts through open problem solving and increases mutual compromise between partners (Lin and Germain, 1998).

Few knowledge acquisition studies have empirically examined the effect of JVAGE on knowledge acquisition and performance. The empirical results show that 1) JVAGE is insignificant in the relationship between knowledge acquisition and IJVs performance (Tsang et al., 2004), and 2) JVAGE is insignificant in the relationship between organizational characteristics, structural mechanisms, contextual factors and knowledge acquisition (Lyles and Salk, 1996). Nevertheless, few strategic alliance studies have found consistent result with the theoretical studies where JVAGE has been found to significantly moderate the relationships between 1) ambiguity and KT, tacitness and ambiguity, and organizational distance and ambiguity (Simonin, 1999a), 2) tacitness and ambiguity, and specificity and marketing knowledge (Simonin, 1999b), 3) the ICVs length and personal attachment (Luo, 2001), and 4) relational capital and learning (Kale et al., 2000).

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2.13.3 MNCs Country of Origin (MNCCOO) Many empirical studies have established that country of origin/nationality (MNCCOO) has a significant impact on 1) the propensities of MNCs choice of global strategies, 2) organizational structures and control system, 3) internal corporate cultures (Bartlett and Ghoshal, 1989; Egelhoff, 1984; Franko, 1976; Porter, 1990; Yip et al., 1994), 4) expected outcomes (Harrigan, 1988b), 5) alliance outcomes and performance (Parkhe, 1993), 6) partners learning and protection of proprietary assets in an alliance (Kale et al., 2000), and 7) the way how MNCs operate (Gupta and Govindarajan, 2000). Problems related to cultural differences, opinions, beliefs, and attitudes tend to accelerate due to alliance partners nationality (Kale et al., 2001). The differences in culture, language, educational background and distance with cross national partners which act as barriers to inter-organizational learning will impede the inter-partner learning and KT (Mowery et al. 1996). However, Yin and Bao (2006) find nationality of alliance partners (the U.S, Japan and Western MNCs) has no significant moderating effect on the relationship between the supplier and recipient factors and tacit knowledge acquisition.

2.13.4 MNCs Types of Industry (MNCIND) Based on economic theory, MNCs have become increasingly important due to ineffectiveness and inefficiency of the external market in facilitating intra-knowledge transfer (Caves, 1982; Hymer, 1960; Kindleberger, 1969). Empirical examination of the economic theory has consistently found that industries that are characterized by greater degrees of knowledge intensities (industries with higher R&D-to-sales-ratios and/or higher advertisingto-sales ratios) have the propensity to become more global than other industries (Gupta and

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Govindarajan, 2000; Goedde, 1978; Grueber et al., 1967; Horst, 1972). Asymmetries in the industries characteristics indicate that certain industries are more global and require a higher level of knowledge transfer than other industries (Minbaeva et al., 2003). Past studies have categorized MNCIND in terms of 1) fixed asset intensive and advertising intensive industries (Gupta and Govindarajan, 2000), 2) metal and electronic; food, pulp and paper; chemical; finance service; wholesale and retail; and hotel and transportation industries (Minbaeva et al. 2003), 3) electronics, machinery and metals, and chemical products industries (Cho and Lee, 2004), 4) biochemical and non-biochemical industries (Lane and Lubatkin, 1998), 5) service and manufacturing industries (Lane et al., 2001), and 6) industry sales growth (Luo, 2001).

Empirical studies on intra and inter-firm KT support that MNCIND have a significant moderating effect in the relationships between 1) value and knowledge stock, motivational disposition to share knowledge, existence and richness of transmission channels, motivational disposition to acquire knowledge and intra-corporate knowledge transfer (Gupta and Govindarajan, 2000), 2) MNCs subsidiary human resource management (HRM) practices, absorptive capacity (ACAP), and intra-firm KT (Minbaeva et al., 2003), 3) the firm characteristics and intra-network knowledge sharing (Cho and Lee, 2004), 4) relative ACAP and inter-organizational learning (Lane and Lubatkin, 1998), and 5) inter-firm KT and IJV performance (Lane et al., 2001). However, some studies do not consider industry characteristics as important in order to maintain parsimony and increase statistical power (Dhanaraj et al., 2004; Nielsen, 2007; Luo, 2001).

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2.14 Chapter Summary This chapter describes in detail the theoretical foundation of the study which is based on the underlying KVB and OL perspectives. This chapter offers a literature review on previous TT models which have also become the foundation of the studys conceptual framework. The main objective of this chapter is to extensively review the literature by describing 1) the critical relationships between all TTCHARS as the independent variables (KCHAR, TRCHAR, TSCHAR, and RCHAR) and degree of technology transfer (TTDEG), 2) the relationship between TTDEG and LFP, and 3) the role of moderating variables (MNCSIZE, JVAGE, MNCCOO, and MNCIND) in the TTCHARS-TTDEG relationship.

From the review, most of the previous theoretical and empirical studies acknowledge that knowledge characteristics (KCHAR) have significant effect on TTDEG. Technological knowledge as one of the sustainable strategic resources is difficult to transfer in IJVs because it is well embodied within the suppliers competencies, highly personal, and deeply rooted in action, commitment, and involvement within a specific context. Previous studies on the recipients characteristics (TRCHAR) support the significant positive impact of absorptive capacity (ACAP) and recipient collaborativeness (RCOL) on TTDEG. To facilitate TT and organizational learning in JVs, the recipient must possess sufficient absorptive capacity to extract knowledge, intensify their technological learning efforts, and adopt the collaborative learning attitudes.

Studies on suppliers characteristics (TSCHAR) have found inconsistent results where partner protectiveness (PPROTEC) is found to have a significant negative impact on

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TTDEG. Since proprietary assets and competencies are the main source of suppliers sustainable competitive advantage, technologies are likely to be protected in JVs. On the other hand, both theoretical and empirical studies find that transfer capacity (TRANSCAP) has significant positive effect on TTDEG. The suppliers capacity to transfer technology in terms of its ability to articulate and describe the potential uses of knowledge can significantly influence TTDEG. For relationship characteristics (RCHAR), the theoretical and empirical studies have found significant effects of relationship quality and mutual trust on TTDEG. Quality of relationship through frequent and effective interactions is a clear prerequisite for high degree of technology transfer in JVs. Mutual trust among partners can develop openness thus increasing degree of transparency between JV partners.

On the relationship between degree of technology transfer and performance, most of the empirical studies record a significant positive impact of KT on IJVs, subsidiaries, and local firms performance (LFP). A higher degree of technology transfer is likely to increase organization performance, innovation, technological capabilities, and competitiveness. On the effect of moderating variables in TTCHARS-TTDEG relationship, previous studies are in consensus on the significant role played by these variables (MNC SIZE, JVAGE, MNCCOO, and MNCIND) in both intra and inter-firm KT.

Having reviewed the above variables related to this study, the succeeding chapter describes the conceptual framework and hypotheses development which are based on the literature review above.

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CHAPTER 3

CONCEPTUAL FRAMEWORK

3.1 Introduction This chapter describes the conceptual framework and hypotheses development of the study. It commences with the introduction, discussions on theories underpinning the framework followed by discussions on hypotheses development. The primary interest of this study is the degree of technology transfer (TTDEG) as the dependent variable. In the first section of the conceptual framework, TTDEG acts as the dependent variable in its linear relationship with all technology transfer characteristics (TTCHARS), which consists of knowledge (KCHAR), technology recipient (TRCHAR), technology supplier (TSCHAR), and relationship (RCHAR) characteristics and their dimensions. Subsequently, the moderating variables (MNCSIZE, JVAGE, MNCCOO, and MNCIND) are tested to examine their possible moderating effects on TTCHARS-TTDEG relationship. In the second section of the conceptual framework, TTDEG acts as an independent variable in its linear relationship with local firms performance (LFP) and its dimensions.

3.2 Theories Underpinning the Conceptual Framework The main theories underpinning the relationships of variables in the conceptual framework of this study are knowledgebased view of the firm (KBV) and organizational learning (OL) perspectives. The perspective of KBV underlies the relationships between KCHAR and their sub-variables: tacitness (TCT), complexity (COMPLX) and specificity (SPEC), and

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dependent variable TTDEG. Both KBV and OL perspectives form the basis of the relationships between the TRCHAR and their sub-variables: absorptive capacity (ACAP) and recipient collaborativeness (RCOL) and TTDEG. The relationships between the TSCHAR and sub-variables: partner protectiveness (PPROTEC) and transfer capacity (TRANSCAP) and TTDEG are governed by both KBV and OL perspectives. The OL perspective is the basis of the relationship between RCHAR and their sub-variables: relationship quality (RELQLTY) and mutual trust (MT) and TTDEG. For the TTCHARS-TTDEG relationship, both KBV and OL perspectives are integrated to support the relationship.

As indicated in section 2.6, both KBV and OL perspectives have not only provided a strong foundation for relationships between all TTCHARS and TTDEG in this framework but they also provide valuable arguments, theoretical insights, empirical findings, hypotheses development, testable constructs and reliable measurements (Simonin, 1999a; Minbaeva, 2007)

3.3 The Studys Conceptual Framework The first section of this study examines the relationships between all TTCHARS and TTDEG. The key independent variables are divided into four groups of TTCHARS identified as: 1) KCHAR; which consists of TCT, COMPLX and SPEC, 2) TRCHAR; which consists of ACAP and RCOL, 3) TSCHAR; which consists of PPROTEC and TRANSCAP, and 4) RCHAR; which consists of RELQLTY and MT. This study also employs four variables: MNCs size (MNCSIZE), age of joint venture (JVAGE), MNCs country of origin (MNC COO) and MNCs types of industry (MNCIND) as moderating variables. The second section of this

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study examines the relationships between TTDEG and LFP and its dimensions. Figure 3.1 below depicts the relationships between the variables in the studys conceptual framework. Figure 3.1: The Conceptual Framework of TTCHARS - TTDEG - LFP in IJV
Knowledge Characteristics
. Tacitness *(KBV Perspective) . Complexity *(KBV Perspective) . Specificity *(KBV Perspective)

Moderating Variables
. Firm Size . Age of JV

H1

H7 H8

Recipient Characteristics
. Absorptive Capacity *(KBV Perspective) . Recipient Collaborativeness *(OL Perspective)
H2

Capacity

Degree of Tacit Technology Knowledge H5 H5 Transfer


Explicit Knowledge
H3

Corporate Performance
H6

Local Firms H6 Performance


Human Resource Performance

Supplier Characteristics
. Partner Protectiveness *(OL Perspective) . Transfer Capacity *(KBV Perspective)

Relationship Characteristics
. Relationship Quality *(OL Perspective) . Mutual Trust *(OL Perspective)
H4

H9 H10

Moderating Variables
. Country of Origin . Types of Industry

In brief, Figure 3.1 above shows the linear relationships between 1) KCHAR (TCT, COMPLX and SPEC) and TTDEG, 2) TRCHAR (ACAP and RCOL) and TTDEG, 3) TSCHAR (PPROTEC and TRANSCAP) and TTDEG, 4) RCHAR (RELQLTY and MT) and TTDEG, 5) all TTCHARS and TTDEG, and 6) TTDEG and LFP.

Figure 3.1 also shows the inclusion of MNC SIZE, JVAGE, MNCCOO and MNCIND as moderating variables in the relationships between all TTCHARS and TTDEG. 140

As illustrated in the conceptual framework diagram (Figure 3.1), the first, second, third, and fourth linkages between KCHAR, TRCHAR, TSCHAR, RCHAR and TTDEG; which are developed from the integrated KBV and OL perspectives, aim to achieve the first research objective of this study. Based on the integrated perspectives of KBV and OL, the fifth linkage between all TTCHARS and TTDEG is to achieve the second research objective of this study. The sixth linkage between TTDEG and LFP is aimed at achieving the third research objective of this study. Finally, the seventh, eighth, ninth, and tenth linkages are developed to achieve the fourth research objective of this study.

The holistic conceptual model in Figure 3.1 proposes that 1) all TTCHARS are critical in affecting TTDEG in IJVs, 2) the TTCHARS-TTDEG relationship could possibly be moderated by MNCSIZE, JVAGE, MNCCOO and MNCIND, and 3) TTDEG affects LFP.

3.4 Hypotheses Development As indicated in section 3.1 above, this studys framework is divided into two sections. As part of the first section Hypotheses 1, 2, 3, 4 are developed to test the direct and individual effects of KCHAR, TRCHAR, TSCHAR, RCHAR and their dimensions on TTDEG and its dimensions. Hypothesis 5 tests whether all TTCHARS and their dimensions are predictors of TTDEG. Hypotheses 7, 8, 9 and 10 test the effects of moderating variables on TTCHARSTTDEG relationship. In the second section, H6 seeks to test the effects of TTDEG on LFP and its dimensions. All the hypotheses in this study are developed as directional. Due to the extensive theoretical studies and empirical findings on TT, the hypotheses in this study are developed not to reject or disapprove any theory or finding (Sekaran, 2003).

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3.4.1 Hypothesis 1 Previous studies on knowledge transfer have acknowledged the significant effect of KCHAR (TCT, COMPLX and SPEC) on knowledge transfer (Kogut and Zander, 1992, 1993; Simonin, 1999a, 1999b, Pak and Park, 2004; Minbaeva, 2007). KBV perspective suggests that tacit knowledge/tacitness (TCT) is not easily replicable and transferable (Mowery and Rosenberg, 1989). A number of studies have established the role played by tacit knowledge as a barrier to TK and TT (Kogut and Zander, 1996; Choi and Lee, 1997; Simonin, 1999a). Tacit knowledge; which is context-specific, embedded in non-standardized and tailored process, is difficult to acquire and exploit (Polanyi, 1962).

Tacit knowledge is the implicit and non-codifiable accumulation of skills resulting from learning by doing, accumulated through experience and refined by practice (Reed and DeFillippi, 1990). Hence, tacit knowledge which is highly personal, deeply rooted in action, commitment, and involvement within a specific context, is hard to be formalized, communicated and shared (Nonaka, 1994). Tacit knowledge is subject to time-compression diseconomies which means to accelerate tacit knowledge learning is very difficult or perhaps not even possible no matter how much effort or resources are invested to acquire them (Dierickx and Cool, 1989).

In the context of OL perspective, tacit knowledge, which is hard to formalize and not easily visible, is difficult to be communicated and shared with the other partners as it involves intangible factors that are embedded in the personal beliefs, experiences, and values of an organization (Inkpen, 1998a, Inkpen and Dinur, 1998). Empirical studies have found support

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that TCT has a significant negative impact which impedes inter-firm knowledge transfer (Simonin, 1999a, 1999b; Pak and Park, 2004; Minbaeva, 2007).

Past studies have also affirmed the significant effect of knowledge complexity (COMPLX) on knowledge transfer. COMPLX, as a result of the interdependent skills and assets, arises from large numbers of technologies, organization routines, individual and team-based experience (Reed and DeFillippi, 1990). COMPLX of human and technological systems produce a higher level of ambiguity that restrains imitation and impedes transferability. COMPLX as the number of interdependent technologies, routines, individuals and resources is linked to a particular knowledge or asset (Simonin, 1999a). As COMPLX increases, knowledge or technology becomes difficult to transfer or imitate (Kogut and Zander, 1993). Empirical studies have found support that COMPLX has a significant negative effect on both intra and inter-firm knowledge transfer (Simonin, 1999a, 1999b; Minbaeva, 2007).

Specificity (SPEC), as the third knowledge characteristic, refers to assets specificity that includes site, physical, dedicated and human assets; which are durable investments undertaken in support of particular transaction (Williamson, 1985). Assets specificity as durable investments in specialized equipment, facilities and skilled human resources are not only acting as a source of ambiguity and barrier to imitation but also as a barrier to knowledge transferability (Simonin, 1999a; 1999b). From the KBV perspective, a firm creates sustainable competitive advantage by developing valuable assets and competencies which are firm-specific, produce complex social relationships, embedded in the firms history and culture thus generating organizational tacit knowledge (Lado and Wilson, 1994).

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As the firms source of competitive advantage, knowledge or technology which is firmspecific is difficult to transfer (Kogut and Zander, 1993). Empirical studies have established that SPEC has a negative effect on knowledge transfer (Simonin, 1999a; Pak and Park, 2004; Minbaeva, 2007). Building on the theoretical and empirical studies, KCHAR which consists of TCT, COMPLX and SPEC are predicted to have a significant negative effect on TTDEG and its dimensions. This study advances the following hypotheses: H1: Knowledge characteristics are negatively related to degree of technology transfer in IJVs. H1a: Knowledge characteristics are negatively related to degree of tacit knowledge in IJVs. H1b: Knowledge characteristics are negatively related to degree of explicit knowledge in IJVs. H1c: The higher the degree of tacitness the lower the degree of technology transfers to local recipient firms in IJVs. H1d: The higher the degree of complexity the lower the degree of technology transfers to local recipient firms in IJVs. H1e: The higher the degree of specificity the lower the degree of technology transfers to local recipient firms in IJVs.

3.4.2 Hypothesis 2 Many theoretical and empirical studies have found support for the positive effect of absorptive capacity (ACAP) on knowledge transfer. A low degree of the technology recipients ACAP impedes both intra and inter-firm knowledge transfer (Cohen and Levinthal, 1990; Hamel, 1991; Lyles and Salk, 1996; Mowery et al., 1996; Lane and Lubatkin, 1998; Lane et al., 2001; Gupta and Govindarajan, 2000; Minbaeva et al., 2003, Minbaeva, 2007; Pak and Park, 2004; Simonin, 1999a, 1999b). ACAP is the firms ability to recognize, assimilate, and apply to commercial ends the value of new external information (Cohen and Levinthal, 1990). Prior related knowledge, as the important element of ACAP, is critical for organizations to assimilate and exploit new knowledge. By possessing sufficient

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prior related knowledge, organizations are able to have an adequate ability to absorb new external knowledge (Cohen and Levinthal, 1990). OL literature suggests that another critical element of ACAP is the recipient firms intensity of effort. Intensity of effort is reflected in the amount of energy expended by organizational members to solve problems through organization members directing their considerable time and effort in learning how to solve problems before attempting to solve complex problems (Kim, 1998). Both intra and interfirm knowledge transfer literature have found positive effect of ACAP on knowledge transfer (Szulanski, 1996; Minbaeva, 2007; Lyles and Salk, 1996; Mowery et al., 1996; Simonin, 1999a; Pak and Park, 2004; Yin and Bao, 2006).

Another important dimension of TRCHAR is recipient collaborative (RCOL). RCOL is closely related to the recipients learning intent (competitive vs. collaborative intent). The technology recipient firms willingness to establish a mutually beneficial and collaborative relationship requires the recipient firms honest intention to create common benefits for both JV partners (Yin and Bao, 2006). Studies on inter OL have suggested that cooperative/collective learning encourages the alliance partners to work together by sharing their knowledge, benefit each others complementarities and provide mutual opportunities to extract potential synergies between their respective competencies (Doz, 1996; Geringer, 1991). Collaborative learning creates an access to the partners knowledge and skills such as product and process technology, organizational skills, and knowledge about new environments (Inkpen, 1995a).

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In the collaborative learning environment where the recipients learning intent is crucial, the transferring partner tends to be more open or transparent in terms of sharing and transferring knowledge to the acquiring firm as it involves mutual exchange of valuable knowledge (Inkpen, 2000). RCOL, which is reflected in the partners learning intent (competitive vs. collaborative intent), determines degree of openness or transparency in knowledge sharing and knowledge transfer (Inkpen, 2000). Few studies have found positive effect of RCOL on knowledge transfer (Yin and Boa, 2006; Hamel, 1991). Building on the theoretical and empirical studies, TRCHAR which consists of ACAP and recipient RCOL are expected to have a significant positive effect on TTDEG and its dimensions. Thus, this study advances the following hypotheses: H2: Technology recipient characteristics are positively related to degree of technology transfer in IJVs.

H2a: Technology recipient characteristics are positively related to degree of tacit knowledge in IJVs. H2b: Technology recipient characteristics are positively related to degree of explicit knowledge in IJVs. H2c: The higher the degree of absorptive capacity of local recipient firms the higher the degree of technology transfers in IJVs. H2d: The higher the degree of recipient collaborativeness of local recipient firms the higher the degree of technology transfers in IJVs.

3.4.3 Hypothesis 3 Partners in collaborative relationship such as JVs are expected to mutually exchange their valuable assets, resources, information, knowledge and technology between them in order to achieve mutual benefits (Inkpen, 2000; Khanna et al., 1998; Child and Faulkner, 1998). However, the KBV perspective suggests that since the firms competencies are the sources of technology suppliers sustainable competitive advantage therefore for fear of losing ownership of their valuable assets they tend to protect their competencies from the 146

opportunist recipient partner (Barney, 1991; Cohen and Levinthal, 1990; Hamel, 1991). Partner protectiveness (PPROTEC) is closely related to partners transparency or openness (Hamel, 1991).

Relationship openness has been described as the willingness and ability of JVs partners to share information and communicate openly (Inkpen, 2000). Most researchers are in consensus that the extent of willingness of the JVs partners to share and transfer knowledge will strongly depend on the degree of partner protectiveness and transparency (Hamel, 1991; Inkpen, 2000). Studies have suggested that if a situation of high competitive overlap exists, an alliance partner may be very reluctant to share knowledge due to risk of knowledge spillovers to the other partner (Inkpen, 1998a; Inkpen, 2000; Yan and Luo, 2001). However, the theoretical and empirical studies have found inconsistent results of the impact of PPROTEC on both intra and inter-firm knowledge transfer (Szulanski, 1996; Simonin, 2004).

As for the technology suppliers transfer capacity (TRANSCAP), many studies have suggested that while firms differ in their ability to create knowledge, they also differ in their ability to transfer knowledge within and outside of the organization boundary (Kogut and Zander, 1992, 1993; Szulanski, 1996). The efficiency in transmitting knowledge by the technology supplier is important in both intra and inter-firm knowledge transfer (Martin and Solomon, 2003). Studies on inter-firm knowledge transfer suggest that the firms ability to transfer knowledge facilitates the OL process as it justifies their commitments in the collaborative relationship (Inkpen, 1998a; Inkpen 2000; Khanna et al., 1998; Child and Faulkner, 1998). Empirical studies have shown that TRANSCAP has a significant positive

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impact on both intra and inter-firm knowledge transfer (Szulanski, 1996; Gupta and Govindarajan, 2000; Minbaeva, 2007; Yin and Bao, 2006). Thus, building on the theoretical and empirical studies, TSCHAR which consists of PROTEC and TRANSCAP are expected to have a significant effect on TTDEG and its dimensions. Thus, this study advances the following hypotheses: H3: Technology supplier characteristics are positively related to degree of technology transfer in IJVs. H3a: Technology supplier characteristics are positively related to degree of tacit knowledge in IJVs. H3b: Technology supplier characteristics are positively related to degree of explicit knowledge in IJVs. H3c: The lower the degree of partner protectiveness of the foreign supplier firms the higher the degree of technology transfer in IJVs. H3d: The higher the degree of transfer capacity of the foreign supplier firms the higher the degree of technology transfer in IJVs.

3.4.4 Hypothesis 4 OL literature suggests that acquiring and transferring technology require frequent and effective interactions between the supplier and recipient as knowledge is firm-specific, embedded in firm organizational context, personal quality in nature and idiosyncrasy of the supplier firms (Nonaka, 1994; Kogut and Zander, 1992, 1993; Bresman et al., 1999). Studies have identified relationship quality (RELQLTY) as the critical element of relationship characteristic in both intra and inter-firm knowledge transfer (Szulanski, 1996; Gupta and Govindarajan, 2000; Lin, 2005; Gupta, 1987; Wang et al., 2004; Bresman et al., 1999). RELQLTY promotes intimacy of relationship between the source and recipient unit (Szulanski, 1996), informality, openness and density of communication (Gupta and Govindarajan, 2000), and increases openness of communication, spontaneous and open exchange of information between interacting parties (Gupta, 1987). 148

In the context of strategic alliance, RELQLTY promotes greater opportunities to learn, share and access alliance partners strategic knowledge and competencies. It also creates higher relationship openness which could directly affect the willingness of alliance partner to share information and communicate openly (Inkpen, 1998a, 2000). Consistent with the theoretical studies, empirical studies have established that RELQLTY has a significant positive effect on both intra and inter-firm knowledge transfer (Szulanski, 1996; Minbaeva, 2007; Hansen, 1999, 2002; Gupta and Govindarajan, 2000; Lin, 2005; Bresman et al., 1999).

With respect to mutual trust (MT) between partners, previous studies have suggested that MT creates opportunities for a mutual inter-organizational learning when partners become more open and committed in sharing their knowledge and competencies, less protective of their knowledge, and develop free exchange of information between partners (Inkpen, 2000). When the level of transparency or openness between the alliance partners is high, the propensity for inter-partner learning is also high as knowledge is more accessible due to free exchange of information (Hamel, 1991; Doz and Hamel, 1998; Inkpen, 2000).

MT encourages partners to be more open and transparent in exchanging, sharing, and transferring knowledge and technology between them due to non-existence of opportunistic behaviors (Kale et al., 2000; Gulati, 1995; Uzzi, 1997; Child and Faulkner, 1998; Steensma and Lyles, 2000; Lane et al., 2001). MT is found to have reduced search cost, increased benefits and alliances performance (Gulati, 1995), increased alliances cooperation, improved flexibility, reduced the cost of coordinating activities, and increased knowledge transfer and learning (Smith et al., 1995). Empirical studies have found positive impact of

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mutual trust on inter-firm knowledge transfer (Nielsen, 2007; Kale et al., 2000; Luo, 2001; Dhanaraj et al., 2004; Pak and Park, 2004). Building on the previous studies, RELQLTY and MT are predicted to have a significant positive effect on TTDEG and its dimensions. Thus, this study advances the following hypotheses: H4: Relationship characteristics are positively related to degree of technology transfer in IJVs. H4a: Relationship characteristics are positively related to degree of tacit knowledge in IJVs. H4b: Relationship characteristics are positively related to degree of explicit knowledge in IJVs. H4c: The higher the degree of relationship quality between the foreign supplier firms and local recipient firms the higher the degree of technology transfer in IJVs. H4d: The higher the degree of mutual trust between the foreign supplier firms and local recipient firms the higher the degree of technology transfer in IJVs.

3.4.5 Hypothesis 5 Building on intra and inter-firm knowledge transfer literature, all technology transfer characteristics (TTCHARS) which form the studys conceptual framework, are viewed as both the critical facilitators/determinants and barriers to TT (Szulanski, 1996). These TTCHARS are inter-dependent, co-existed and closely related to each other; where failure to manage any of TT characteristic will eventually affect the TT outcomes. Previous studies on intra and inter-knowledge transfer have acknowledged the significant influence of these facilitators/barriers on TTs success or failure (Szulanski, 1996, 2003; Gupta and Govindarajan, 2003; Minbaeva, 2007; Hamel, 1991; Inkpen, 1998, 2000).

For technology acquisition to occur in IJVs, technology must first be accessible by the learning partner. In a collaborative/cooperative learning environment as opposed to competitive learning, the transferring partner is more transparent/open and willing to share 150

and transfer their proprietary knowledge, competencies and skills although they are organizationally embedded in the organizations routines and processes (Hamel, 1991; Inkpen, 2000; Child and Faulkner, 1998). As a result, this will reduce the degree of PPROTEC to allow for freer and greater flow of information to the learning partner particularly the accessibility to tacit knowledge (Inkpen, 2000; Yan and Luo, 2001; Hamel, 1991; Doz and Hamel, 1998).

Relationship openness thus is strongly influenced by the learning intent of the recipient partner and inter-partner MT (Inkpen, 2000; Inkpen and Beamish, 1997). If competitive overlap exists and for fear of losing their proprietary technology/knowledge and risk of spillovers, the transferring partner is likely to be less transparent, more protective of their technology either through explicit or active measures, and restrict the information flow to the opportunist partner who perceives JV as a low cost approach to internalize the other partners competencies (Hamel, 1991; Simonin, 1999a, 2004; Steensma and Lyles, 2000). The recipient partners learning intent also determines the TRANSCAP of the transferring partner in terms of increasing motivation to transfer technology.

MT between JV partners is important to reduce the fear of opportunistic behaviors of the recipient partner, promotes greater transparency which may contribute a higher degree of accessibility to partners technological knowledge, and motivates the transferring partner to share and transfer more/higher technology (Inkpen, 1998; 2000). As a result of the collaborative learning intent (RCOL), RELQLTY promotes a higher degree of MT and

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openness between partners resulting in a higher degree of knowledge sharing and transfer of tacit knowledge (Inkpen, 2000; von Hippel, 1998; Marsden, 1990; Kale et al., 2000).

On the other aspect, learning capability (ACAP) promotes higher TTDEG if the learning partner has the capacity to recognize, absorb, assimilate and apply new

technology/knowledge (Cohen and Levinthal, 1990; Lane and Lubatkin, 1998). ACAP is closely related to knowledge connection and knowledge relatedness between JV partners (Inkpen and Dinur, 1998; Inkpen, 2000). Acquiring tacit knowledge involves various organizational levels and personal interactions between individuals and groups. Thus, knowledge connection and knowledge relatedness between JV partners are capable of creating potentials for sharing more personal observations and experiences (Von Krogh, 1994; Inkpen 2000). Although TCT, COMPLX and SPEC have greatly contributed to technology ambiguity, these barriers to technological gaps between JV partners may be reduced or eliminated if the learning partner has adequate prior related knowledge and intensity of learning efforts (Hamel, 1991; Inkpen, 2000; Szulanski, 1996; Kim, 1998). Building on previous theoretical and empirical studies, this study proposes the following hypotheses: H5: Technology transfer characteristics, which consist of knowledge, technology recipient, technology supplier, and relationship characteristics, are significant and good predictors of degree of technology transfer in IJVs.

H5a: Technology transfer characteristics sub-variables, which consist of tacitness, complexity, specificity, absorptive capacity, recipient collaborativeness, partner protectiveness, transfer capacity, relationship quality, and mutual trust, are significant predictors of degree of technology transfer in IJVs.

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3.4.6 Hypothesis 6 Most of the studies on strategic alliance operationalize performance as either the JV or MNCs subsidiary performance. Intra and inter-firm empirical studies on knowledge transfer and acquisition have established that knowledge transfer and acquisition have a significant positive effect on human resource, business and general performance (Lyles and Salk, 1996), operational cost, operational efficiency, employee productivity, business volume, market share, market penetration, product quality, customer service, and customer satisfaction (Lane et al., 2001; Tsang et al., 2004; Dhanaraj et al., 2004; Cui et al., 2006). On the local firms performance (LFP), tacit knowledge acquisition is found to have a significant positive effect on the recipient firms performance in terms of increasing their productivity, revenue and market share (Yin and Bao, 2006). Based on the empirical studies, this study proposes the following hypotheses: H6: The higher the degree of technology transfer in IJVs which consists of degree of tacit and explicit knowledge, the higher the degree of local firms performance. H6a: The higher the degree of technology transfers in IJVs which consists of degree of tacit and explicit knowledge, the higher the degree of local firms corporate performance. H6b: The higher the degree of technology transfers in IJVs which consists of degree of tacit and explicit knowledge, the higher the degree of local firms human resource performance.

3.4.7 Hypothesis 7 Past studies have affirmed that MNCSIZE has a significant effect on the intensity of strategic partnering and technological cooperation (Hagedoorn and Schakenraad, 1994), propensity of the firm to develop competitive advantage and achieve the above-average performance (Porter, 1980), organizational learning (Marquardt and Reynolds, 1994), motives for alliance formation (Glaister and Buckley, 1996), and asymmetric bargaining power between partners

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in the alliance relationship (Khanna et al., 1998). Generally, as compared to large firms, small firms do not have adequate resources and expertise to undertake inter-firm TT and are more likely to transfer technology through licensing agreements (Stobaugh, 1998).

Empirical studies have found that MNCSIZE has a significant moderating effect on the relationships 1) between experience, know-how and collaborative relationship, and 2) between knowledge tacitness and ambiguity (Simonin, 1997; Simonin, 2004; Dhanaraj et al., 2004; Bresman et al. 1999). However, other studies have found MNC SIZE do not moderate 1) the knowledge-performance relationship, and absorptive capacity, and 2) learning and IJV performance relationship (Tsang et al., 2004; Lane et al., 2001). Building on the theoretical studies and empirical findings, MNCSIZE is predicted to have a significant moderating effect on the relationship between TTCHARS and TTDEG. Thus, this study advances the following hypothesis: H7: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by the MNCs size.

3.4.8 Hypothesis 8 The IJV literature suggests that the longer the collaborative relationships the greater the opportunity for JV partners to share, learn and transfer technology and knowledge between them. This is because the duration of relationship is positively associated with frequency of communication and information exchange between partners (Kale et al., 2000; Hallen et al., 1991; Foss and Pedersen, 2002). Nevertheless, duration of JV could also increase the propensity of losing the valuable proprietary asset to the other JV partner (Kale et al., 2000). From the strategic alliance perspective, as an alliance sustains overtime, JVAGE provides

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several effects such as it intensifies inter-partner trust, changes the bargaining power between partners, and develops partners personal attachment (Gulati, 1995; Yan and Gray, 1994; Inkpen and Beamish, 1997). Empirical studies have found that the moderating effect of JVAGE has inconsistent results. Few empirical studies on inter-firm knowledge transfer in IJVs find JVAGE is insignificant in relationship between 1) knowledge acquisitionperformance relationship, and 2) organizational characteristics, structural mechanisms, contextual factors, and knowledge acquisition relationship (Tsang et al., 2004; Lin, 2005; Lyles and Salk, 1996). Nevertheless, empirical studies have also recorded significant moderating effect of JVAGE on 1) ambiguity-knowledge transfer relationship, and 2) knowledge characteristics-marketing knowledge transfer relationship (Simonin, 1999a, 1999b). Building on the above theoretical studies and empirical findings, JVAGE is predicted to have a significant moderating effect on the relationship between TTCHARS and TTDEG. Therefore, this study hypothesizes as follows: H8: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by age of JV.

3.4.9 Hypothesis 9 Many theoretical and empirical studies have acknowledged the significant role of MNC COO on the propensities of MNCs choice of global strategies, organizational structures, control system, and internal corporate cultures (Bartlett and Ghoshal, 1990; Egelhoff, 1984; Franko, 1976; Porter, 1990; Yip et al., 1994). In the collaborative relationship such as JVs, partners tend to encounter various problems related to cultural differences, opinions, beliefs, and attitudes originated from the alliance partners nationality (Kale et al., 2001). Studies have shown that nationality has a significant influence on the outcomes, performances, and inter-

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organizational learning in an alliance (Harrigan, 1988b; Parkhe, 1993; Mowery et al., 1996). Both theoretical and empirical studies have different views on the moderating effect of MNCCOO on knowledge transfer (Kale et al., 2000; Gupta and Govindarajan, 2000; Cho and Lee, 2004). However, the empirical findings suggest that MNC COO has no moderating effect on the relationship between the supplier and recipient factors and tacit knowledge acquisition (Yin and Bao, 2006). Based on the theoretical and empirical studies, this study predicts that MNCCOO moderates the TTCHARS-TTDEG relationship. Thus, this study advances the following hypothesis: H9: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by the MNCs country of origin.

3.4.10 Hypothesis 10 Economic theory has consistently found that industries characterized by greater degrees of knowledge intensities have the propensity to become more global than other industries (Goedde, 1978; Grueber et al., 1967; Horst, 1972). Asymmetries in industries characteristics show that certain industries are more global thus requiring a higher level of knowledge transfer than other industries (Minbaeva, 2007). Empirical studies on intra and inter-firm knowledge transfer have found support that MNCIND has a significant influence on knowledge transfer (Gupta and Govindarajan, 2000; Minbaeva, 2007; Cho and Lee, 2004; Lane and Lubatkin, 1998; Lane et al., 2001). However, few studies have also found MNC IND as insignificant (Luo, 2001; Dhanaraj et al., 2004; Nielsen, 2007). Thus, building on the previous theoretical and empirical studies, this study advances the following hypothesis: H10: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by MNCs types of industry.

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3.5 Chapter summary This chapter illustrates the variables employed in the conceptual framework; which are specifically generated from KBV and OL perspectives. The integrated conceptual framework is developed from the previous TT models, theoretical studies and empirical findings gathered from these two perspectives. The hypotheses developed and tested in this study are built from variables which formed the studys conceptual framework. The hypotheses are developed 1) to test the relationships between all TTCHARS (KCHAR, TRCHAR, TSCHAR, and RCHAR) and their sub-variables (dimensions) and TTDEG and its dimensions, 2) to predict whether all TTCHAR and their sub-variables are the significant predictors of TTDEG, 3) to examine the relationships between TTDEG and local firms performance (LFP) and its dimension, and 4) to examine the effect of moderating variables (MNCSIZE, JVAGE, MNCCOO, and MNCIND) in the relationship between TTCHARS and TTDEG. In line with the studys objectives, the hypotheses are developed in response to recent literature which highlights the need for more hypothesis development and testing on inter-firm TT between MNCs and local firms (Pak and Park, 2004; Yin and Bao, 2006). Although studies on TT and KT in strategic alliance have contributed many interesting theories, they are still empirically under researched (Simonin, 2004, 1999a). Prior to developing the hypotheses, the researcher has extensively referred to both theoretical and empirical studies.

Having developed the above conceptual framework and hypotheses, the succeeding chapter describes the methodology employed by this study.

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CHAPTER 4

RESEARCH METHODOLOGY

4.1 Introduction This chapter describes the research methodology employed by the study. It commences with the research design followed by discussions on population and unit of analysis, sample size, sampling procedures and non response issues. Next, this chapter discusses the aspects of questionnaire design, measurement of variables and pilot study. The succeeding sections discuss the reliability and validity of the measures used, data collection methods, data analysis procedures, and ends with a summary.

4.2 The Research Design The present studys approach is by hypothetic-deductive method; where hypotheses are developed and tested to describe and explain the nature of relationships between the variables in the conceptual framework. This study is correlational in nature where the objective is to illustrate and delineate the main variables that are associated with the research problems.

The philosophical approach underlying this study is positivism and this research adopts the quantitative analytical method to address issues under consideration. The positivism approach is selected because 1) it provides wide coverage of the range of situation, 2) it is fast and economical and 3) the data collected from a large sample and analyzed statistically

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may be of considerable relevance to policy decisions (Easterby-Smith et al., 1991). Furthermore, the application of more quantitative design is meant for well-known research subjects whereby the qualitative research is undertaken when not much is known about the situation or where the subjects have not been extensively studied (Sekaran, 2003; Ward et al. , 2000). The quantitative research provides a higher degree of validity and reliability in the observations when 1) the standardized measurements and sampling procedures are applied, 2) the systematic statistical analyses are conducted, and 3) it enables data generalization to a large population (Ticehurst and Veal, 1999). Nevertheless, quantitative research is frequently subject to low response rate and face the risk of failure in addressing more complex questions or issues (Sekaran, 2003).

This research is cross sectional and the field study is in a non-contrived setting (natural working environment) where 1) the data is gathered just once to answer the research questions (Sekaran, 2003), and 2) there is no interference or manipulation as compared to field experiments (Zikmund, 2003). Thus, this study involves three stages 1) the pilot or pretest study, 2) the actual survey where data are gathered through questionnaires, and 3) the data analysis, where data generated from the questionnaires are analysed using the appropriate statistical tools.

4.3 Population and Unit of Analysis The unit of analysis in this study is organizations, in specific the IJV companies operating in Malaysia. The studys population covers the IJVs that have foreign participation/equity

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which formed JV with local firms and registered with the Registrar of Companies, Malaysia (ROC). Each JV is represented by respondents either by the CEOs, MDs or GMs who are in charge of JV operations, productions, marketing, sales, and human resource. Since empirical studies on TT in Malaysia are still scarce, these top management executives are in the best position to observe and evaluate TTCHARS, TTDEG, types of technology involved and performance of the JVs. Alternatively, they can direct the questionnaires to their subordinates within the JVs who know better about inter-firm technology transfer (TT) (Simonin, 1999a).

4.4. Sample Size and Power Analysis Two components of a good sample are adequacy and representativeness. The adequacy of sample is reflected in its ability to make accurate inferences and generalization from the sample statistics to the population understudied (Maleske, 1995). The sample size should be considerably large enough to enable researchers to predict the population parameters within acceptable limits (Sekaran, 2003). Thus, in order to minimize the total cost of sampling error, it is important to determine the ideal sample size that is a representative sample of the population. As recommended by the Central Office for Research Ethics Committee (COREC, 2007) the number of the sample size should be sufficient to achieve worthwhile results, but should not be so high as to involve unnecessary recruitment and burdens for the participants (p.23).

Cohen (1988) suggests that in order to determine the adequate sample size it can be estimated by the researchers predetermining the values of three main factors: 1) the significance

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criterion (alpha size), 2) effect size, and 3) the desired statistical power to be achieved. Cohen (1988) argues that large sample size helps to reduce the error and increase the precision of the results. Thus, the main objective of using statistical power analysis in this study is to determine the suitable sample size so as to optimize as opposed to maximizing sampling effort within the constraint resources (Cohen, 1988).

According to Cohen (1988) the statistical level of significance for most behavioural sciences studies is normally fixed at alpha = .05. Alpha is described as the probability of wrongly rejecting the null hypothesis or committing a Type 1 error when in fact the null hypothesis is true. However, Eagle (1999) argues that a less stringent alpha would increase the risk of rejection of null hypothesis which may have an effect on the validity of the results. On the other hand, if the threshold (alpha = .05) is decreased to .01, the risk of a Type 1 error is reduced but this will increase the probability of committing a Type 2 error which is the failure to reject null hypothesis when it is in fact true. Thus, the commonly accepted conventional level of significance is by assigning the alpha at .05 (Ary, Jacobs, and Razavieh, 1996).

On the effect size, Cohen (1988) describes it as the degree to which the phenomenon is present in the population or the degree to which the null hypothesis is false. Effect size measures the distance or discrepancy between the null hypothesis and a specified value of the alternative hypothesis (Cohen, 1988). Conventionally, Cohen (1988) sets out standardized measures of effect size into small, medium and large values depending on the statistical analyses employed. The effect sizes to test the significance of product moment correlation

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coefficient (r) are .10 for small effect, .30 for medium effect, and .50 for large effect. For regression analysis, the effect sizes (f) are conventionally fixed at .02 for small effect, .15 for medium effect, and .35 for large effect, respectively. Thus, based on Cohens (1988) standardized measures of effect size, the larger the effect size the easier it would be to detect the degree of deviation of the null hypothesis in actual units of response. Cohen (1992) and Welkowitz et al. (1982) propose that a medium effect size (f = .15) is appropriate for behavioural sciences as 1) it would be able to approximate the average size of observed effects in various fields, and 2) a medium effect size could represent an effect that would likely be visible to the naked eye of a careful observer (Cohen, 1992, p.156).

On the power of statistical test, Cohen (1988) defines it as the probability that a statistical significance test will reject a false null hypothesis thus decreasing the risk of committing a Type 2 error. The probability of a Type 2 error refers to the false negative rate (). Power is expressed as 1-; where is defined as the probability of wrongly accepting the null hypothesis when it is in fact false or failure to reject null hypothesis that is false (Cohen, 1998). High (2000) argues that power analysis is able to reject the null hypothesis in favour of alternative hypothesis when there is adequate evidence from a collected sample that a value of a parameter from the population of interest is different from the hypothesized value. Furthermore, Thomas and Juanes (1996) stress that power analysis is a critical component in designing and testing results. Since power analysis is crucial in the process of research, Wilcox (1998) views that the number of interesting findings lost to insufficient use of statistics is alarming.

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However, determining the appropriate power for a specific study is a challenging task. This is because the lower the power the higher the risk of committing Type 2 error; where it reduces a chance of detecting a significant effect thus creating doubts to the result (High, 2000). On the other hand, should the power is fixed too high there is a possibility of detecting a small effect; which means that although the results are significant, however, the size of the effect is of little value (High, 2000). Cohen (1992) points out that a large power will result in a demand for N that is likely to exceed the researchers resources. For behavioural science studies Cohen (1992) suggests that the convention which has been commonly accepted, is to fix the power at .80 ( = .20) as a standard for adequacy. Thus, in determining the appropriate sample of this study, a power analysis was conducted using GPOWER version 3.0.10 (Buchner et al., 1997) to calculate the required sample size.

With a statistical significance of .05 (Cohen, 1988; Ary, et al., 1996), statistical power of rejecting the null hypothesis fixed at .80 (Cohen, 1992), and by using the largest effect size (.35 or above for regression analysis) the first GPOWER analysis was conducted to determine the sample size for six main predictor variables understudied; where the result of the first test shows (Appendix A) that the required sample size is 46 (power = 0.804).

Following Cohens (1988, 1992) and Welkowitz et al.s (1982) convention that is to use a medium effect size (f = .15) in determining the sample size, the second GPOWER test was conducted to determine the sample size for six main predictor variables based on a statistical significance of .05 (Cohen, 1988; Ary et al., 1996) and statistical power of rejecting null hypothesis of .80 (Cohen, 1992). Having performed the second GPOWER test, the result

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shows (Appendix B) that the sample size is fixed at 98 (power = 0.803). Therefore, since Cohens statistical power analysis is one of the most popular approaches in the behavioural sciences to determine sample size (Cappelleri and Darlington, 1994) and based on the commonly accepted conventions set by Cohen (1988, 1992), Welkowitz et al. (1982), and Ary et al. (1996), the present studys sample size of 128 (power = 0.914) is sufficient and well above Cohens (1992) convention for adequacy of statistical power. Having conducted the above power analysis, however, there is no single method which has been commonly accepted by the researchers in determining sample size. Past studies have different views on the appropriate sample size for quantitative research. For example, Roscoe (1975) suggests that a sample size larger than 30 cases but less than 500 cases as appropriate for most research. Sample size less than 100 cases are considered small, 100 cases to 200 cases are medium, and a sample size more than 200 cases is considered large (Kline, 1998).

In determining the sample size, other researchers such as Tabachnick and Fidell (2007) suggest that 1) for testing the multiple correlation, the number of sample size is (N) > 50 + 8m (where m is the number of independent variables), and 2) for testing individual predictors, the number of sample size is (N) > 104 + m. Thus, using these two formulas, the sample size of 128 in this study is well above the minimum number required for six main variables; where the minimum number needed is 98 for testing the multiple correlation, and 110 for testing individual predictors. Hair et al. (2006) recommended that 1) the preferred sample size is 15:1 or 20:1, and 2) when maintaining power at .80 in multiple regressions, a minimum sample of 50 and preferably 100 is required for most research situation.

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From a review of the literature on inter-firm TT involving strategic alliance and IJVs, the sample size in terms of completed and usable questionnaires ranges from 78 to 201 cases. For example Lyles and Salk (1996)-78 cases, Lane et al. (2001)-201 cases, Tsang et al. (2004)-89 cases, Pak and Park (2004)-91 cases, Nielsen (2007)-120 cases, Yin and Bao (2006)-136 cases, Lin (2005)-135 cases, Dhanaraj et al. (2004)-140 cases, Simonin (2004)-147 cases, Simonin (1999b)-151 cases, and Simonin (1999a)-147 cases. In the context of IJVs studies in Malaysia, a recent study by Ainuddin et al. (2007) recorded a response of 96 cases.

4.5 Sampling Procedures The IJV companies that participate in this study are selected based on the following four main criteria 1) the IJV companies are from industries where technology is the basis for competitive advantage, 2) the IJV companies are formed more than 2 years and had actively engaged in technology transfer through JVs, 3) the IJV companies whose foreign partners are from the U.S, Europe, Japan, and other Asian countries such as Korea, Taiwan and Singapore (Yin and Bao, 2006), and 4) the foreign firms (parent) have at least 20 percent (%) equity in the JVs (Inkpen, 1995a; Makino and Beamish, 1998).

Based on the number of IJV companies registered with the Registrar of Companies (ROC) as at 1st January 2008, the number of IJV companies operating in Malaysia was 1038. Out of this, 850 IJV companies were considered as active IJVs and 103 IJVs were either dormant or had ceased operation. Since the focus of this study is on inter-firm TT from foreign MNCs to local companies, 85 IJV companies were eliminated from the population frame because only

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IJVs that have operated more than two years and have at least 20 percent of equity are eligible to participate in the survey. Therefore, based on the list provided by ROC which is considered as the most official and original source of information on foreign investment in Malaysia (Thuc Anh et al., 2006), it was finally decided that all IJVs (850) be included in the survey.

Data collection was conducted in the period from July 2008 to December 2008 using a selfadministered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter (Appendix C) addressed to the MDs, CEOs, and GMs which, among others, introduced the researcher and explained the purpose of study. To further convince the respondents to participate in the survey, the researcher enclosed an official letter from the Graduate School of Management (GSM) (Appendix D) together with a self-addressed and stamped envelope. In the cover letter the researcher sought the respondents support to answer and return the questionnaire within the specified return date.

After one month from the posting date the response was not encouraging. By mid July 2008 only 70 responses were received from the respondents. Thus, in order to increase the response rate the researcher followed-up through numerous phone calls, e-mails, reminders via letters and personal visits to seek the respondents cooperation in the survey. After intensive efforts were made for three consecutive months, by mid November 2008 a total of 145 responses (17.05%) were received. Based on literature review, the response rates for mailed questionnaires are usually not encouraging and low (Newman, 2003; Sekaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still considered

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acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001; Norziha, 2004). The percentage of response rate in this study is also consistent with recent studies conducted on Malaysian companies (Foong, 2002; Munir and Alfan, 2003).

During the data collection process, although the respondents were assured of strict confidentiality of their answers, the moderate response rate was mainly due to stringent company policy, busy schedules, fear of revealing information on technology strategy to competitors, and lack of respondents awareness towards academic research. Following the previous international studies on inter firm TT involving IJVs as cited in section 4.4 above and the power analysis conducted by this study, therefore in the Malaysian context the 145 cases (17.05%) received were considered sufficient (mean = 134) to analyze the data. The breakdown of the distribution of questionnaires is shown in Table 4.1 below. Table 4.1: The Response Rate
Particulars Mailed questionnaires No Response Returned blank Replied but unable to participate due to restructuring, company policy, ceased operation, and busy schedules Returned incomplete Returned-completed/usable Total questionnaires received Questionnaires analyzed Frequency 850 705 8 Percentage (%) 100 82.95 0.9

4 5 128 145 128

0.47 0.58 15.05 17.05 15.05

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Based on the sample frame taken from ROCs listing, the studys population is broadly categorized as manufacturing and service industries. This characterization is made due to small and uneven distribution of sample to represent various specific industries. In this study the manufacturing industry which represents 62.5% (80 samples) of the total samples collected, includes chemical (4.9%), engineering (10.2%), steel (3.9%), auto motive (2.3%), metal (8.6%), pharmaceutical (2.3%), wholesale and retail (3.9%), oil and gas (3.9%), timber and paper (3.1%), electrical components (9.3%), computer hardware (7.8%), and food processing (2.3%) industries. For the service industry which represents 37.5% (48 samples) of the total samples collected, the samples were collected from banking and finance (2.3%), utilities (3.1%), telecommunication and mobile (3.9%), information technology (6.3%), education (5.5%), insurance (2.3%), investment and fund (1.5%), tourism (0.8%), transport (2.4%), advertising (3.9%), semiconductor (2.3%), hotel (1.6%) and health and beauty care (1.6%) industries.

In terms of MNCs country of origin, the sample consists of IJVs whose foreign partners are from various part of the world. From the samples collected the Western MNCs which represent 59% (75 samples) of the total samples collected include United States of America (18%), United Kingdom (7.6%), France (8.7%), Germany (7.7%), Australia (6.1%), Switzerland (5.1%), Netherland (3.5%), Italy (1.5%), and Spain (0.8%). For the Asian MNCs, the percentage is 41% (53 samples) of which the samples were collected from IJVs whose foreign partners were Japan (12.1%), Korea (7%), Taiwan (6.4%), Singapore (4.4%), India (3.3%), Hong Kong (3.1%), China (3.2%), and Indonesia (1.5%).

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4.6 Non response Issues The percentage of number of samples collected from the population in this study is relatively low (17.05 %), although this is acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001; Norziha, 2004). From 850 questionnaires distributed to JVs companies only 145 respondents returned the questionnaire, and out of this 128 samples are considered completed and usable. Having a low response rate may cause a problem of non-response bias or self selection bias; where the finding which are based on information from the typically small percentage of early responders are likely to be skewed and misleading (Wilson, 1999).

Churchill (1995) reasons that while researchers cannot know for sure the differences between respondent and non-respondents, study after study have indicated that the assumption that those who did not respond were in fact equal to those who did (p.662). Other researchers for example Miller and Smith (1983) thoroughly discussed the non response issues and strongly suggested five practical strategies in handling non response issues in mail questionnaires for example 1) to ignore non respondents completely; where the researchers are most likely to face the risk of limiting the generalizability of their results, 2) to compare respondents to populations, 3) to compare respondents to non respondents, 4) to compare early to late respondents, and 5) to double-dip non respondents.

Miller and Smith (1983) cited Clausen and Ford (1947), Flanagan et al. (1964), Goldhor (1974) and Newman (1962) as authorities to support their arguments when comparing the early and late respondents. On the other hand, a different opinion by Tanner (1999) which is not favorable to the previous researchers, suggests that non response bias in marketing

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research due to low response rate (< 15%) must be tolerated because 1) response bias is hard to substantiate, and 2) such results can still contribute to the knowledge base.

Therefore, in order to eliminate and mitigate the non response bias in the studys findings, this study follows Miller and Smiths (1983) suggestion that is to compare the difference between early respondents and late respondents to justify generalizing from the respondents to the sample (pg. 48). Using information on MNCs size, age of joint venture, MNCs country of origin and MNCs types of industry, a t- test analysis is conducted to test the differences, with the late respondents assumed to be similar to non-respondents (Oppenheim, 1966). Upon conducting the t-test, the results reveal that there is no difference in the responses on local firms performance (LFP) and degree of technology transfer (TTDEG) provided by the first 40 early respondents and the 40 late respondents.

From the t-test results it can be reasonably concluded that non-response bias was not detected in this study. Table 4.1 below describes the means, standard deviations, standard errors and significant levels between the respondents and non respondents in the study. The significance 2-tailed results indicate that there is no significant difference between the early respondents and late respondent suggesting that non-response bias does not exist and all the p values are above 0.5 levels (p > 0.5).

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Table 4.2: Results of T-test in Determining Differences between the Respondent and Non Respondents
Categorical Variables MNCSIZE Test Variable LFP TTDEG JVAGE LFP TTDEG MNCCOO LFP TTDEG MNCIND LFP TTDEG Questionnaire Received Respondent Nonrespondent Respondent Nonrespondent Respondent Nonrespondent Respondent Nonrespondent Respondent Nonrespondent Respondent Nonrespondent Respondent Nonrespondent Respondent Nonrespondent N Mean Std Deviation 1.386 1.453 1.389 1.492 1.607 1.359 1.533 1.872 1.468 1.517 1.668 1.705 1.572 1.691 1.600 1.678 Std Error Mean 0.253 0.352 0.271 0.396 0.205 0.312 0.243 0.377 0.301 0.211 0.357 0.219 0.353 0.214 0.314 0.295 Sig (2tailed) n.sig n.sig n.sig n.sig n.sig n.sig n.sig n.sig

40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40

5.638 5.451 6.482 6.103 5.967 6.107 5.748 5.611 5.962 6.155 6.032 5.984 6.253 6.037 5.557 5.673

4.7 Sampling Type The selection of the sample is based on census sampling technique where the data is gathered from all the identified members/elements in the final population sample frame of 850 active JVs companies registered with ROC. In this study, the census sampling is employed as it provides an advantage by 1) eliminating the possibility that by chance a randomly selected sample may not be adequate representative of the sample, 2) gathering detailed information on the sub-groups in the population, and 3) reducing sampling variability attributed to statistic as it is calculated using data from all elements/JV companies in the population (Black, 2001). Thus, census sampling method reduces the risk of omitting or missing out any elements/JVs companies in the population as compared to random sampling method; where 171

the possibility to omit or miss out the elements/JVs companies is higher (Sekaran, 2003). Based on the sample frame the studys population is broadly categorized as manufacturing and service industries.

4.8 Questionnaire Design and Instrumentation The main research instrument in this study is the questionnaire. Building on the previous studies on KT and TT, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm technology transfer. The questionnaire, as per Appendix E, is divided into three sections. In the first section, nineteen (19) items are included inquiring about the demographic information of the JV companies such as size, age of JV, country of origin, types of industry, type of ownership, equity split, and business activities. The second section consists of sixty seven (67) items measuring the constructs of TTCHARS: KCHAR, TRCHAR, TSCHAR, RCHAR, and TTDEG. The third section of the questionnaire consists of eight (8) items measuring LFP. Except for TTDEG, all the variables are measured using ten-point Likert Scale (1 = strongly disagree to 10 = strongly agree). For TTDEG, this variable is measured using ten-point Likert Scale (1 = very low transfer to 10 = substantial transfer). The ten-point Likert Scale is selected because 1) the wider distribution of scores around the mean provides more discriminating power, 2) it is easy to establish covariance between two variables with greater dispersion around their means, 3) it has been well established in academic and industry research, and 4) from a model development perspective, a ten-point scale is more preferred (Allen and Rao, 2000). This study also adopts items from the previous studies to measure moderating variables of MNCSIZE, JVAGE, MNCCOO, and MNCIND. 172

4.9 Validity and Measurement of Variables The central issue of validity focuses on whether the measure or scale used measures the right concept and whether the scale measures what it is intended to measure (Zikmund, 2003). Validity refers to the extent to which an empirical measure adequately reflects the real meaning of the concept under consideration (Barbie, 2007). Validity reflects the extent to which a scale or a set of scales correctly represents the studys concept i.e. the extent to which the measure is free from any systematic or non-random error. However, accuracy does not ensure validity (Zikmund, 2003). There are possibilities that the scales used could have defined what is to be measured but still have an invalid measure of the concept when the supposed appropriate questions in the scale are not being asked (Zikmund, 2003). Among the commonly used methods in measuring the validity of scales/validation procedures are: 1) content validity, 2) criterion-related validity, and 3) construct validity (Hair et al., 1998; Sekaran, 2003). Content validity of the scales used in this study is established by their origin from previous literatures. The scales are deemed to be validated since this study has fully adopted with modification the established scales in the literature which have been developed by well known researchers (experts) in the studys field (Sekaran, 2003). To ensure the validity of the scales used, the variables in this study are measured by multi-item scales adopted from well established studies on intra and inter-firm technology and knowledge transfer. The variables to be measured are TTDEG, TCT, COMPLX, SPEC, ACAP, RCOL, PPROTEC, TRANSCAP, RELQLTY, MT, LFP, MNCSIZE, JVAGE, MNCCOO, and MNCIND. The breakdown of the sections, descriptions and sources of the instruments are summarized in Table 4.2 below.

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Table 4.3: The Constructs and Sources of the Scale


Section Description No. of Items Source

1.

Demographic Profile Size, age of JV, country of origin, types of industry, type of ownership, equity split, and business activities. Knowledge Characteristics Tacitness Complexity Specificity

19

Developed by the researcher.

2.

8 5 3

Kogut and Zander (1993); Simonin (1999a, 2004); Pak and Park (2004). Simonin (1999a, 2004); Kogut and Zander (1992, 1993). Simonin (1999a); Pak and Park (2004).

Technology Recipient Characteristics Absorptive Capacity Recipient Collaborativeness

8 5

Lyles and Salk (1996); Simonin (1999a); Pak and Park (2004); Lane et al. (2001). Yin and Bao (2006); Thuc Anh et al. (2006).

Technology Supplier Characteristics Partner Protectiveness Transfer Capacity

4 4

Simonin (1999a); Hau and Evangelista (2007). Lyles et al. (1999); Hau and Evangelista (2007); Minbaeva (2007).

Relationship Characteristics Relationship Quality Mutual Trust Degree of Technology Transfer Degree of Tacit Knowledge Transfer

11 11

Lin (2005); Cavusgil et al. (2003); Chua (2002); Fryxell et al. (2002). Dhanaraj et al. (2004); Kale et al. (2000).

Degree of Explicit Knowledge Transfer

Lyles and Salk (2001); Tsang et (2007). Lyles and Salk (2001); Tsang et (2007).

(1996); Lane et al. al. (2004); Minbaeva (1996); Lane et al. al. (2004); Minbaeva

3.

Local Firm Performance Corporate Performance

Human Resource Performance

Lyles and Salk (1996); Lane et al. (2001); Tsang et al. (2004); Yin and Bao (2006). Lyles and Salk (1996); Lane et al. (2001); Tsang et al. (2004); Yin and Bao (2006).

Total

94

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4.9.1 Degree of Technology Transfer (TTDEG) Following Lyles and Salk (1996), Lane et al. (2001), Gupta and Govindarajan (2000), Dhanaraj et al. (2004), Pak and Park (2004), Yin and Boa (2006) and Minbaeva (2007), this study adopts a multi-dimensional operationalization approach in measuring this construct. This study operationalizes TTDEG as the transfer of technological knowledge from two dimensions: 1) tacit knowledge (TCTK) in terms of new product/service development, managerial systems and practice, process designs and new marketing expertise, and 2) explicit knowledge (EXPK) in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how. The respondents are asked to evaluate TTDEG from MNCs to local firms in terms of tacit and explicit dimensions of technological knowledge.

4.9.2. Tacitness (TCT) This study measures TCT in terms of its two constructs: codifiability and teachability (Kogut and Zander, 1993; Simonin, 1999a, 1999b, 2004). For codifiability, multi-item scales are designed to capture the extent to which the technology has been articulated in documents. Two (2) items are adopted from Kogut and Zander (1993) and modified accordingly to suit the context of this study which includes statements as to whether 1) the foreign JV partners manual describing the technology can be written, and 2) large parts of the foreign JV partners technology are embodied in standard software. Two (2) items are adopted from Simonin (1999a, 1999b, 2004) which include statements whether 1) the foreign JV partners technology is easily codified, and 2) the foreign JV partners technology is more explicit than tacit. One (1) item is adopted from Pak and Park (2004) inquiring whether the partners

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technology is hard to verbally transfer. For teachability, the scales are designed to capture the ease by which technology can be learned by the local JV partner. Three (3) items are adapted from Kogut and Zander (1993) and modified accordingly to suit the context of the study which include statements whether 1) the local JV firms personnel can easily learn the technology by communicating with the foreign JV partners skilled personnel, 2) the local JV local firms personnel can easily learn the technology by studying a complete set of blueprints, and 3) educating and training the JV local firms personnel is a quick and easy process.

4.9.3 Complexity (COMPLX) Following Simonin (1999a, 1999b, 2004) and Kogut and Zander (1992, 1993), this study adopts a five (5) items scale in measuring COMPLX which include statements whether the JV partners technology is the product of many interdependent techniques, routines, individuals, resources, and processes.

4.9.4 Specificity (SPEC) To capture SPEC this study adopts a two (2) items scale from Simonin (1999a, 1999b) in terms of whether 1) the foreign JV partner has invested significantly in specialized equipment and facilities in developing their technology, and 2) the foreign JV partner has invested significantly in skilled human resources in developing their technology. Following Pak and Park (2004), this study also adopts one (1) item scale which includes a statement on whether the technology is difficult to access from the other company.

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4.9.5 Absorptive Capacity (ACAP) Building on Lane et al. (2001), this study captures ACAPs critical elements of ability to understand, assimilate and apply new external knowledge. In capturing these critical elements, this study adopts a multi-item scale previously used by the researchers (Lyles and Salk, 1996; Simonin, 1999a; Pak and Park, 2004) to measure the constructs using seven (7) items with respect to statements on the academic background, technical capacity, educational programs, financial support for new ideas, overseas training opportunities, and commitment in terms of personnel and resources (physical, financial, and logistic) to JV. Following Cohen and Levinthal (1990) and Lane et al. (2001), this study also includes one (1) item to assess the local firms ability to understand, assimilate and apply new technology transferred by the foreign parent firm.

4.9.6 Recipient Collaborativeness (RCOL) This study measures RCOL in terms of the local partner firms learning intent and their collaborative attitudes by using a five (5) items scale in terms of 1) the local partners learning objective, 2) the local partners desire, determination and will to learn from foreign partner, 3) the technology-recipients willingness to allow foreign partner to inspect and monitor the use of knowledge acquired from JV, 4) the local partners commitment not to compete directly with the foreign partner in the future, and 5) the local partners commitment in sharing with the foreign partner the benefits of the critical knowledge acquired from the JV (Yin and Bao, 2006; Thuc Anh et al., 2006; Hamel, 1991; Simonin, 2004).

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4.9.7 Partner Protectiveness (PPROTEC) The measure of PPROTEC is adopted from Simonin (1999a, 1999b and 2004). In measuring this construct, this study adopts a two (2) items scale which includes statements whether 1) the foreign JV partner has intentional procedures, routine and policies to restrict the sharing of relevant information concerning its technology know-how, and 2) the foreign JV partner is very protective of its technology know-how (Simonin, 1999a). This study also adopts two (2) newly developed items by Hau and Evangelista (2007) namely 1) the restrictive policy of the foreign partner with respect to knowledge spillovers to the other partner; and 2) the unwillingness of the foreign expatriates to share technological expertise with the local firms personnel.

4.9.8 Transfer Capacity (TRANSCAP) In operationalizing the ability of foreign JVs partner to articulate, communicate and transfer technology to local firms, this study employs a four (4) items scale which consists of two (2) items adopted from Lyles et al. (1999), and two (2) items from Hau and Evangelista (2007). The respondents are asked to indicate whether 1) the foreign JV partner has provided the local partner with materials on procedures and guidelines for technology planning and decision making, 2) the foreign JV partner has offered formal training programs such as seminars and lectures to the local firms personnel (Lyles et al., 1999), 3) the training programs provided by the foreign JV partner have been very helpful to the local firms personnel, and 4) there have been many foreign JV partner personnel working in the JV firm (Hau and Evangelista, 2007).

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4.9.9 Relationship Quality (RELQLTY) This study operationalizes RELQLTY in terms of relationship informality, openness and communication density which increases the exchange of information, technology and knowledge between partners (Gupta, 1987; Gupta and Govindarajan, 2000; Lin, 2005). To capture this construct, this study employs a four (4) items scale developed by Lin (2005) in which the items are designed to capture 1) the local JV partner efforts in maintaining frequent interaction with the foreign JV partner, 2) the adequacy of the interaction, 3) the local JV partner effort in maintaining an amiable climate for the interaction, and 4) the local JV partners effort in ensuring that interaction is on a constructive mode.

As RELQLTY (informality, openness and communication density) is explained by the relationship strength, this study adopts a seven (7) items scale adopted from Cavusgil et al. (2003), Chua (2002), and Fryxell et al. (2002). RELQLTY is measured in terms of 1) the desire to maintain a good social relationship by the foreign and local JV partners, 2) the foreign and local JV partners can freely talk to each other about difficulties (in general) they encounter with the JV and they know that their concern will be addressed, 3) the foreign and local JV partners are confident in each others capabilities, 4) the foreign and local JV partners are free to share their ideas, feelings and hope with each other, 5) the foreign and local JV partners are supportive of each other and they respond constructively and caringly to their partners concern about the JV, 6) the foreign and local JV partners share a sense of togetherness, and 7) the foreign and local JV partners share organizational myths and stories with each other.

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4.9.10 Mutual Trust (MT) This study employs a six (6) items scale developed by Dhanaraj et al. (2004) and five (5) item scales from Kale et al. (2000) to measure MT between JV partners which include statements whether 1) the JV partners can understand each other well and quickly, 2) the JV partners have the feeling of being mislead, 3) the JV partners make damaging demands, 4) the stronger JV partner pursues its interest at all costs, 5) the informal agreement is perceived to be as significant as the formal agreement, and 6) the JV partners take advantage of the weakness of the other party (Dhanaraj et al. , 2004). In addition, five (5) more items are adopted from Kale et al. (2000) with respect to statements whether the JV is characterized by close interaction, mutual respect, mutual trust, personal friendship, and reciprocity between the JV partners at multiple levels.

4.9.11 Local Firms Performance (LFP) This study operationalizes LFP from two dimensions of performances: 1) corporate performance (CPERF), and 2) human resource (competencies) performance (HRPERF). Based on literature review, the qualitative (objective) measures of companies performance are the most practical and ideal measurement of performance. However, the concrete financial figures are neither available nor reliable (Lyles and Barden, 2000; Tsang et al., 2004). Past studies have shown a positive relationship between objective and perceptual (subjective) measures of firms performance (Lyles and Salk, 1996; Dess and Robinson, 1984; Geringer and Hebert, 1989, 1991). Thus, this study applies subjective measures to measure LFP based on IJVs top management assessments using multi-dimensional performance indicators. The CPERF, as the first dimension of LFP, is measured by a four

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(4) items scale measuring business volume, market share, planned goals and profits. For HRPERF, as the second dimension of LFP, four (4) items are used to measure product/service quality, employees productivity, managerial techniques/skills and

operational efficiency (Tsang et al., 2004; Yin and Bao, 2006; Lane et al., 2001; Lyles and Salk, 1996).

4.9.12 Size of MNCs (MNCSIZE) Following the previous studies (Simonin, 1999a; Tsang et al., 2004; Dhanaraj et al., 2004), MNCSIZE is measured by the total employees of the foreign JV partner based on items coded: 0 = large MNCs (employees > 1000) and 1 = medium/small MNCs (employees < 1000) (Yin and Bao, 2006).

4.9.13 Age of Joint Venture (JVAGE) In measuring JVAGE, this study requires the respondents to indicate the JVs number of years in operation based on items coded: 0 = old joint ventures (number of years in operation > 10 years) and 1 = young joint ventures (number of years in operation < 10 years) (Tsang et al., 2004; Lin, 2005; Simonin, 1999a; Luo, 2001).

4.9.14 MNCs Country of Origin (MNCCOO) Following Yin and Bao (2006), Mowery et al. (1996) and Kale et al. (2000), this study measures MNCCOO based on items coded: 0 = Western MNCs (United States and European countries) and 1 = Asian MNCs (Japan and other Asian countries).

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4.9.15 MNCs Types of Industry (MNCIND) Following Gupta and Govindarajan (2000) and Minbaeva et al. (2003), this study categorizes two major industries based on items coded: 0 = manufacturing industry and 1 = service industry.

4.10 Pilot Study The pilot study was conducted to pre-test the questionnaire. The pre-test of questionnaire is crucial to ensure that the respondents understand the questions, to avoid ambiguity of questions, and to ensure no problems exist with respect to the wordings or measurements (Sekaran, 2003). The response from the pilot study will enable early rectification or adjustment be made to the questionnaire before distributing it to a larger sample. Based on the population of sample frame, 100 IJVs companies were invited to participate in the pilot test of which 30 had positively responded. The pre-testing of the questionnaires was personally administrated on the respondents. The respondents were selected based on a convenient sample and considered as representing the true population of the sample frame. From the feedbacks gathered during the pilot study, the researcher received few constructive comments on the phrasing, clarity and sequence of the questions, length of questions, and the need to add and eliminate some of the questions designed. Explanations and clarifications to the questions raised by the respondents were made by the researcher to ensure the terms used in the questionnaire were well understood so as to avoid the statements from being misinterpreted. As a result, based on the suggestions and comments received, prior to the

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actual test the researcher was able to further refine, improve and strengthen the scales in the questionnaires.

4.11 Reliability Before this study attempts to examine the relationships between all TTCHARS and TTDEG, and the relationship between TTDEG and LFP, the degree of reliability of every instrument utilized need to be first assessed. In general, reliability is broadly defined as the degree to which measures are free from error and yield consistent results (Peter, 1979). The critical issue of reliability is the internal consistency of the scale used. The internal consistency of scales indicates the homogeneity of the items in the measure that tap the construct where the items in the scale must hang together as a set (Sekaran, 2003). The reliability of a measure indicates the extent to which the measure is without bias (error free) and a consistent measurement has been used across time and across various items in the instruments (Sekaran, 2003). Thus, reliability of a measure is an indicator of the stability and consistency to ensure the instruments used measure the right concept and is crucial in assessing the goodness of a measure (Sekaran, 2003). To put it differently, reliability is the degree to which the observed variables or the multiple indicators for a latent variable belong together and measure the true value and are error free.

Hair et al. (1998) argue that should the same measure is being asked repeatedly; the measures will show greater consistency and will be more reliable. Cronbachs alpha is a common method used to assess the internal consistency of reliability of a measure (Nunnally, 1978). The accepted rule of thumb is that the indicators should have a Cronbachs alpha coefficient

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of at least 0.7 (Hair et al., 1998; Pallant, 2001). However, Briggs and Cheek (1986) recommend an optimal range for inter-item correlation of 0.2 to 0.4. Using the SPSS version 15.0, the internal consistency and reliability of the scales used are analyzed and details of the analysis (Appendix F) are as shown in Table 4.3 below. Table 4.4: The Results of Cronbach Alpha Tests
Variables Tacitness Complexity Specificity Absorptive Capacity Recipient Collaborativeness Partner Protectiveness Transfer Capacity Relationship Quality Mutual Trust Tacit Knowledge Degree Explicit Knowledge Degree Corporate Performance Human Resource Performance Number of scales/items 8 5 3 8 5 4 4 11 11 4 4 4 4 Cronbach Alpha Pre-Test .758 .930 .776 .940 .924 .842 .928 .963 .889 .969 .987 .926 .973 Actual Test .862 .839 .720 .934 .898 .806 .865 .957 .938 .963 .972 .933 .946 Literature .72 (Simonin, 1999) .74 (Pak and Park, 2004) .87 (Pak and Park, 2004) .81 (Simonin, 1999) & .83 (Pak and Park, 2004) .71 (Yin and Boa, 2006) .77 (Simonin, 1999) .66 (Minbaeva, 2007) .93 (Lin, 2005) .93 (Dhanaraj et al., 2004) .92 (Hau and Evangelista, 2007) & .87 (Yin and Bao, 2006) .90 (Hau and Evangelista, 2007) .82 (Lyles and Salk, 1996) .66 (Lyles and Salk, 1996)

In this study the Cronbach alpha ranges from .720 to .972. Thus, when compared to the pilot tests result, the results indicate that 1) the scales used are consistent, 2) the results for both tests are quite similar, and 3) the scales reliability is well above the acceptable rule of thumb of .70. This indicates that the scales used in this study, which have been adopted from 184

previous established studies, are highly reliable. Table 4.3 also reveals information that the overall Cronbach alpha results for the present study is also well above the literatures results.

4.12 Data Collection Methods This study employs two methods of data collection, namely primary and secondary data collection. The primary data utilizes data gathered from a structured questionnaire distributed to all JV companies registered with the Registrar of Companies, Malaysia (ROC); specifically the JV companies formed between foreign MNCs and local companies. For the secondary data, this study gathered its data on TT, especially during the initial observation stage process, from reviews of journals, articles, books and other printed sources generated from various secondary data sources such as online data bases of various universities, faculties, and libraries.

The primary data in this study was gathered from the structured questionnaires which were distributed to the identified respondents in the JVs highest level of management particularly the chief executive officers (CEOs) and general managers (GMs) who are responsible for the operations, productions, marketing, sales, and human resource. In addition, the respondents were chosen due to their vast knowledge on the JVs, involvement in the daily operation and decision making in the JVs, and in-depth background of knowledge and information with respect to the JVs operation, management systems and strategies, and their JVs partner (Ainuddin et al., 2007; Tsang et al., 2004). The questionnaires were distributed to JV companies operating in Wilayah Persekutuan, Selangor, Penang, Perak, Melaka, Johor and

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East Malaysia through mail questionnaires. A self-administered questionnaire is considered as the most effective method as 1) it covers wider geographical areas and is cost effective (Sekaran, 2003, Salkind, 2003), and 2) it provides more reliable results and prevent interviewer bias (Cohen and Manion, 1994).

4.13 Data Analysis Procedures Prior to analyzing the data, this study conducted exploratory data analysis (EDA) on the main variables to ensure that the data collected met the preliminary assumptions of normality, homogeneity of variance, and linearity. Since the data collected in the study is interval data, except for the categorical data which is meant for descriptive analysis on the organization profile, this study relies on the parametric test in most of the analyses. The preliminary tests conducted were 1) the hypothesis testing for the normality (Kolmogorov-Smirnov statistic) with the normal probability plots (Q-Q plots) for all the variables, 2) the Levenes test of homogeneity of variances, 3) the graphical observations on the result of histograms, spread vs. level plots, box plots, stem and leaf diagrams, and 4) the collinearity test. For all the statistical tests, an alpha () of .05 is set to reject the null hypotheses. Thus, the data are assumed to be normally distributed when it fails to reject the hypotheses in both the normality (Kolmogorov-Smirnov statistic) and Levenes tests.

4.13.1 Data Screening and Cleaning During this process the researcher attempts to ensure that no error or mistake is committed when entering the data. The data were carefully entered, checked and re-checked to avoid

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distortions in the regressions analysis results. As part of the preliminary data analysis and to get a feel of the data, the frequency distribution for the demographic variables, the mean, the standard deviation, and range on both the dependent and independent variables together with inter-correlation matrix of the variables were analyzed (Sekaran, 2003).

4.13.2 Descriptive Analysis Descriptive analysis was conducted on the categorical variables namely MNCSIZE, JVAGE, MNCCOO, and MNCIND using the frequencies and descriptive procedures in the SPSS. Other general observations were made on the categorical variables such as the types of industries, respondents job tenure, JV size, age of JVs, and foreign equity ownership. For the continuous variables the means, standard deviations and range were analyzed (Appendix G).

4.13.3 Correlation Analysis The correlation analysis was conducted in two stages. In the first stage, a correlation analysis was conducted between the groups of independent variables; KCHAR, TRCHAR, TSCHAR, RCAHAR and TTDEG. In the second stage, a correlation analysis was performed to examine the correlation between all the sub-variables (dimensions) of TTCHARS and TTDEG. In both stages, the correlation analyses were conducted using the Pearsons Product Moment Correlation (r). This analysis was conducted to establish the direction and strength of the relationships between all TTCHARS and their dimensions, and TTDEG and its dimensions. The range in value is between -1.00 to + 1.00. If there is no relationship at all, the correlation will indicate 0. A correlation of 1.00 indicates a perfect positive correlation and a correlation

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of -1.00 indicates a perfect negative correlation (Cohen, 1988). This study follows Cohens (1997) rule of thumb in interpreting the correlation coefficient as follows: Small correlation Medium correlation Large correlation -0.10 to -0.29 and +0.10 to +0.29 -0.30 to -0.49 and +0.30 to +0.49 -0.50 to -1.00 and +0.50 to +1.00

4.13.4 Multiple Regressions Analysis Since the studys conceptual framework in Chapter 3 proposes an integrated model which describes linear relationships between all TTCHARS and their dimensions and TTDEG, this study conducted a multiple regression analysis to explore and predict an objects value on a criterion variable, given its value on one independent variable. Other than determining the relationships, this analysis explores the possibility whether all TTCHARS and their dimensions (sub-variables) in this study are significant predictors of TTDEG. Thus, the multiple regression analysis 1) explains the relationships, and 2) assesses the degree of accuracy of description or prediction achieved by the regressions equation using a mathematical equation. The multiple linear regression model for this study is mathematically described as follows: Equation 4.1: Y = 0 + 1 (X1) + 2 (X2) + 3 (X3) + 4 (X4) +
Where, Y = TTDEG (The Dependent Variable), X1 = KCHAR (The Independent Variable), X2 = TRCHAR (The Independent Variable), X3 = TSCHAR (The Independent Variable), X4 = RCHAR (The Independent Variable), 0 = Constant (Intercept), 1-4 = Estimates (Regression coefficient), and = The error term.

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4.13.5 Inferential Analysis As indicated in the conceptual framework in Chapter 3, this study employs four moderating variables: MNCSIZE, JVAGE, MNCCOO, and MNCIND to test their moderating effects on TTCHARS-TTDEG relationship. Moderating variables play an important role in social science research and practice as the researchers are interested 1) to determine whether a causal law is general, 2) to improve the fit of their models, 3) to provide information on the boundary conditions for the relationship of interest in order to advance a theory, and 4) to reduce errors in prediction of their research models (Aguinis, 2004). The primary objective of a moderating variable is to explain changes in the nature of the X to Y effect and to explain when or under what conditions X causes Y (Aguinis, 2004; Frone, 1999).

Thus, using inferential analysis this study attempts to examine/test whether MNC SIZE (large vs. medium/small MNCs), JVAGE (old vs. young JVs), MNCCOO (Western vs. Asian MNCs), and MNCIND (manufacturing-based industry vs. service-based industry) provide any moderating effects in TTCHARS-TTDEG relationship. All the moderating variables consist of two categories or levels (binary). The moderated multiple regression (MMR) analysis is described as an inferential procedure which consists of comparing two different least-squares regression equations (Aguinis, 2004; Aiken and West, 1991; Cohen and Cohen, 1983; Jaccard et al., 1990). By conducting MMR analysis the researchers, who in general do not have access to the entire population of true scores, can form inferences as to whether a moderating effect is present in the population based on sample data (Aguinis, 2004).

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Using the MMR procedure this study tested the effect of moderating variables in the TTCHARS-TTDEG relationship by comparing the ordinary least-squares (OLS) model and MMR model. Thus, the OLS model is mathematically described as follows: Equation 4.2: Y = 0 + 1X+ 2Z +
Where, Y = Degree of Technology Transfer (The Dependent Variable), X = Technology Transfer Characteristics, Z = A hypothesized binary grouping moderator, 0 = The intercept of the line-of -best-of-fit represents the value of Y when X = 0, 1 = The least-squares estimate of the population regression coefficient for X, 2 = The least-squares estimate of the population regression coefficient for Z, and = The error term.

In this equation the regression coefficient 1 is defined as the number of units that Y is predicted to increase with a 1-unit increase in X given that Z is held constant (Aguinis, 2004). The OLS model as illustrated in equation 4.2 is compared with the MMR model. The MMR model is formed with the inclusion of the product between the predictors (X*Z) as a third term in the regression to ascertain whether the presence of product term improves the fit of the model predicting Y. Thus, the MMR model is mathematically described as follows: Equation 4.3: Y = 0 + 1X+ 2Z + 3X*Z +
Where, Y X Z = Degree of Technology Transfer (The Dependent Variable), = Technology Transfer Characteristics, = A hypothesized binary grouping moderator,

X*Z = The product between the predictors,

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0 1 2 3

= The intercept of the line-of-best-of-fit which represents the value of Y when X = 0, = The least-squares estimate of the population regression coefficient for X, = The least-squares estimate of the population regression coefficient for Z, = The sample-base least-squares estimates of the population regression coefficient for the product term, and = The error term.

Central to the MMR analysis is the change between the coefficients of determination i.e. the squared multiple correlation coefficients (R) in equation 4.2 (OLS model) and equation 4.3 (MMR model). The change of R, as the proportion of variance explained, is important in assessing whether the inclusion of the product term (X*Z) in the regression equation 4.3 improves the proportion of explained variance in Y. In other words whether the inclusion of moderating variable Z helps the prediction of Y above and beyond the first-order effects (the main model) of X and Z (Aguinis, 2004).

Prior to MMR analysis, the population data was examined to avoid the occurrence of 1) Type 1 error; which is the error of rejecting the true null hypotheses at a specified , and 2) Type 2 error (); which is the error of failing to reject a false null hypotheses at a specified power (Aguinis, 2004). The possibility of committing both errors was carefully considered and balanced in a manner consistent with the substantive issues of the research.

4.13.6 Testing Goodness of Data Both reliability and validity of the scales/measures used in this study were analyzed to determine the goodness of data. As indicated in section 4.9 and 4.11 above the reliability and validity of each scale/measure were assessed to determine how well the items in a set are positively correlated to each other (Sekaran, 2003). To ensure the Cronbachs alpha 191

coefficients have satisfied Nunallys (1978) rule of thumb, every dimension of each scale/measure was checked and tested. Upon screening, cleaning and establishing the reliability and validity of the measures, the hypotheses were tested. For this study to answer the four research objectives, four research questions and ten main hypotheses, the following statistical analyses were individually employed.

Research Objective 1 This objective was achieved through the correlation analysis by evaluating the direction and size of the value of the Pearsons Product Moment Correlation Coefficient (r) of 1) the relationship between every group of TTCHARS (KCHAR, TRCHAR, TSCHAR, and RCHAR) and TTDEG and its dimensions (TCTK and EXPK), and 2) the relationship between every sub-variable (dimensions) of TTCHARS (TCT, COMPLX, SPEC, ACAP, RCOL, PPROTEC, TRANSCAP, RELQLTY, and MT) and TTDEG and its dimensions. The hypotheses tested were H1, H1a, H1b, H1c, H1d, H1e, H2, H2a, H2b, H2c, H2d, H3, H3a, H3b, H3c, H3d, H4, H4a, H4b, H4c, and H4d. Thus, the results of the correlation analysis had answered research questions 1 of the study.

Research Objective 2 The objective was achieved through the multiple regression analysis by assessing 1) how much of the variance in TTDEG is explained by all the variables (group and sub-variables of TTCHARS) in the studys models, 2) whether all TTCHARS and their dimensions (subvariables) made a strong unique contribution to explain TTDEG, and 3) whether all TTCHARS and their sub-variables (dimensions) made a statistically unique contribution to

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the models equation. This is done by evaluating from the regressions outputs: 1) the R Squared (R) value in the summary tables, 2) the corresponding p-value of the model (p = .0001) in the ANOVA table, and 3) the beta coefficients (standardized) and the corresponding significant value (p < .05) in the coefficients table. Hypotheses H5 and H5a were tested and the results of the regression analysis answered research question 2 of the study.

Research Objective 3 The objective was achieved through the correlation analysis by evaluating the direction and size of the value of the Pearsons Product Moment Correlation Coefficient (r) of 1) the relationship between TTDEG and LFP, and 2) the relationships between TTDEG and LFPs dimensions (TCTK and EXPK). The hypotheses tested were H6, H6a, and H6b. The results of the correlation analysis answered research question 3 of the study.

Research Objective 4 The objective was achieved through a linear moderated multiple regression (MMR) test with higher-order interaction effect method by evaluating from the regressions outputs: 1) the change of the R Squared (R), 2) the corresponding F significance value (p = .0001) in the Model Summary Table, and 3) the beta coefficients (unstandardized) and the corresponding significant value of product term (p = .0001) in the Coefficients Table. The hypotheses tested were H7, H8, H9, and, H10. Thus, the results of the MMR analysis answered research question 4 of the study.

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Table 4.4 below presents the summary of the research questions, hypotheses, types of scale, and statistical tests used. Table 4.5: Summary of the Research Questions, Hypotheses, Types of Scale, and Statistical Tests Used
Research Question RQ1 Hypotheses H1, H1a, H1b, H1c, H1d, H1e, H2, H2a, H2b, H2c, H2d, H3, H3a, H3b, H3c, H3d, H4, H4a, H4b, H4c, and H4d. Types of Scale Interval Interval Interval Interval RQ2 RQ3 RQ4 H5 and H5a H6, H6a and H6b. H7, H8, H9, and H10. Interval Interval Interval Statistical Tests Used Pearson Product-Moment Correlation Coefficient Pearson Product-Moment Correlation Coefficient Pearson Product-Moment Correlation Coefficient Pearson Product-Moment Correlation Coefficient Multiple Linear Regressions Pearson Product-Moment Correlation Coefficient High-order interaction effect of Moderated Multiple Regressions

4.14 Exploratory Data Analysis - Test of Normality Before proceeding with the studys analyses, the researcher explores the data in order to ensure that the data are normal and all the normality assumptions have been met. This is done to avoid the occurrence of multicollinearity problem; when independent variables are highly correlated with each other (r > .9 or greater) instead of highly correlated with the dependent variable (Pallant, 2001). For any multivariate model, it is intended that the independent variables to be highly correlated with the dependent variable since highly correlated independent variables will reduce the predictive power of any individual independent variable (Tabachnick and Fidell, 1996). As a rule of thumb, .70 is an acceptable threshold level; whereas .80 signals a possible multicollinearity problem (Cohen, 1988). Thus, the

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existence of multicollinearity problems reduces the unique significant contribution of each independent variable in the variance of the dependent variable.

By conducting the linear regression procedure, the possibility of multicollinearity problems was checked by examining the values of 1) Tolerance (T), which is the amount of variability of the selected independent variable not explained by the other independent variables, and 2) Variance Inflation Factor (VIF), which is a measure of the effect of other predictor variables on a regression coefficient. As a rule of thumb, the presence of multicollinearity problem or high correlation among independent variables is detected when 1) the T value is lower than the threshold level of .10 (T < .10), and 2) the VIF value exceeds the threshold level of 10.0 (VIF > 10.0) (Tabachnick and Fidell, 1996).

To satisfy the assumption of normality, where the samples are assumed to be normally distributed with equality of variance, this study conducted 1) the Kolmogorov-Smirnov statistic of normality test, 2) the Levenes test of homogeneity of variance, 3) the descriptive statistics procedure to evaluate the Skewness and Kurtosis of the distribution of scores of the continuous variables, 4) the graphical examination of histogram, spread vs. level plots, stemand-leaf plot, box plot, normal probability plot, and detrended normal plot, and 5) the collinearity test. Thus, as a first step the frequencies and descriptive procedures were conducted to verify the accuracy of the data collected and the alpha level was set at .05 for all the statistical tests.

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4.14.1 The Kolmogorov-Smirnov Statistic of Normality Test Prior to conducting the multivariate analysis and as part of the exploratory data analysis (EDA), this test was conducted to examine whether the data came from a normally distributed population. This was done by testing the following hypothesis: H0: The groups or samples came from a normally distributed population. As a rule of thumb, if the significant value of the Kolmogorov-Smirnov statistic indicates p > .05 then the H0 (the null hypotheses) is not rejected. Thus, when a not significant result is obtained the groups/samples are assumed to have equal variances or are normally distributed (Pallant, 2001). The Kolmogorov-Smirnov statistic with a Lilliefors significance level for testing normality was conducted and the result as shown in Table 4.5 below indicates that the distribution or the spread of the data are normal for all the three main variables under study; where all the values of p are not significant (p > .05). Similarly, upon examining the Normal Q-Q and Detrended Normal plots for the three constructs, the distributions of the points are closely aligned in straight lines implying linear association thus indicating the normal spread of data. Table 4.6: The Kolmogorov-Smirnov Statistics of Normality Test
Variables Degree of Technology Transfer Technology Transfer Characteristics Local Firms Performance Statistic .075 .071 .063 Sig- (p-value) .076 .200 .200*

Independent variables
a. Lilliefors Significance Correction

Dependent Variables;
N: (128)

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4.14.2 The Levenes Test of Homogeneity of Variance The objective of this test is to examine whether the groups/samples came from a normally distributed population with equal variances; which means this test is conducted to determine whether there is a statistically significant difference in the mean scores for large and medium /small MNCs. This is done by testing the following hypothesis: H0: The groups or samples come from a normally distributed population with equal variances. The rule of thumb is that if the significant level of Levenes test is p value > .05 this indicates that the variances among the groups/sample are equal (Pallant, 2001). Therefore, the H0 fails to be rejected. Based on the result shown in Table 4.6 below it is observed that the p value is larger than .05 suggesting that the H0 for equality for variance had failed to be rejected. The Levenes test reveals information that the MNCs variances are equal between large and medium/small MNCs. Table 4.7: The Levenes Test of Homogeneity of Variance for Local Firms Performance Variable on MNCs Population Size (N=128)
Variables Local Firms Performance Levenes Statistic, F .809 Sig- (p-value) .370

4.14.3 The Skewness and Kurtosis Values The descriptive procedure was conducted to analyze the distribution of scores of all the variables in this study by checking the skewness and kurtosis values. The rule of thumb for the skewness value, which is the tilt in a distribution, is that the skewness of a distribution within the +2 to -2 range suggests that the data is normally distributed. For the kurtosis value;

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which is the peakedness of a distribution, the kurtosis of a distribution within the +2 to -2 range suggests that the data is normally distributed (Pallant, 2001). Upon checking the skewness and kurtosis values from the descriptive statistics, the result as shown in Table 4.7 below indicates that the data is normally distributed for all variables. The skewness values ranged from -.800 to .392 and for the kurtosis values the range is between -.890 and .937. Table 4.8: The Skewness and Kurtosis Values of Descriptive Statistics
Variables Tacitness Complexity Specificity Absorptive Capacity Recipient Collaborativeness Partner Protectiveness Transfer Capacity Relationship Quality Mutual Trust Degree of Technology Transfer Local Firms Performance Skewness Statistics -.389 -.326 -.412 -.078 -.800 -.327 -.409 -.746 .127 .392 .068 Kurtosis Statistics -.411 -.173 -.452 -.294 .937 -.890 -.440 .162 -.798 -.130 -.355

4.14.4 The Graphical Examination From the descriptive procedures, the researcher had carefully inspected the histogram, stemand-leaf plot, box plot, normal probability plot, and detrended normal plot. For the histogram, the shape of the distribution (the bell shape) for all the variables appears to be reasonably normally distributed. For the stem-and leaf plot, all the variables median lines are positioned in the centre of the box and the variability of the scores for all the variables are 198

quite similar. This is also supported by an inspection of the normal probability plots (Normal Q-Q plots) which reveals that the points for all the variables fell more or less in a straight line. For the detrended normal plot, there is no pattern to the clustering of points; meaning the points for all the variables assembles around a horizontal line through zero. Thus, the graphical examination indicates that the data for all the variables in this study are reasonably normally distributed for all the variables.

4.14.5 The Collinearity Test The collinearity test was conducted to examine the possibility of multicollinearity problems. The result shown in Table 4.8 below reveals that the Tolerance (T) values obtained for this study are high and the VIF values are low. The result indicates that the independent variables (IVs) are significantly correlated with the dependent variable (DV) but have relatively low correlations among themselves. This implies that multicollinearity problem does not provide any negative impact on the validity of the results. This shows that both T and VIF values are well above the rule of thumb as discussed in section 4.14 above. Table 4.9: The Test for Collinearity of Local Firms Performance
Variables Tolerance (T) Degree of Technology Transfer Technology transfer Characteristics .678 .678 Collinearity Statistics Variance Inflation Factors (VIF) 1.475 1.475

Based on the results of the tests conducted above, the data obtained through the studys instrument is assumed to be normally distributed and fitted well with the multivariate analysis and free of multicollinearity problems. The results also show that no violations of the assumptions were committed during the tests which mean data transformation was not 199

necessary. To put it differently, when all the multivariate normality assumptions are met, the application of the correlations, multiple regressions, and MMR analyses are reasonably justified to answer the research questions and subsequently to achieve the objectives of this study.

4.15 Chapter Summary This chapter describes the plan and structure of quantitative investigation adopted by the study. The power analysis was performed to determine the appropriate sample size for the study after the population and unit of analysis were identified by the researcher. This was done to achieve the sufficient (ideal) number of sample size prior to conducting the correlation, multiple regression and inferential analyses. Based on the conventions set by various researchers in literature and result of power analysis, the sample size of this study is considered adequate representative of the population.

The procedures and types of sampling were thoroughly discussed to describe the data collection processes and steps undertaken by the researcher in collecting data from the sample frame of JV companies that were listed with the ROC. Adequate representative of sample is achieved by including all the 850 active JV companies in the survey. Since the study uses questionnaire as its tool, the researcher conducted reliability tests and carefully adopted the well established measurements from previous established studies to ensure reliability and validity of the scales used. The pilot test was also conducted prior to the actual data collection in order to further strengthen the scales.

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The researcher followed every possible steps and procedures to ensure that the data met the preliminary assumptions of normality, homogeneity of variance, and linearity by conducting EDA analysis, which include hypothesis testing for normality (Kolmogrov-Smirnov), Levene test of homogeneity of variance, graphical examination, and collinearity test. In addition, the data were screened and cleaned, the skeweness and kurtosis values were checked, and from the descriptive procedure, the histogram, stem-and-leaf plot, box plot, normal probability plot, and detrended normal plot examined. The results of the tests conducted revealed that the data was assumed to be normally distributed, fitted well with the multivariate analysis and there was no serious multicollinearity problem. Moreover, prior to using the survey data to test the studys hypotheses, the non response bias test was conducted to eliminate the possibility of non response bias in the findings.

Having performed the correlation, multiple regression, and MMR analyses, the results and findings of the study are presented and discussed in the next chapter.

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CHAPTER 5

FINDINGS AND DISCUSSIONS

5.1 Introduction This chapter presents the results obtained from the analyses which were conducted based on the sample population of this study. The results are presented together with discussions on the findings and evidence from the literature supporting the findings. This chapter begins with the introduction followed by profile of the respondents and organizations. Next, the results are presented based on two levels of analysis namely 1) the group level analysis; which presents results of relationships between each group of TT characteristics (TTCHARS) and degree of technology transfer (TTDEG) and its dimensions, and 2) the subvariables (individual) level analysis; which presents results of relationships between each dimension (sub-variable) of TT characteristics and TTDEG and its dimensions. The succeeding sections present results of analyses on relationships between TTDEG and local firms performance and its two dimensions. The results of correlations, multiple regressions, and moderated multiple regressions (MMR) analyses are individually discussed and presented together with results of the hypothesis testing. Finally, the overall hypotheses results and summary are presented at the end of this chapter.

5.2 Profile of Respondents First, this section describes the profile of the respondents who participated in this study based on two types of industries which are actively involved in TT through JVs, namely 1)

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manufacturing (MI) and 2) service (SI) industries. Second, the succeeding sections describe the organizations profile with respect to JV companies size, age of JVs and foreign equity ownership in JVs.

5.2.1 Organizations Profile - JV Industry and JV Size For MI, as shown in Table 5.1 below, out of 80 JV companies, 50% represents JV companies that employed less than 100 employees, 32.5% employed between 101 to 300 employees, 11.3% employed between 301 to 500 employees, 2.5% employed between 501 to 1000 employees, and 3.8% employed more than 1000 employees. As for SI, out of 48 JV companies, 48% represents JV companies that employed less than 100 employees, 40% employed between 101 to 300 employees, 2% employed between 301 to 500 employees, 4% employed between 501 to 1000 employees, and 6% employed more than 1000 employees. Table 5.1: JVs Industry and JVs Size
Types of Industries Manufacturing (MI) Size of JV Companies 100 and less employees No 40 23 63 % 50.0 48.0 49.7 101-300 employees No 26 19 45 % 32.5 40.0 35.8 301-500 employees No 9 1 10 % 11.3 2.0 7.8 501-1000 employees No 2 2 4 % 2.5 4.0 1.8 More than 1000 employees No % 3 3.8 3 6.0 6 4.9 Total

Service (SI) Total

No 80 48 128

% 62.5 37.5 100

5.2.2 Organizations Profile - JV Industry and Age of JV For MI, as shown in Table 5.2 below, out of 80 JV companies participating in this study, 53.1% have operated more than 15 years, 9.9% have operated more than 10 years but less than 15 years, 2.5% have operated more than 5 years but less than 10 years, 33.3% have

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operated more than 3 years but less than 5 years, and only 1.2% have operated less than 3 years. On the other hand, SI is represented by 48 JV companies of which 36.6% have operated more than 15 years, 9.8% have operated between 10 to 15 years, 4.8% have operated more than 5 years but less than 10 years, 48.3% have operated more than 3 years but less than 5 years, and only 2.5% have operated less than 3 years. Table 5.2: JV Industry and Age of JV
Types of Industries Manufacturing (MI) Age of JVs Less than 3 years More than 3 years but less than 5 years No 27 19 46 % 33.3 48.3 40 More than 5 years but less than 10 years No % 2 2.5 2 4.8 4 3.2 More than 10 years but less than 15 years No % 8 9.9 4 9.8 12 9.8 More than 15 years Total

Service (SI) Total

No 1 1 2

% 1.2 2.5 1.6

No 42 16 58

% 53.1 36.6 45.4

No 80 48 128

% 62.5 37.5 100

5.2.3 Organizations Profile - JVs Industry and Foreign Equity As shown in Table 5.3 below, out of 80 JV companies participating in this study, 40% have foreign equity of more than 51%, 21.3% have foreign equity between 41 to 50%, 12.5% have foreign equity between 31 to 40%, 3.8% have foreign equity between 21 to 30%, and 22.5% have foreign equity of between 10 to 20%. As for SI, out of 48 JVs companies participating in this study, 22.9% have foreign equity of more than 51%, 20.8% have foreign equity between 41 to 50%, 12.5% have foreign equity between 31 to 40%, 37.5% have foreign equity between 21 to 30%, and 6.3% have foreign equity of between 10 to 20%.

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Table 5.3: JV Industry and Foreign Equity


Types of Industries Manufacturing (MI) Foreign Equity in JVs Between 1020% No % 18 22.5 3 6.3 21 16.4 Between 2130% No % 3 3.8 18 37.5 21 16.4 Between 3140% No % 10 12.5 6 12.5 16 12.5 Between 4150% No % 17 21.3 10 20.8 27 21.1 More than 51% No % 32 40 11 22.9 43 33.5 Total No 80 48 128 % 62.5 37.5 100

Service (SI) Total

5.3 Relationship between KCHAR and TTDEG This section presents the results of group level analysis of relationships between KCHAR and TTDEG and its two dimensions, degree of tacit knowledge (TCTK) and degree of explicit knowledge (EXPK) (as part of Research Question 1). As the first group of TT characteristic, KCHAR comprise three KCHARs dimensions, namely, tacitness (TCT), complexity (COMPLX) and specificity (SPEC). In this section, each hypothesis was tested using Pearsons Product Moment Correlation Coefficients; where a correlation matrix between the two variables was produced together with the r and r values to determine whether there are significant relationships between KCHAR and TTDEG and its dimensions (Appendix H). The hypotheses tested were H1, H1a, H1b, H1c, H1d and H1e.

Preliminary analyses were conducted to ensure no violation of the assumptions of normality, linearity and homoscedasticity. This was done by performing the exploratory data analysis and normality test as thoroughly discussed in section 4.14. Based on the collinearity diagnostic, none of the dimensions has 1) condition index above the threshold value of 30.0, 2) T value smaller than 0.10, and 3) VIF value more than 10.0. This indicates that there is no serious multicollinearity problem among the variables. 205

Table 5.4 below indicates that there is a small significant negative linear correlation between the overall KCHAR (measured by the KCHARQ) and TTDEG (measured by the TTDEGQ) [r = -.135, n = 128, p < 0.10], with high degree of KCHAR associated with low TTDEG. In explaining the variance, the coefficient of determination (r = .13) indicates that the proportion variance in TTDEG is explained by 0.019% of the variance in KCHAR. Thus, given the above relationship Hypothesis H1 is supported.

Table 5.4: Pearson Correlation Coefficients of TTCHARS and TTDEG and its Dimensions
Variables X1 X2 X3 X4 Y X1 X2 X3 X4 Y1 X1 X2 X3 X4 Y2 KCHAR TRCHAR TSCHAR RCHAR TTDEG KCHAR TRCHAR TSCHAR RCHAR TCTK KCHAR TRCHAR TSCHAR RCHAR EXPK X1 1.000 .182 .296 .375 -.135 1.000 .182 .296 .375 -.145 1.000 .182 .296 .375 -.106n.sig X2 X3
X4

Y/Y1/Y2

1.000 .304 .518 .465**

1.000 .342 .387**

1.000 .577**

1.000

1.000 .304 .518 .428**

1.000 .342 .328**

1.000 .502**

1.000

1.000 .304 .518 .442**

1.000 .342 .398** N = 128

1.000 .581**

1.000

** Correlation is significant at 0.01 level (1-tailed) * Correlation is significant at 0.05 level (1-tailed) Correlation is significant at 0.10 level (1-tailed)

5.3.1 Relationships between KCHAR and Dimensions of TTDEG This section reports the results of relationships between KCHAR and dimensions of TTDEG (TCTK and EXPK). Similar to section 5.3 above, the relationships were investigated using 206

Pearsons Product Moment Correlation Coefficients. Preliminary analyses were conducted to ensure there was no violation of the assumptions of normality, linearity and homoscedasticity.

5.3.1.1 KCHAR and TCTK Table 5.4 above indicates that there is a small significant negative linear correlation between KCHAR and TCTK [r = -.145, n = 128, p < 0.10], with high degree of KCHAR associated with low TCTK. In explaining the variance, the coefficient of determination (r = .14) indicates that the proportion variance in TCTK is explained by 0.02% of the variance in KCHAR. Thus, given the above relationship Hypothesis H1a is supported.

5.3.1.2 KCHAR and EXPK Table 5.4 above indicates that there is no significant correlation between KCHAR and EXPK [r = -.106, n = 128, p > 0.05]. Thus, given the above relationship Hypothesis H1b is not supported.

At group level analysis, the above results indicate that in the context of inter-firm TT through IJVs, as expected the effect of knowledge characteristics (KCHAR) on degree of technology transfer (TTDEG) has a negative sign and the results are statistically significant (p < 0.10). The KCHAR, as the first group of TT characteristic, have a small significant negative effect on TTDEG (Table 5.4). Except for degree of explicit knowledge (EXPK); where the results are not statistically significant, degree of tacit knowledge (TCTK) also recorded similar results (p < 0.10). This suggests that tacit knowledge which is less standardized in the form

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of standard manuals, procedures, and blueprints, is stickier than explicit knowledge thus making it more difficult to transfer within JVs.

The results of the insignificant effect of KCHAR on EXPK are not in line with the findings made by Pak and Park (2004); where KCHAR effect on manufacturing-processing (explicit knowledge) is more dominant than new product development (tacit knowledge). The results are quite interesting given that although explicit knowledge is mostly codified in the form of blueprints, instructions, formulas or standard manuals by the suppliers but still it implicitly consists of strong intrinsic tacit element/value (Nonaka and Takeuchi, 1995) in which to accelerate the transfer of EXPK would involve various organizational levels of involvement (Inkpen, 2000). Explicit knowledge transfer of a highly specific and complex technology/knowledge requires not only learning by doing by the recipient but also the active involvement of the teacher/supplier (Lane and Lubatkin, 1998). Overall the findings confirm and support the previous empirical results of the effect of KCHAR on knowledge transfer; where knowledge-specific characteristics such as tacitness or ambiguous knowledge are more difficult to transfer for international ventures (Reed and DeFillippi, 1990; Kogut and Zander, 1993; Szulanski, 1996; Simonin, 1999a, 1999b; Pak and Park, 2004; Minbaeva, 2007).

The results of the present study also suggest that KCHAR which comprise TCT, COMPLX, and SPEC, had negatively affected degree/amount of technologies that were intended to be transferred because the technology suppliers specific technologies were well embodied within the component of their competencies, non-codifiable, highly personal, and deeply rooted in action, commitment, and involvement within a specific context (Reed and

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DeFillippi, 1990; Nonaka, 1994). The KCHAR involve the intangible factors embedded in the personal beliefs, experiences, and values in an organization which caused the technology/knowledge to be difficult to be formalized, communicated, transferred and shared between the alliance or JV partners (Inkpen, 1998a; 2000).

The KCHAR as the first group of TT characteristic are consistently found to be significantly affecting the volume/amount of technologies that are intended to be transferred to the recipients. The results have not only supported the significant effect of KCHAR on TTDEG but also extend the literature by establishing that KCHAR have a significant negative effect on degree of tacit knowledge (TCTK). Specifically, the results 1) extend the general findings in Simonin (1999a) where KCHAR (tacitness and complexity) were found to have a significant effect on knowledge transfer in strategic alliances, and 2) concur with Zander and Koguts (1995) findings; which suggested that the more codifiable and teachable a capability is, the higher the risk of rapid transfer.

The overall results and findings are consistent with recent developments in knowledge transfer literature which proposes that KCHAR are not the only most important determinant of knowledge transfer (Minbaeva, 2007; Szulanski and Cappetta, 2003; Hansen and Lovas, 2004). The effect of KCHAR on TTDEG in this studys model has been superseded by the TRCHAR, TSCHAR, and RCHAR as they made the weakest effect on TTDEG. The results further provide empirical evidence in such that although KCHAR made the weakest effect, nevertheless, they still affected TTDEG significantly.

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5.3.2 Relationships between Dimensions of KCHAR and TTDEG This section reports the results of individual relationships (sub-variables) between KCHARs dimension of tacitness (TCT), complexity (COMPLX), specificity (SPEC) and TTDEG. The relationships were examined using Pearsons Product Moment Correlation Coefficients. Preliminary analyses were conducted to ensure that there was no violation of the assumptions of normality, linearity and homoscedasticity.

5.3.2.1 TCT and TTDEG Table 5.5 below indicates that there is no correlation between TCT and TTDEG [r = -.074, n = 128, p > .0005]. Thus, given the above relationship Hypothesis H1c is not supported.

Table 5.5: Pearsons Correlation Coefficients Dimensions of TTCHARS and TTDEG


Variables X1 X2 X3
X4

X5

X6

X7

X8

X9

X1 X2 X3 X4 X5 X6 X7 X8 X9 Y

TCT COMPLX SPEC ACAP RCOL PPROTEC TRANSCAP RELQLTY MT TTDEG

1.000 -.132 -.166 .412 -.116 -.032 .076 .348 .210 -.074

1.000 .426 -.116 .029 .358 .169 .239 .288 -.087

1.000 .053 1.000 .196 .541 1.000 .413 -.340 -.172 .019 .550 .681 .149 .263 .370 .151 .505 .622 -.160* .343** .521**

1.000 -.243 1.000 -.121 .455 1.000 -.264 .701 .720 1.000 -.139 .610** .540** .531** 1.000

** Correlation is significant at 0.0001 level (1-tailed) * Correlation is significant at 0.05 level (1-tailed) Correlation is significant at 0.10 level (1-tailed)

N = 128

At individual level analysis, the results suggest that although tacitness (TCT) has a negative effect on TTDEG, it is not statistically significant. The negative relationship between TCT and TTDEG, although is not supported by the data, nevertheless confirms and is consistent 210

with the previous empirical studies; where TCT is negatively related to knowledge transfer (Simonin, 1999a, 1999b, Zander and Kogut, 1993, Szulanski, 1996). On the insignificant results of TCT, the results are consistent with the literature (Minbaeva, 2007; Pak and Park, 2004) which argued that TCT, as an attribute to knowledge, probably lost its importance effect when other independent variables were added to the model (Minbaeva, 2007, p.587). This is evident from the correlation results in Table 5.5 above where other sub-variables (sub-dimensions) representing TRCHAR, TSCHAR, and RCHAR recorded relatively strong significant relationships with TTDEG.

In fact the results seem to be in line with recent developments in the literature, where while acknowledging the importance of knowledge characteristics as the important determinant of knowledge transfer, they are not necessarily the only one (Minbaeva, 2007; Szulanski and Cappetta, 2003). The results in this study confirm the empirical findings in Minbaeva (2007). Thus, this study contends that the focus of the inter-firm TT especially within JVs is more on 1) the technology recipients capacity to absorb knowledge and their learning intent (motive), 2) technology suppliers ability to transfer knowledge and their level of transparency, and 3) the strength of JV partners relationship. Simonin (1999a) explicitly highlighted that even though tacit knowledge is highly context specific, close cooperation in JVs may be the only way to learn a particular technology from foreign partners. As indicated above, even though at individual level analysis TCT do not show any significant effect on TTDEG, the overall effect of KCHAR on TTDEG at the group level analysis, nevertheless, is statistically significant and supported by the population data.

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5.3.2.2 COMPLX and TTDEG Table 5.5 above indicates that there is no significant correlation between COMPLX and TTDEG [r = -.087, n = 128, p > .0005]. Thus, given the above relationship Hypothesis H1d is not supported.

The results indicate that although complexity (COMPLX) shows a negative effect on TTDEG it is not statistically significant. The negative direction, however, is consistent with the previous studies which suggest that complexity, as an antecedent of knowledge ambiguity, has negatively affected knowledge transfer or in other words the higher the complexity the lower the degree of technology transfer to the recipients (Simonin, 1999a, Minbaeva, 2007). As one of the KCHARs dimensions (sub-variable), COMPLX does not have a significant effect on TTDEG based on individual level analysis. Surprisingly when it is part of KCHAR at group level analysis, the results are statistically significant (p < 0.10). Thus, as previously argued in section 5.3.2.1 above, the results are consistent with recent development in the literature which suggests that COMPLX, as one of the knowledge characteristics, probably lose its importance when the other individual sub-variables are added in the model (Minbaeva, 2007; Szulanski and Cappetta, 2007). The results in this study are in line with the empirical findings in Minbaeva (2007).

5.3.2.3 SPEC and TTDEG Table 5.5 above indicates that there is a small significant negative linear correlation between SPEC and TTDEG [r = -.160, n = 128, p < .05], with high degree of SPEC associated with low TTDEG. In explaining the variance, the coefficient of determination (r = .16) indicates

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that the proportion variance in TTDEG is explained by 2.5% of the variance in SPEC. Thus, given the above relationship Hypothesis H1e is supported.

Based on the population data, the results are consistent with previous empirical studies on the significant relationship between specificity (SPEC) and knowledge transfer (Simonin, 1999a; Pak and Park, 2004). The results show that SPEC has a significant negative effect on TTDEG (p < 0.05) based on individual level analysis. The result suggests that high-specific technologies are closely associated with knowledge ambiguity that impedes technology transfer when they are hard to be explicitly articulated by the recipients (Reed and DeFillippi, 1990; Lippman and Rumelt, 1982). Thus, the strategic resources, competencies and skills of the foreign partner in JVs; which are highly specific in nature, are difficult to learn and imitate since they are embedded in the context and idiosyncrasy of the supplier partners organizations (Kogut and Zander, 1993).

The result in this study is consistent with the findings made by Pak and Park (2004), where specificity of knowledge characteristic leads to ambiguity and difficulties in transferring technology results in a limited volume of technologies being transferred to local partners. However, Simonin (1999a) finds that the insignificant effect of SPEC on knowledge transfer is due to the constructs lack of effect. At group level analysis, KCHAR which comprise SPEC, record a significant positive effect on TTDEG.

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5.4 Relationship between TRCHAR and TTDEG This section presents the results of relationships between TRCHAR and TTDEG and its two dimensions degree of tacit knowledge (TCTK) and degree of explicit knowledge (EXPK) (as part of Research Question 1). As the second group of TT characteristic, TRCHAR comprise two TRCHARs dimensions, namely absorptive capacity (ACAP) and recipient collaborativeness (RCOL). Similar to section 5.3 above, the relationships were examined using Pearsons Product Moment Correlation Coefficients. Preliminary analyses were performed to ensure that there was no violation of the assumptions of normality, linearity and homoscedasticity. The linear relationships, which are highlighted in the conceptual framework (section 3.3), seek to test H2, H2a, H2b, H2c and H2d.

Table 5.4 above indicates that there is a medium significant positive linear correlation between the overall TRCHAR (measured by the TRCHARQ) and TTDEG (measured by the TTDEGQ) [r = .465, n = 128, p < .0005] with high degree of TRCHAR associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .46) indicates that the proportion variance in TTDEG is explained by 21.2% of the variance in TRCHAR. Thus, given the above relationship Hypothesis H2 is supported.

5.4.1 Relationships between TRCHAR and Dimensions of TTDEG This section reports the results of relationships between TRCHAR and dimensions of TTDEG (TCTK and EXPK). The results were interpreted based on the Pearsons Product Moment Correlation Coefficients. Preliminary analyses were conducted to ensure that there was no violation of the assumptions of normality, linearity and homoscedasticity

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5.4.1.1 TRCHAR and TCTK Table 5.4 above indicates that there is a medium significant positive linear correlation between the overall TRCHAR and TCTK [r = .428, n = 128, p < .0005], with high degree of TRCHAR associated with high TCTK. In explaining the variance, the coefficient of determination (r = .42) indicates that the proportion variance in TCTK is explained by 18% of the variance in TRCHAR. Thus, given the above relationship Hypothesis H2a is supported.

5.4.1.2 TRCHAR and EXPK Table 5.4 indicates that there is a medium significant positive linear correlation between TRCHAR and EXPK [r = .442, n = 128, p < .0005], with high degree of TRCHAR associated with high EXPK. In explaining the variance, the coefficient of determination (r = .44) indicates that the proportion variance in EXPK is explained by 19.3% of the variance in TRCHAR. Thus, given the above relationship Hypothesis H2b is supported.

At group level analysis, the result of the effect of TRCHAR on TTDEG is consistent with the previous findings reported in the literature which suggest that the technology recipient characteristics have a significant strong positive effect on degree of technology transfer (Yin and Bao, 2006, Minbaeva 2007; Pak and Park, 2004; Hau and Evangelista, 2007). The correlation results show that TRCHAR have a significant positive effect on TTDEG (p < 0.0005), TCTK (p < 0.0005) and EXPK (p < 0.0005). The result indicates that TRCHAR, which comprise ACAP and RCOL, are significantly related to TTDEG and its dimensions.

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Given the fact that TRCHAR make the second strongest effect on TTDEG in the correlation analysis, the results suggest that a greater absorptive capacity which is reflected in the collaborative learning attitude on the part of the technology recipients will 1) increase the supplier partners willingness to transfer a higher degree of both tacit and explicit technologies in the collaborative JV smoothly since the technologies that the recipient partners wish to exploit are closely related to their current knowledge base (Cohen and Levinthal, 1990; Pak and Park, 2004), and 2) create potentials for a higher interorganizational learning in JVs (Hamel, 1991). A higher degree of technology is likely to be transferred to the recipient partners who possess high absorptive capability; which is reflected in the recipients basic/minimal skills, a shared language, positive attitude towards learning, relevant prior experience, up-to-date knowledge on the knowledge domain that the recipients wish to exploit and intensity of efforts (Cohen and Levinthal, 1990; Kim 1998). More importantly, as learning new technologies in JVs includes active involvement by the MNCs parent company and the involvement of various levels and actors, therefore before technology/knowledge can possibly be transferred, knowledge must be connected through various levels (individual, group and organization) in order to create potentials in sharing the observations and experiences (Inkpen, 2000; Nonaka, 1994).

As the second group of TT characteristic, TRCHAR which consist of ACAP and RCOL are found to have a consistent strong significant positive effect on TTDEG and its two dimensions. The results are consistent with the general empirical findings by the literature on the significant effect of TRCHAR on knowledge transfer (Minbaeva, 2007; Yin and Bao, 2006; Pak and Park, 2004; Hau and Evangelista, 2007); where in this study TRCHAR are

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found to be highly significant in affecting the transfer of both tacit and explicit knowledge (p value = 0.0001) from foreign JV partners to local firms. This new insight is interesting as it extends the above literatures findings in such that all the previous findings indicate similar effects of TRCHAR on knowledge transfer and acquisition in IJVs (Pak and Park, 2004; Hau and Evangelista, 2007). In addition, the empirical data also suggests that the successful transfer of tacit and explicit knowledge to the recipient in JVs strongly depends on the recipients collaborative attitudes towards achieving mutual benefits and their high commitment to organizational learning. Thus, the recipients learning intent is crucial as a mechanism to enhance and motivate the suppliers openness/transparency to share and transfer higher technologies. The empirical data supports the proposition that the recipients collaborative learning intent creates potentials for a higher degree of knowledge sharing, mutual trust, and opportunities to extract greater synergy between JV partners.

The results have indeed provided empirical evidence to the theoretical proposition which suggest that TRCHAR have superseded the significant effect of KCHAR as the most important determinant of knowledge transfer (Szulanski and Cappetta, 2003; Hansen and Lovas, 2004). This is evident where TRCHAR made the second strongest effect on TTDEG in the studys model. The overall results suggest that the greater the TRCHAR, the higher will be the degree of technology transferred to local companies. The results support and confirm empirical findings in Minbaeva (2007) and Pak and Park (2004) where the inability of the technology recipient partner to absorb new knowledge could impede the successful transfer of both tacit and explicit technology by the foreign partner in IJVs.

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5.4.2 Relationships between Dimensions of TRCHAR and TTDEG This section reports the results of relationships between TRCHARs dimensions of absorptive capacity (ACAP), recipient collaborativeness (RCOL), and TTDEG. The relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure that there was no violation of the assumptions of normality, linearity and homoscedasticity.

5.4.2.1 ACAP and TTDEG Table 5.5 above indicates that there is a medium significant positive linear correlation between ACAP and TTDEG [r = .343, n = 128, p < .0005], with high degree of ACAP associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .34) indicates that the proportion variance in TTDEG is explained by 11.5% of the variance in ACAP. Thus, given the above relationship Hypothesis H2c is supported.

Based on individual level analysis, the results indicate that ACAP, as one of the technology recipient characteristics, has a significant medium positive effect on TTDEG (p < 0.0005). The significance positive relationship suggests the need for the technology recipient to have sufficient ability to recognize, assimilate, and apply new technology transferred from the JVs partners (Cohen and Levinthal, 1990). The correlation results also suggest that the greater the absorptive capacity the higher the degree of technology transfer.

In addition to the significant effect of ACAP on TTDEG, though expected, the plausible explanation is that the population data could have perceived that a high level of absorptive

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capacity is critical in absorbing tacit and explicit technology and this has become a major challenge for technology recipient in order to achieve a higher degree of technology transfer in JVs. The concern is more on 1) the extent of the recipients knowledge base (prior related knowledge), and 2) the extent of intensity of efforts made by the recipient to absorb highly specific technologies. This is because the ability of local recipients firms in internalizing the JV partner skills greatly depends on their prior related knowledge and the intensity of efforts (Cohen and Levinthal, 1990; Kim, 1998; Zahra and George, 2002). Nonetheless, a high level of receptivity (capability) in absorbing technologies also depends on other factors such as the appropriateness of resource deployment, incentive system, attitudes toward learning, and the propensity to unlearn (Hamel, 1991).

The results are in line with previous studies in the literature (Minbaeva, 2007; Hau and Evangalista, 2007; Park and Park, 2004). Consistent with the group level analysis, TRCHAR which comprise ACAP also recorded a significant positive effect on TTDEG (p < 0.0005). Thus, the results are quite interesting in such that ACAP will encourage the foreign JV partner to transfer a higher degree of both tacit and explicit knowledge to local firms.

5.4.2.2 RCOL and TTDEG Table 5.5 above indicates that there is a strong significant positive linear correlation between RCOL and TTDEG [r = .521, n = 128, p < .0005], with high degree of RCOL associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .52) indicates

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that the proportion variance in the TTDEG is explained by 27% of the variance in the RCOL. Thus, given the above relationship Hypothesis H2d is supported.

At individual level analysis, the result indicates that the RCOL, as one of the TRCHARs dimensions, has a positive effect on TTDEG, where the result is statistically significant. From the correlation results, the strong positive sign of Pearson r confirms the previous theory on the importance of recipient collaborativeness in facilitating TT through JVs (Inkpen, 2000). The results suggest that the greater the degree of RCOL the higher will be the degree of technology transferred by the foreign JV partners. In the cooperative venture such as JVs, the recipient partners learning intent is therefore crucial in encouraging openness and transparency of the transferring partner to share and transfer higher technology (Inkpen, 2000). Thus, if learning in JVs is being considered as competitive rather than collaborative, it restricts the smooth flow of the required technology as the learning partner is treated as competitor (Child and Faulkner, 1998).

The results also suggest that collaborative learning which is based on the underlying spirit of strong inter-partner collaboration, promotes knowledge sharing, mutual benefits, and opportunities to extract potential synergy between partners in JVs (Doz, 1996; Geringer, 1991). Thus, with these incentives the transferring partner in JVs would have high motivation to share their technology in the collaborative environment and may not deliberately restrict the transfer of technology (Inkpen, 1998a, 2000). The results are in line with the previous studies which found statistical support for the significant effect of RCOL on degree of KT (Yin and Bao, 2006). The results also indicate that when compared to other variables, RCOL

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has emerged as one of the strong determinants of TTDEG and consistent with the group level analysis results where TRCHAR have also recorded a similar strong significant positive effect on TTDEG (p < 0.0005).

5.5 Relationship between TSCHAR and TTDEG This section presents the results of relationships between TSCHAR and TTDEG and its two dimensions: degree of tacit knowledge (TCTK) and degree of explicit knowledge (EXPK) (as part of Research Question 1). As the third group of TT characteristic, TSCHAR consist of two TSCHARs dimensions, namely partner protectiveness (PROTEC), and transfer capacity (TRANSCAP). Similar to section 5.3 and 5.4 above, the relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure there was no violation of the assumptions of normality, linearity and homoscedasticity. The linear relationships; which are highlighted in the conceptual framework (section 3.3), seek to test H3, H3a, H3b, H3c and H3d.

Table 5.4 above indicates that there is a medium significant positive linear correlation between the overall TSCHAR (measured by the TSCHARQ) and TTDEG (measured by the TTDEGQ) [r = .387, n = 128, p < .0005], with high degree of TSCHAR associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .38) indicates that the proportion variance in TTDEG is explained by 14.4% of the variance in TSCHAR. Thus, given the above relationship Hypothesis H3 is supported.

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5.5.1 Relationships between TSCHAR and Dimensions of TTDEG This section reports the results of relationships between TSCHAR and dimensions of TTDEG (TCTK and EXPK). The relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure there was no violation of the assumptions of normality, linearity and homoscedasticity.

5.5.1.1 TSCHAR and TCTK Table 5.4 above indicates that there is a medium significant positive linear correlation between TSCHAR and TCTK [r = .328, n = 128, p < .0005], with high degree of TSCHAR associated with high TCTK. In explaining the variance, the coefficient of determination (r = .32) indicates that the proportion variance in TCTK is explained by 10.2% of the variance in TSCHAR. Thus, given the above relationship Hypothesis H3a is supported.

5.5.1.2 TSCHAR and EXPK Table 5.4 above indicates that there is a medium significant positive linear correlation between TSCHAR and EXPK [r = .398, n = 128, p < .0005], with high degree of TSCHAR associated with high EXPK. In explaining the variance, the coefficient of determination (r = .39) indicates that the proportion variance in EXPK is explained by 15.2% of the variance in TSCHAR. Thus, given the above relationship Hypothesis H3b is supported.

At group level analysis, the results indicate that TSCHAR have a strong positive effect on TTDEG and the results are statistically significant (p < 0.0005). The results show that TSCHAR are also statistically significant for both degree of tacit knowledge (p < 0.0005)

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and explicit knowledge (p < 0.0005). As shown in Table 5.4, TSCHAR made the third strongest effect on TTDEG as compared to other characteristics.

The results are in line with recent propositions which argued that the information provider attributes have indeed superseded the importance of knowledge attributes as the most important KT characteristics (Minbaeva, 2007; Szulanski and Cappetta, 2003); where empirical evidence shows that TSCHAR (the information provider) have superseded KCHAR as the most important determinant of knowledge transfer. This is evident where in the studys model TSCHAR made the third strongest relationship with TTDEG.

The presence of a strong impact of TSCHAR on TTDEG, TCTK, and EXPK suggests that the sample population perceives that more technologies (tacit and explicit) will be transferred to the local firms when 1) a high degree of openness or transparency exist between JV partners and 2) the supplier partners have the ability to transfer technology effectively to the local recipient firm. Thus, the greater the TSCHAR the higher the degree of technology transfer.

Consistent with the empirical findings made by Minbaeva (2007) and Yin and Bao (2006) (TSCHAR were operationalized as the supplier-side individual level factors); where TSCHAR were found to have significantly affected knowledge transfer and tacit knowledge acquisition, the results further extend the literature by showing a strong positive effect of TSCHAR on both degree of tacit and explicit knowledge (p < 0.05). The plausible explanation for the significance effect is that the transfer of both tacit and explicit knowledge

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in JV frequently requires the supplier partners to become 1) proficient and more articulate in describing the potential uses of the knowledge and conditions as to what the knowledge could achieve (Martin and Solomon, 2003), and 2) more transparent in the transfer process since it involves various levels and actors (Inkpen, 2000).

The results also suggest that the transferring partners in the JVs are satisfied with the recipients collaborative learning intent which directly increases the trust between partners. As a result the supplier partners could have been motivated to transfer more tacit and explicit technologies when they become less suspicious of the recipient partners (Inkpen, 2000). The empirical data finds support for the premise that the suppliers transparency during the transfer process is a key element in determining the amount of technology transferred in JVs, and high degree of transparency by the supplier partners is strongly motivated by the collaborative and reciprocity attitudes of the recipient partners in terms of providing information on local market conditions, business customs, customers preference and taste, distribution channels, and the supply of raw materials (Hamel, 1991).

5.5.2 Relationships between Dimensions of TSCHAR and TTDEG This section reports the results of relationships between TSCHARs dimension of partner protectiveness (PPROTEC), transfer capacity (TRANSCAP) and TTDEG. The relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure that there was no violation of the assumptions of normality, linearity and homoscedasticity.

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5.5.2.1 PPROTEC and TTDEG Table 5.5 indicates that there is a small significant negative linear correlation between partner protectiveness (PPROTEC) and TTDEG [r = -.139, n = 128, p < .10], with high degree of PPROTEC associated with low TTDEG. In explaining the variance, the coefficient of determination (r = .13) indicates that the proportion variance in TTDEG is explained by 0.02% of the variance in PPROTEC. Thus, given the above relationship Hypothesis H3c is supported.

At individual level analysis, the results show that partner protectiveness (PPROTEC) has a low significant negative effect on TTDEG. The negative sign of PPROTEC suggests that 1) the greater the PPROTEC the lower the volume of technology will be transferred to the local firms, and 2) the proprietary assets and competencies as the source of the sustainable competitive advantage are more likely to be protected by the supplier partners from the opportunist recipient partners (Inkpen, 2000; Khanna et al. 1998). Thus, mutual trust (MT) plays an important role as an efficient mechanism to reduce degree of PPROTEC in JVs which directly increases transparency between JV partners.

PPROTEC as a well established variable of knowledge transfer has been extensively dealt with in the literature (Hamel, 1991; Inkpen, 2000; Parkhe, 1993). The results are not in line with Simonins (1999a) findings; where PPROTEC was found insignificant because 1) PPROTEC may not always be detectable or observable, and 2) the insignificance of PPROTEC may well be rooted in the close interplay between protectiveness and opportunism. As compared to Simonin (1999a) the plausible explanation for the significant

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results of PPROTEC is that there was no problems encountered by the researcher to capture PPROTEC from the highest management level (Simonin, 1999a). The results, nevertheless, are in line with the recent findings by Hau and Evangelista (2007); where PPROTEC has significantly affected the acquisition of tacit and explicit marketing knowledge. The results are also consistent with the overall significant effect of TSCHAR; which comprised PPROTEC, on TTDEG at the group level analysis.

5.5.2.2 TRANSCAP and TTDEG Table 5.5 indicates that there is a strong significant positive linear correlation between transfer capacity (TRANSCAP) and TTDEG [r = .610, n = 128, p < .0005], with high degree of TRANSCAP associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .61) indicates that the proportion variance in TTDEG is explained by 37.2% of the variance in TRANSCAP. Thus, given the above relationship Hypothesis H3d is supported.

At individual level analysis, the results show that the technology suppliers ability to transfer technology (TRANSCAP) has a strong positive significant effect on TTDEG (p < 0.0005). This suggests that the greater the ability to transfer by the supplier the higher the degree of technology will be transferred to local recipient firms. Consistent with recent development in knowledge transfer literature (Szulanski and Cappetta, 2003; Minbaeva, 2007), the results confirm and support the proposition that knowledge provider attributes supersede knowledge attributes as the most important determinant of knowledge transfer. Although the literature

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on the effect of TRANSCAP on TTDEG is rather limited, the results are in line with Minbaeva (2007), Szulanski (1996) and Gupta and Govindarajan (2000).

The results also suggest that TRANSCAP of the supplier in JVs through the parents firm assistance, active involvement, high commitment in terms of investment in resources, and availability of training and support is crucial in determining the volume/degree of technology transferred to the local partners. To help increase the level of TT in JVs the results suggest that the technology supplier should become a proficient transferor and possess the ability to 1) articulate knowledge, 2) describe the potential uses of the knowledge and condition as to what the knowledge could achieve, and 3) assess the recipients degree of receptivity, assimilation and use of technology (Martin and Solomon, 2003). The population sample further infers that TRANSCAP as one of the major concerns that requires serious attention.

5.6 Relationship between RCHAR and TTDEG This section presents the results of relationships between RCHAR and TTDEG and its two dimensions: degree of tacit knowledge (TCTK) and degree of explicit knowledge (EXPK) (as part of Research Question 1). As the fourth group of TT characteristic, RCHAR comprised two RCHARs dimensions, namely relationship quality (RELQLTY) and mutual trust (MT). Similar to section 5.3, 5.4 and 5.5 above, the relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure there was no violation of the assumptions of normality, linearity and homoscedasticity. The linear

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relationships, which are highlighted in the conceptual framework (section 3.3), seek to test H4, H4a, H4b, H4c and H4d.

Table 5.4 above indicates that there was a strong significant positive linear correlation between the overall RCHAR (measured by the RCHARQ) and TTDEG (measured by the TTDEGQ) [r = .577, n = 128, p < .0005], with high degree of RCHAR associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .57) indicates that the proportion variance in TTDEG is explained by 32.4% of the variance in RCHAR. Thus, given the above relationship Hypothesis H4 is supported.

5.6.1 Relationships between RCHAR and Dimensions of TTDEG This section reports the results of relationships between RCHAR and dimensions of TTDEG (TCTK and EXPK). The relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure that there was no violation of the assumptions of normality, linearity and homoscedasticity.

5.6.1.1 RCHAR and TCTK Table 5.4 above indicates that there is a strong significant positive linear correlation between the overall RCHAR and TCTK [r = .502, n = 128, p < .0005], with high degree of RCHAR associated with high TCTK. In explaining the variance, the coefficient of determination (r = .50) indicates that the proportion variance in TCTK is explained by 25% of the variance in RCHAR. Thus, given the above relationship Hypothesis H4a is supported.

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5.6.1.2 RCHAR and EXPK Table 5.4 above indicates that there is a strong significant positive linear correlation between RCHAR and EXPK [r = .581, n = 128, p < .0005], with high degree of RCHAR associated with high EXPK. In explaining the variance, the coefficient of determination (r = .58) indicates that the proportion variance in EXPK is explained by 33.6% of the variance in RCHAR. Thus, given the above relationship Hypothesis H4b is supported.

At group level analysis, the results indicate that RCHAR have a strong positive effect on TTDEG and the results are statistically significant (p < 0.0005). The effects are also similar for both degree of tacit knowledge (p < 0.0005) and explicit knowledge (p < 0.0005). RCHAR as shown in Table 5.4 have the strongest relationship with TTDEG when compared with other TTCHARS. The overall results are in line with current proposition by the literature which suggest that the KCHAR as the most important knowledge transfer determinant have not only been superseded by TRCHAR and TSCHAR but also by RCHAR (Minbaeve, 2007; Szulanski and Cappetta, 2003; Hansen and Lovas, 2004). As compared to Minbaevas (2007) empirical findings where RCHAR are ranked as the second important determinant of knowledge transfer, the results of the present study offer a different view in terms of the significance level of the TT characteristics. The results provide empirical evidence in supporting RCHAR as the most important characteristics of TT.

The results suggest that the greater (closer) the relationship between JV partners the higher the degree of TT in IJVs. Many theoretical studies on strategic alliance have stressed on the importance of having close relationship between collaborative JV partners in promoting

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openness (transparency) and mutual trust between partners (Inkpen, 1998a, 2000, Hamel, 1991). The empirical data provides evidence that RCHAR in terms of frequent and effective interactions, multiple individual exchanges, productive and adequacy of interaction, and intimacy of relationship are most likely to contribute to positive increase of 1) relationship openness/transparency, 2) opportunity to learn, share and access to both JV partners strategic knowledge and competencies, 3) resource commitments in JV, and 4) mutual trust between JV partners.

The results also suggest that RCHAR are critical in JVs because only through close interaction can both tacit and explicit technology be easily accessed, shared, and transferred between partners. The results are consistent with few recent empirical studies such as Minbaeva (2007), Pak and Park (2004), and Yin and Bao (2006). RCHAR, as the strongest TT characteristic, become a major concern among the sample population for their role in facilitating a greater transfer of both tacit and explicit technologies and organizational learning in JVs.

Interestingly, the results extend the findings in Pak and Park (2004) by discovering that RCHAR have not only significantly affected degree of tacit knowledge (TCTK) in JVs but also degree of explicit knowledge (EXPK). Thus, the empirical data suggest that by having a close, intimate and cordial relationship between JV partners, more (higher) tacit and explicit technologies are likely to be transferred to the recipient partners. The results further suggest that there is no difference in terms of level of significance of RCHAR in affecting both TCTK and EXPK. The plausible explanation on the similar significant effects is that,

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although explicit knowledge is well standardized in blueprints, manuals, procedures and instruction as provided by the supplier, the articulation of explicit technology/knowledge in the teacher-student context/relationship requires both JV partners to have frequent interactions at various organizational levels. The quality of relationship and mutual trust act as efficient mechanisms which directly increase openness/transparency between partners resulting in a higher degree of tacit and explicit technology transferred to the recipient.

5.6.2 Relationships between Dimensions of RCHAR and TTDEG This section reports the results of relationships between RCHARs dimension of relationship quality (RELQLTY) and mutual trust (MT), and TTDEG. The relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure that that was no violation of the assumptions of normality, linearity and homoscedasticity.

5.6.2.1 RELQLTY and TTDEG Table 5.5 indicates that there is a strong significant positive linear correlation between RELQLTY and TTDEG [r = .540, n = 128, p < .0005], with high degree of RELQLTY associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .54) indicates that the proportion variance in TTDEG is explained by 29.1% of the variance in RELQLTY. Thus, given the above relationship Hypothesis H4c is supported.

At individual level analysis, the results show that RELQLTY has a strong positive effect on TTDEG and the result is statistically significant (p < 0.0005). For a fact, RELQLTY has the

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second strongest relationship with TTDEG as compared to other sub-variables. The results are consistent with recent propositions made by the literature, where knowledge attributes are not the only important determinant of knowledge transfer (Minbaeva, 2007; Szulanski and Cappetta, 2003). The presence of a strong impact of RELQLTY on TTDEG suggests that the greater the quality of relationship the higher the degree of TT from the foreign partners in the JVs.

The result further suggest that quality of relationship in JVs in terms of 1) frequent and effective interactions between partners, and 2) openness, spontaneous, and adequacy of communication create potentials for numerous individual exchanges between the partners in JVs particularly when the TT involves a highly specific technology and tacit knowledge (Szulanski, 1996; Lin, 2005; Inkpen, 2000). More opportunities for sharing, learning, and transferring technology will exist if both partners have a higher quality of interactions (Inkpen, 1998). In the collaborative and constructive interaction, RELQLTY is the most effective mechanism in facilitating TT as both parties are motivated to invest more resources in the JVs and committed to fulfill their JV commitments. The results support and confirm recent empirical findings by Lin (2005) where quality interaction was found to have a significant effect on knowledge acquisition. In line with current development in the literature, the population data suggests that 1) RELQLTY has become a major determinant of inter-firm TT especially in facilitating a higher degree of TT and organizational learning, and 2) conflicts between JV partners are likely to lead to JVs instability thus minimizing the flow of information.

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5.6.2.2 MT and TTDEG Table 5.5 indicates that there is a significant strong positive linear correlation between mutual trust (MT) and TTDEG [r = .531, n = 128, p < .0005], with high degree of MT associated with high TTDEG. In explaining the variance, the coefficient of determination (r = .53) indicates that the proportion variance in TTDEG is explained by 28.1% of the variance in MT. Thus, given the above relationship Hypothesis H4d is supported.

At individual level analysis, the results show that MT has a positive effect on TTDEG and the results are statistically significant (p < 0.0005). The results are expected given that much emphasis is given to the importance of MT between JV partners in the literature (Gulati, 1995; Kale et al., 2000; Powell, 1996). The strong positive effect suggests that the greater the mutual trust between JV partners the higher the degree of TT to the local partners. This is because MT reduces the suspicious feelings between partners in JVs thus directly creating opportunities for close interaction, increasing confidence that both partners would not take advantage on each other, and promoting openness in JVs (Kale et al., 2000). In the collaborative ventures, a low degree of trust discourages openness/transparency between partners in JVs resulting in limited accuracy and comprehensiveness of information and technology (Zand, 1972; Kale et al., 2000). The results are consistent with group level analysis; where RCHAR which consist of MT also recorded a significant impact on TTDEG.

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5.7 Predictors of TTDEG - A Holistic Model To assess and determine whether all the technology transfer characteristics (KCHAR, TRCHAR, TSCHAR, and RCHAR) in this study are significant predictors of degree of technology transfer (TTDEG) (Research Question 2), a-four predictors multiple linear regression model is proposed (The Main Model). In this model the four predictor variables of TTDEG are categorized as KCHAR (X1), TRCHAR (X2), TSCHAR (X3), and RCHAR (X4). The integrated linear relationship which is highlighted in the conceptual framework (section 3.3), seek to test H5 and H5a. As discussed in section 4.12.4, the equation (Equation 4.1) of the proposed multiple linear regression model is reproduced as follows: Y = 0 + 1 (X1) + 2 (X2) + 3 (X3) + 4 (X4) +
Where, Y X1 X2 X3 X4 = TTDEG (The Dependent Variable), = KCHAR (The Independent Variable), = TRCHAR (The Independent Variable), = TSCHAR (The Independent Variable), = RCHAR (The Independent Variable), = Constant (Intercept),

1-4 = Estimates (Regression coefficient), and


= The error term.

To determine the best set of predictor variables in predicting TTDEG (Y), a standard multiple regressions (Enter Method) was performed between TTDEG as the dependent variable and KCHAR (X1), TRCHAR (X2), TSCHAR (X3), and RCHAR (X4) as independent variables. Analysis was performed using SPSS REGRESSION and SPSS EXPLORE to evaluate the assumptions. As depicted in the coefficients table below (Table 5.6), the estimates of the

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model coefficients for 0 = 12.068, 1 = -0.079, 2 = 0.102, 3 = 0.246, and 4 = 0.176. Therefore, the estimated model is as follows: Y (TTDEG) = 12.068 - 0.079 (X1) + 0.102 (X2) + 0.246 (X3) + 0.176 (X4) +
Where, Y X1 = Degree of Technology Transfer (TTDEG), = Knowledge Characteristics (KCHAR),

X2 = Technology Recipient Characteristics (TRCHAR), X3 = Technology Supplier Characteristics (TSCHAR), X4 = Relationship Characteristics (RCHAR), = Constant (Intercept),

1-4 = Estimates (Regression coefficient), and


= The error term.

Table 5.6: Estimates of Coefficients for the Main TTDEG Model


Coefficients a Unstandardized Coefficients Model 1 (Constant) KCHAR TRCHAR TSCHAR RCHAR B 12.068 -.079 .102 .246 .176 Std. Error 5.104 .045 .044 .087 .033 Standardized Coefficients Beta -.134 .188 .213 .458 t 2.365 -1.765 2.299 2.812 5.292 Sig. .020 .080 .023 .006 .000 Collinearity Statistics Tolerance .826 .712 .827 .635 VIF 1.211 1.404 1.209 1.575

a. Dependent Variable: TTDEG

Note: R = 0.645, R = 0.416; Adj. R = 0.397

The R-squared of 0.416 implies that the four predictor variables explain about 41.6 % of the variance in the TTDEG (Appendix I). This is quite a good and respectable result. The ANOVA table reveals that the F-statistics (F = 21.901) is medium and the corresponding pvalue is highly significant (p = 0.0001) or lower than the alpha value of equal to zero confirming that there is a linear relationship between TTDEG and the four predictor 235

variables. Table 5.6 above also reveals that the largest beta coefficient (standardized) is 0.458; which is for RCHAR. It means this variable makes the strongest unique contribution in explaining the dependent variable (TTDEG) when the variance explained by other predictor variables in the model is controlled for. It suggests that one standard deviation (SD) increase in RCHAR is followed by 0.458 standard deviation increase in TTDEG. The beta value for TSCHAR is the second highest (0.213), followed by TRCHAR in the third place (0.188). The beta value for KCHAR is the smallest (-0.134) indicating that it made the least contribution. The negative sign indicates negative linear relationship between the predictor and the dependent variable. It means that one standard deviation (SD) increase in KCHAR is followed by 0.134 standard deviation decrease in TTDEG. Based on the collinearity diagnostic results below (Table 5.7), none of the model dimensions has condition index above the threshold of 30.0, none of the tolerance (T) value smaller than 0.10 and all VIF statistics are less than 10.0 (Table 5.6). This indicates that there is no serious multicollinearity problem among the predictor variables of the model. Table 5.7: The Multicollinearity Diagnostic for the Main TTDEG Model
Collinearity Diagnostics a Variance Proportions KCHAR .00 .17 .26 .50 .07 TRCHAR .00 .64 .00 .33 .03 TSCHAR .00 .05 .85 .02 .07 RCHAR .00 .01 .04 .56 .39

Model Dimension Eigenvalue 1 1 4.901 2 .040 3 .027 4 .017 5 .015 a. Dependent Variable: TTDEG

Condition Index (Constant) 1.000 .00 11.041 13.435 17.149 18.053 .02 .00 .14 .84

The normal P-P plot of regression standardized residuals of Figure 5.1 below reveals that all observed values fall roughly along the straight line indicating that the residuals are from a normally distributed population.

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Figure 5.1: The Normal P-P plot of the Regression Standardized Residual for the Main TTDEG Model
Normal P-P Plot of Regression Standardized Residual

Dependent Variable: TTDEG

1.0

Expected Cum Prob

0.8

0.6

0.4

0.2

0.0 0.0 0.2 0.4 0.6 0.8 1.0

Observed Cum Prob

The scatterplot as depicted in Figure 5.2 below (standardized predicted values against observed values) indicates the relationship between the dependent variable and the predictors is linear and the residual variances are about equal or constant. Figure 5.2: The Scatterplot of Standardized Predicted Values vs. Observed Values for the Main TTDEG Model

Scatterplot

Dependent Variable: TTDEG


4

Regression Standardized Residual

-1

-2 -3 -2 -1 0 1 2 3

Regression Standardized Predicted Value

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Thus, judging from the R-squared (R), the p and beta values of all the predictor variables, the non-existence of multicollinearity problem between predictors, and the fact that the assumptions of normality, equality of variance and linearity were all met, therefore it is reasonable to conclude that the estimated multiple regression model to explain TTDEG proposed by this study is stable, good and reliable. In addition, the integrated model which is fully supported by the population data also suggests that all the predictor variables (KCHAR, TRCHAR, TSCHAR, and RCHAR) included in the model are significant predictors which determine the degree of technology transfer by the foreign MNCs to local recipient firms. Thus, given the above results, Hypothesis H5 is supported.

Based on the above results, the studys model is considered as a new contribution to the literature because of its holistic approach in determining the predictors of TTDEG. All the main TT characteristics are well represented in the model to constitute a fully specified model of degree of inter-firm TT in JVs. Moreover, supported by the population data, the model is viewed as stable, good, and reliable because it met all the preliminary assumptions and it also has the ability to 1) capture a complete view of critical relationships between all TTCHARS and TTDEG, and 2) predict the relative unique contribution of each TTCHAR to explain TTDEG. Specifically, the models holistic approach further extends previous empirical studies by Pak and Park (2004), Yin and Bao (2006) and Hau and Evangelista (2007) in such that it goes beyond examining TT or KT as an outcome; where the present model 1) provides plausible explanations and empirical evidence on critical relationships between all TTCHARS and TTDEG from the recipients perspective, and 2) successfully predicts significant predictors of TTDEG in IJVs.

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5.7.1 Predictors of TTDEG - The Second TTDEG Model Building on the above holistic model, this study also advances a second TTDEG model (The Second Model) to assess and determine whether the sub-variables, which represent TTCHARS in this study could also become significant predictors of TTDEG (as part of Research Question 2). In other words, its function is to identify specifically which particular individual dimensions (sub-variables) of technology transfer characteristics are good predictors to explain TTDEG. In determining whether all the technology transfer characteristics sub-variables (KCHAR, TRCHAR, TSCHAR, and RCHAR) could become predictors of degree of technology transfer (TTDEG), a-nine predictor multiple linear regression model is proposed. The nine predictor variables are identified as TCT (X1), COMPLX (X2), SPEC (X3), ACAP (X4), RCOL (X5), PPROTEC (X6), TRANSCAP (X7), RELQLTY (X8), and MT (X9). The equation of the proposed multiple linear regression model is as follows: Y = 0 + 1 (X1) + 2 (X2) + 3 (X3)+ 4 (X4)+ 5 (X5) + 6 (X6) + 7 (X7) + 8 (X8)
Where, Y X1 X2 X3 X4 X5 X6 X7 X8 X9 0 1-9 = Degree of Technology Transfer (TTDEG), = Tacitness (TCT), = Complexity (COMPLX), = Specificity (SPEC), = Absorptive Capacity (ACAP), = Recipient Collaborativeness (RCOL), = Partner Protectiveness (PPROTEC), = Transfer Capacity (TRANSCAP), = Relationship Quality (RELQLTY), = Mutual Trust (MT), = Constant (Intercept), = Estimates (Regression coefficient), and = The error term.
+ 9 (X9) +

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To determine the best set of predictor variables in predicting TTDEG (Y), a standard multiple regression (Enter Method) was performed between TTDEG as the dependent variable and TCT (X1), COMPLX (X2), SPEC (X3), ACAP (X4), RCOL (X5), PPROTEC (X6), TRANSCAP (X7), RELQLTY (X8), and MT (X9) as the independent variables. Analysis was performed using SPSS REGRESSION and SPSS EXPLORE for evaluation of assumptions. The results revealed that TCT (X1), COMPLX (X2), ACAP (X4), RCOL (X5), PPROTEC (X6), and MT (X9) were excluded because these variables did not contribute in significance (TCT: t = -.886, p = .377; COMPLX: t = -1.162, p = .247; ACAP: t = .025, p = .980; RCOL: t = .793, p = .429; PPROTEC: t = -.346, p = .730; MT: t = -1.085, p = .280) to the variation of the dependent variable (TTDEG). As depicted in the coefficients table below (Table 5.8), the estimates of the model coefficients for 0 = 18.079, 3 = -.311, 7 = .662, and 8 = .297. Therefore, the estimated final model is as follows: Y (TTDEG) = 18.079 - .311 (X3) + .662 (X7) + .297 (X8)
Where, Y X3 X7 X8 0 = Degree of Technology Transfer (TTDEG), = Specificity (SPEC), = Transfer Capacity (TRANSCAP), = Relationship Quality (RELQLTY), = Constant (Intercept),
+

3, 7 & 8 = Estimates (Regression coefficient), and

= The error term.

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Table 5.8: Estimates of Coefficients for the Second TTDEG Model


Coefficients a Unstandardized Coefficients Model 1 (Constant) TCT COMPLX SPEC ACAP RCOL PPROTEC TRANSCAP RELQLTY MT a. Dependent Variable: TTDEG B 18.079 -.069 -.156 -.311 .002 .115 -.041 .662 .297 .106 Std. Error 5.462 .078 .134 .162 .086 .145 .119 .153 .073 .098 Standardized Coefficients Beta -.083 -.100 -.160 .003 .092 -.029 .469 .423 .146 t 3.310 -.886 -1.162 -1.925 .025 .793 -.346 4.331 4.048 1.085 Sig. .001 .377 .247 .050 .980 .429 .730 .000 .000 .280 Collinearity Statistics Tolerance .478 .568 .612 .349 .317 .609 .361 .388 .234 VIF 2.090 1.759 1.633 2.869 3.155 1.641 2.770 2.577 4.282

Note: R = 0.707, R = 0.500; Adj. R = 0.397

The models R-squared of 0.500 implies that the nine predictor variables explain about 50 % of the variance/variation in the TTDEG (Appendix I). This is quite a good and respectable result. The ANOVA table reveals that the F-statistics (F = 13.129) is medium and the corresponding p-value is highly significant (p = 0.0001) or lower than the alpha value of equal to zero confirming that there is a linear relationship between TTDEG and the nine predictor variables. However, due to poor fit between population data and the proposed model, only SPEC, TRANSCAP, and RELQLTY were identified in the final second model as significant predictors of TTDEG.

Table 5.8 above also reveals that among the three predictor variables that contributed in significance, the largest beta coefficient is 0.469 which is for TRANSCAP. It means this variable makes the strongest unique contribution in explaining the dependent variable (TTDEG), when the variance explained by other predictor variables in the model is 241

controlled for. It suggests that one standard deviation (SD) increase in TRANSCAP is followed by 0.469 standard deviation increase in TTDEG. The beta value for RELQLTY is the second highest (0.423). The beta value for SPEC is the smallest (-0.160) indicating that it made the least contribution. The negative sign indicates negative linear relationship between the predictor and the dependent variable. It means that one standard deviation (SD) increase in SPEC is followed by 0.160 standard deviation decrease in TTDEG.

Based on the collinearity diagnostic results below (Table 5.9), none of the model dimensions has condition index above the threshold of 30.0, none of the tolerance (T) value smaller than 0.10 and VIF statistics are less than 10.0 (Table 5.8). This indicates that there is no serious multicollinearity problem among the predictor variables of the model. Table 5.9: The Multicollinearity Diagnostic for the Second TTDEG Model
a Collinearity Diagnostics

Variance Proportions Model 1 Dimension 1 2 3 4 5 6 7 8 9 10 Eigenvalue 9.534 .193 .092 .053 .046 .030 .023 .012 .011 .010 Condition Index 1.000 7.026 10.176 13.411 14.424 17.974 20.526 27.802 28.386 29.855 (Constant) .00 .00 .00 .01 .00 .08 .07 .32 .47 .06 TCT .00 .00 .26 .00 .00 .05 .08 .26 .27 .08 COMPLX .00 .01 .00 .04 .08 .07 .46 .01 .16 .17 SPEC .00 .03 .00 .50 .20 .03 .06 .00 .18 .00 ACAP .00 .02 .02 .07 .12 .00 .16 .42 .04 .16 RCOL .00 .01 .03 .02 .01 .07 .00 .22 .64 .01 PPROTE C .00 .14 .02 .03 .44 .01 .12 .18 .03 .03 TRANSCAP .00 .03 .04 .02 .00 .49 .11 .09 .20 .01 RELQLTY .00 .00 .00 .02 .02 .07 .10 .07 .02 .49 MT .00 .00 .00 .00 .01 .01 .00 .14 .00 .72

a. Dependent Variable: TTDEG

The normal P-P plot of regression standardized residuals of Figure 5.3 below reveals that all observed values fell roughly along a straight line indicating that the residuals are from a normally distributed population.

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Figure 5.3: The Normal P-P plot of the Regression Standardized Residual for the Second TTDEG Model
Normal P-P Plot of Regression Standardized Residual

Dependent Variable: TTDEG

1.0

Expected Cum Prob

0.8

0.6

0.4

0.2

0.0 0.0 0.2 0.4 0.6 0.8 1.0

Observed Cum Prob

The scatterplot as depicted in Figure 5.4 below (standardized predicted values against observed values) indicates the relationship between the dependent variable and the predictors is linear and the residual variances are about equal or constant. Figure 5.4: The Scatterplot of Standardized Predicted Values vs. Observed Values for the Final Second TTDEG Model
Scatterplot

Dependent Variable: TTDEG


3

Regression Standardized Residual

-1

-2

-3 -3 -2 -1 0 1 2 3

Regression Standardized Predicted Value

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Thus, judging from the R-squared (R), the p and beta values of all the predictor variables, the non existence of multicollinearity problem between predictors, and the fact that the assumptions of normality, equality of variance and linearity are all met, hence, it is reasonable to conclude that the estimated multiple regression for the final second model to explain TTDEG proposed by this study is quite stable, good and reliable. Although the proposed second model had a poor fit between the population data and the proposed model, however, based on the final second model it reveals that three out of nine predictor variables (SPEC, TRANSCAP, and RELQLTY) are identified as significant predictors of TTDEG. Thus, given the above results, Hypothesis H5a is not supported.

Based on the multiple regression results, only slightly more than thirty percent of the subvariables included in the second model are good, strong and reliable predictors of TTDEG (SPEC, TRANSCAP and RELQLTY). The other sub-variables (TCT, COMPLX, ACAP, RCOL, PPROTEC, and MT), although have been extensively emphasized by literature of their significance, are not supported by the population data. However, since the empirical studies on inter-firm TT are scarce, the advancement of this model and its outcomes extend the findings made by Yin and Bao (2006) and Hau and Evangelista (2007) in such that this model 1) simultaneously examines the relationships between nine sub-variables which represent each group of TTCHAR, and TTDEG, and 2) it predicts SPEC, TRANSCAP, and RELQLTY (sub-variables of TTCHARS) as significant predictors of TTDEG. As the model consists of multi sub-variables, it is considered quite robust; where there is a possibility that when all the sub-variables are added together in the model some important variables might have lost their significance effects (Minbaeva, 2007; Simonin, 1999a).

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5.8 Relationship between TTDEG and LFP This section presents the results of relationships between TTDEG and LFP and its two dimensions: corporate performance (CPERF) and human resource performance (HRPERF) (Research Question 3). Similar to section 5.3, 5.4, 5.5, and 5.6 above, the relationships were examined using Pearsons Product Moment Correlations. Preliminary analyses were conducted to ensure there was no violation of the assumptions of normality, linearity and homoscedasticity. The linear relationships, which are highlighted in the conceptual framework (section 3.3), seek to test H6, H6a, and H6b.

Table 5.10 below indicates that there is a strong significant positive linear correlation between the overall TTDEG (measured by the TTDEGQ) and LFP (measured by the LFPQ) [r = .735, n = 128, p < .0005] with high TTDEG associated with high degree of LFP. In explaining the variance, the coefficient of determination (r = .73) indicates that the proportion variance in LFP is explained by 53.3% of the variance in TTDEG. This is a good and respectable amount of variance explained. Thus, given the above relationship, Hypothesis H6 is supported. Table 5.10: Pearson Correlation Coefficients of TTDEG and LFP and its Dimensions
Variables X Y X Y1 TTDEG LFP TTDEG CPERF X 1.000 .735** 1.000 .674**

X TTDEG 1.000 Y2 HRPERF .735** ** Correlation is significant at 0.01 level (1-tailed) * Correlation is significant at 0.05 level (1-tailed) Correlation is significant at 0.10 level (1-tailed)

N = 128

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5.8.1 Relationships between TTDEG and Dimensions of LFP This section reports the results of relationships between TTDEG and dimensions of LFP: CPERF and HRPERF. The relationships were examined using Pearsons Product Moment Correlation. Preliminary analyses were conducted to ensure that there was no violation of the assumptions of normality, linearity and homoscedasticity.

5.8.1.1 TTDEG and CPERF Table 5.10 above shows that there is a strong significant positive linear correlation between TTDEG and CPERF [r = .674, n = 128, p < .0005], which explains that high TTDEG associated with high degree of CPERF. In explaining the variance, the coefficient of determination (r = .67) indicates that the proportion variance in CPERF is explained by 44.8% of the variance in TTDEG. This is a good and respectable amount of variance explained. Thus, given the above relationship, Hypothesis H6a is supported.

5.8.1.2 TTDEG and HRPERF Table 5.10 above shows that there is a strong significant positive linear correlation between TTDEG and HRPERF [r = .735, n = 128, p < .0005], which explains that high TTDEG associated with high degree of HRPERF. In explaining the variance, the coefficient of determination (r = .73) indicates that the proportion variance in HRPERF is explained by 53.3% of the variance in TTDEG. This is a good and respectable amount of variance explained. Thus, given the above relationship, Hypothesis H6b is supported.

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The above results indicate that TTDEG has a strong positive effect on the overall local firms performance (LFP) and the results are statistically significant (p value = 0.0001). The results are also statistically significant for both LFPs dimensions, namely 1) corporate performance (CPERF) (p value = 0.0001) and 2) human resource performance (HRPERF) (p value = 0.0001). The results suggest that the higher the TTDEG the greater the LFP, CPERF, and HRPERF. The results are consistent with the findings in the previous literature which suggests that both tacit (TCTK) and explicit (EXPK) degrees are capable of causing the increase of both CPERF and HRPERF performances (Lane et al., 2001; Lyles and Salk, 1996; Yin and Bao, 2006; Tsang et al., 2004).

The results also suggest that 1) a higher degree of TCTK and EXPK is capable of facilitating CPERF in terms of positively improving and increasing the local firms business volume, market share, planned goals, and profit, and 2) a higher degree of TCTK and EXPK is capable of facilitating HRPERF in terms of positively improving the local firms product/service quality, employees productivity, managerial techniques/skills, and operational efficiency (Dhanaraj et al., 2004). Interestingly, the results for the effect of TTDEG on LFP have extended the findings in Dhanaraj et al. (2004); where tacit knowledge has a significant effect on IJV performance. The results provide empirical evidence that TTDEG can contribute to an overall increase in the local firms performance. Comparable to other formal market channels such as direct exporting of capital goods, foreign direct investments (FDIs) and licensing agreements, this study provides new empirical evidence; where the JVs formed between foreign MNCs and local companies indeed have significant positive effects on LFP. The results, however, are not in line with recent findings by

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Malairaja and Zawdie (2004); where their general findings suggest that the TT through JVs in Malaysia have not succeeded in developing the indigenous innovation capabilities. The empirical data in the present study reveals that TTDEG, which includes both TCTK and EXPK, significantly affected both CPERF and HRPERF where the relationships show strong significant positive effects (p < 0.0005). This is particularly evident with the significant effect of TTDEG on the HRPERF. The results imply that TTDEG is most likely to contribute significantly to local firms product/service quality, employees productivity, managerial techniques and operational efficiency.

The significant effect of TTDEG on HRPERF in improving product quality and employees productivity will positively boost local innovation capabilities when the local employees absorptive capacity, which is reflected in the employees prior related knowledge and intensity of effort, is capable of absorbing, assimilating, and improving new technologies extracted from JVs. The results are consistent with the previous TT literature findings where substantial TT has positively led to a higher potential of innovation performance/capabilities (Guan et al., 2006; Kotabe et al., 2007), an increase in the technological capabilities and competitiveness (Madanmohan et al., 2004; Liao and Hu, 2007; Rodriguez and Rodriguez, 2005), and enhancement of organizational learning (Inkpen, 2000) of the local recipients. The results also extend the KT literature in particular the general findings made by Minbeava (2007), Pak and Park (2004), and Hau and Evangelista (2007) on the overall significant effects of knowledge transfer and acquisition on JVs performance. Thus, the results have specifically provided empirical evidence on the significant effect of TTDEG on LFP and its two dimensions (CPERF and HRPERF).

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Interestingly, the empirical data also reveal that in terms of level of significance, TTDEG shows a slightly higher significant effect on HRPERF (p < 0.0005; r = 0.735) than CPERF (p < 0.0005; r = 0.674). This suggests that the higher the TTDEG the greater the improvement on the HRPERF than CPERF. The results further suggest that the main objective of the local companies participating in JVs is largely driven by their efforts to improve the product/service quality, employees productivity, managerial techniques, and operational efficiency. The results in this respect support the findings made by Lyles and Salk (1996) and Lane et al. (2001); where knowledge acquisition from the foreign parent has significantly affected business and human resource performance. Moreover, the results are also consistent with OL literature which views technology recipient organizations as a learning system and TT as an organizational learning process (Daghfous, 2004; Bapuji and Crossan, 2004).

5.9 On the Moderating Effects of MNCSIZE, JVAGE, MNCCOO and MNCIND As proposed in section 3.3 above, this study also examines/tests whether the moderating variables such as MNCs size (MNCSIZE), age of JVs (JVAGE), MNCs country of origin (MNCCOO), and MNCS types of industry (MNCIND) could moderate the relationship between the technology transfer characteristics (TTCHARS) and degree of technology transfer (TTDEG). Using the Moderated Multiple Regressions (MMR) analysis, the proposed moderating effect of these variables were analyzed by interpreting 1) the R change in the models obtained from the model summaries, and 2) the regressions coefficients for the product term obtained from the coefficients tables. Prior to conducting the MMR analysis, preliminary analyses were conducted to ensure that there was no violation of the assumptions

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of normality, linearity, homoscedasticity, and homogeneity of error variance. The population data was carefully examined to avoid the occurrence of 1) Type 1 error; which is the error of rejecting the true null hypotheses at a specified power (), and 2) Type 2 error (); which is the error of failing to reject a false null hypotheses at a specified power () (Aguinis, 2004). In this study, as discussed in section 4.12.5, Equation 5.1 below is used to represent the variables in the MMR model. The MMR model is reproduced as follows: Equation 5.1: Y = 0 + 1X+ 2Z + 3X*Z +

Where, Y X Z 0 1 2 3 = Degree of Technology Transfer (The Dependent Variable), = Technology Transfer Characteristics, = A hypothesized binary grouping moderator,

X*Z = The product between the predictors, = The intercept of the line-of-best-of-fit which represents the value of Y when X = 0, = The least-squares estimate of the population regression coefficient for X, = The least-squares estimate of the population regression coefficient for Z, = The sample-base least-squares estimates of the population regression coefficient for the product term, and = The error term.

To determine the presence of moderating effects, the MMR model is then compared with the ordinary least-squares (OLS) model. Equation 5.2 below represents the OLS model and is mathematically described as follows:

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Equation 5.2 Y = 0 + 1X+ 2Z +


Where, Y = Degree of Technology Transfer (The Dependent Variable), X = Technology Transfer Characteristics, Z = A hypothesized binary grouping moderator, 0 = The intercept of the line-of-best-of-fit represents the value of Y when X = 0, 1 = The least-squares estimate of the population regression coefficient for X, 2 = The least-squares estimate of the population regression coefficient for Z, and = The error term.

As indicated above, each of the moderating variable (the product term) is a binary grouping moderator in which the moderating variables are coded using the dummy coding system: 1) for MNCSIZE: 0 = large MNCs and 1 = medium/small MNCs, 2) for JVAGE: 0 = old JVs and 1 = young JVs, 3) for MNCCOO: 0 = Western MNCs and 1 = Asian MNCs, and 4) for MNCIND: 0 = manufacturing industry and 1 = service industry. The coding system is recommended in the situations where the binary moderators are involved. This is due to its simplicity and ease of interpretation of results when making comparisons between different groups (Aguinis, 2004). These moderating variables were tested individually to determine their effects in the relationship between TTCHARS and TTDEG.

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5.9.1 Moderating Effect of Size of MNCs (MNCSIZE) This section presents results of the proposed moderating effect of MNCSIZE in the relationship between TTCHARS and TTDEG (as part of Research Question 4). The inclusion of MNCSIZE as a moderating variable in the relationship seeks to test Hypothesis H7. Table 5.11 below shows that for Model 1, R = .597, R = .356 and [F (2, 125) = 34.525, p = .0001]. This R means that 35.6% of the variance in the TTDEG is explained by TTCHARS scores and MNCSIZE. Table 5.11: Model Summary - MNCSIZE
Change Statistics Model R R Square Adjusted R Squared .346 .384 Std. Error of the Estimate 8.45670 8.20372 R Square Change .356 .043 F Change 34.535 27.401 df1 df2 Sig. F Change .000 .000

1 2

.597 .631

.356 .399

2 1

125 124

a. Predictors: (Constant), MNCSIZE, TTCHARS b. Predictors: MNCSIZE, TTCHARS, TTCHARS*MNCSIZE c. Dependent Variable: TTDEG

Model 2 shows the results after the product term (TTCHARS*MNC SIZE) was included in the equation. Table 5.11 above shows that the inclusion of the product term results in an R change of .043, [F (1, 124) = 27.401, p < 0.001]. The results support the presence of a significant moderating effect. To put it differently, the moderating effect of MNCSIZE explains 4.3% variance in the TTDEG above and beyond the variance by TTCHARS scores and MNCSIZE. Thus, it can be concluded that hypothesis H7 is supported.

The Coefficients table as shown in Table 5.12 below depicts the results of the regressions equation for Model 1 and Model 2 as follows:

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Table 5.12: Coefficients Table: MNCSIZE


Unstandardized Coefficients B Model 1 (Constant) TTCHARS MNCSIZE 2 (Constant) TTCHARS MNCSIZE TTCHARS*MNCSIZE 15.090 .102 -4.013 -3.182 .150 26.664 -.084 Std. Error 5.533 .014 1.564 8.163 .021 10.436 .028 .773 1.258 -1.425 .524 -.189 Standardized Coefficients Beta t 2.727 7.096 -2.565 -.390 7.008 2.555 -2.971 Sig. .007 .000 .011 .697 .000 .012 .000 95% Confidence Interval for B Lower Bound 4.140 .073 -7.109 -19.339 .108 6.009 -.140 Upper Bound 26.040 .130 -.917 12.974 .193 47.319 -.028

a. Dependent Variable: Degree of Technology Transfer

Model 1 indicates that TTCHARS is statistically significant at the p < 0.0001 level and MNCSIZE is also statistically significant at p < 0.01 level, respectively. Equation 5.3 below shows that for a 1- point increase in TTCHARS, TTDEG is predicted to have a difference by .102 given that MNCSIZE is held constant. The regression coefficient associated with MNCSIZE means that the difference in TTDEG between large and medium/small MNCs is 4.013, given that TTCHARS is held constant. Equation 5.3: TTDEG = 15.090 + .102TTCHARS - 4.013MNCSIZE The high-order of interaction effects of the MMR test was conducted to differentiate the extent of degree of TT influenced by large and medium/small MNCs. Model 2 shows the results after the product term (TTCHARS*MNC SIZE) is included in the equation. As indicated in Table 5.11 above the inclusion of product term resulted in an R change of .043,

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[F (1, 124) = 27.401, p < 0.001]. The results support the presence of a significant moderating effect of MNCSIZE.

Table 5.12 above also reveals information on the regression coefficients after the inclusion of product term in the equation. The equation for model 2 is as follows: Equation 5.4: TTDEG = -3.182 + 0.150TTCHARS + 26.664MNCSIZE - .084TTCHARS*MNCSIZE

As indicated above, the interpretation of the regression coefficients is based on the fact that the binary moderator is coded using the dummy code system. The result for Model 2 indicates that for a 1-point increase in TTCHARS, TTDEG is predicted to have a difference by .150, given that MNCSIZE is held constant. The interpretation of the regression coefficients for the product term in Equation 5.4 is that there is a -.084 difference between the slope of TTDEG on TTCHARS between large MNCs and medium/small MNCs. In other words, the slope regressing TTDEG on TTCHARS is steeper for medium/small MNCs as compared to large MNCs. The TTCHARS and TTDEG relationship for large and medium/small MNCs is shown in Figure 5.5 below. From the descriptive table (Appendix J), the value of the mean score for TTCHARS is 6.13 and the standard deviation (SD) is .91. Following Aguinis (2004), the value 1 SD above the mean is 7.04 and the value 1 SD below the mean is 5.22. Thus, using the value of 1 SD above and below mean in Equation 5.4 yields the graph as shown in Figure 5.5. Results based on Equation 5.4 lead to the conclusion that there is a significant moderating effect of MNCSIZE. Figure 5.5 below shows that the TTCHARSTTDEG relationship is stronger (i.e. steeper slope) for medium/small MNCs as compared to large MNCs. 254

Figure 5.5: Slopes for TTDEG on TTCHARS for MNCSIZE

30 25 20 15 10 5 0 -5

Low TTDEG (1 SD below mean) medium and small MNCs

High TTDEG (1 SD above mean) large MNCs

The above results indicate that size of MNCs (MNCSIZE) has a significant moderating effect in the relationship between technology transfer characteristics (TTCHARS) and degree of technology transfer (TTDEG) (R = 0.43). The results (Appendix J) suggest that the inclusion of MNCSIZE (large vs. medium/small MNCs) in the relationship has a significant moderating effect in changing degree/volume of technology transfer for both degree of tacit (TCTK) and explicit (EXPK) knowledge. The moderating effect of MNC SIZE is shown to be capable of changing the nature of TTCHARS-TTDEG relationship and further explains under what conditions TTCHARS causes TTDEG. The results also suggest that although 255

TTCHARS have significant effects on TTDEG, however the effects alone do not sufficiently explain TTDEG better. In other words the effect of TTCHARS on TTDEG is indeed not conclusive. The presence of MNCSIZE (large and medium/small MNCs) has a significant moderating effect in changing the volume/degree of technology transfer thus exceeding the significant linear relationship between TTCHARS and TTDEG (p < 0.05). This is not surprising given the fact that MNCSIZE receives strong and extensive theoretical support in the literature (Hagedoorn and Schakenraad, 1994; Glaister and Buckley, 1996; Hoskisson et al., 1994).

The presence of significant moderating effect indicates that size of MNCs in JVs is an important variable that could further explain TTDEG. As one of the key findings in this study, the results suggest that MNCSIZE whether large or medium/small MNCs, has been established to provide a significant moderating impact on degree of TT in IJVs. The slopes for TTDEG on TTCHARS for large and medium/small MNCs signify the presence of a significant moderating effect of MNCSIZE. The results provide critical information in such that although transferring technologies in IJVs requires that the JV partners to have 1) sufficient prior related knowledge about the suppliers technologies and their intensity of effort in organizational learning, where the recipient partners have the ability to assimilate and exploit new knowledge (Cohen and Levinthal, 1990; Hamel, 1991) 2) collaborative learning intent, which could encourage more openness and transparency on part of the supplier partners to share and transfer more technology (Inkpen, 2000), 3) frequent and effective interactions between partners, openness, spontaneous, and adequacy of communication; which could create potentials for numerous individual exchanges between

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the JV partners (Szulanski, 1996; Lin, 2005; Inkpen, 2000), and 4) low suspicious feelings between partners in JVs; which could create opportunities for close interactions, increase confidence that both partners would not take advantage of each other, and promote transparency (Kale et al., 2000), nevertheless, possibly due to the nature of knowledge; which is highly tacit, complex and firm-specific both large and medium/small MNCs are unlikely to transfer higher degrees of both tacit and explicit technologies in IJVs.

Although medium/small MNCs in IJVs are more likely to compromise with local partners in terms of equity ownership to maintain a balanced bargaining power, however, due to their limited resources, expertise and lack of IJVs experience they are most unlikely to transfer a higher degree of tacit and explicit knowledge than large MNCs; particularly if the transfer involves technologies which formed the strategic valuable resources, competencies and source of sustainable competitive advantage of the MNCs (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel, 1990). On the other hand, even though large MNCs are known for having an abundant supply of resources, expertise and have more experience to undertake technology transfer in IJVs, nevertheless, due to their inherent advantage, high bargaining power and being less dependent on local partners they are also unlikely to transfer a higher degree of technology to local partners. Large MNCs have the tendency to treat their JVs as one-way learning processes thus having little to share with local partners (Liu and Vince, 1999; Danis and Park, 2002). As learning in IJVs is asymmetrical, large MNCs consider learning as mainly the task of the knowledge-disadvantaged local partners (Lin, 2005). The MNCs from the developed countries would frequently request for a bigger equity ownership to increase their bargaining power and have full control of the

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systems, methods and decisions in the JVs (Makhija and Ganesh, 1997). Large MNCs typically choose JVs as a vehicle towards gaining knowledge and information on local business, economics and political stability (Sinha, 2001). In this sense, large MNCs possibly will limit the transfer of technology to local partners by protecting their proprietary technologies and competencies in order to maintain their dominance (Taylor, 1995). The results further support and extend the empirical findings by Simonin (1997), Simonin (2004), Dhanaraj et al. (2004) and Bresman et al. (1999). The findings have specifically extended technology transfer literature by offering new insight and empirical evidence that MNCSIZE moderates the relationship between TTCHARS and degree of tacit and explicit knowledge.

5.9.2 Moderating Effect of Age of JVs (JVAGE) This section presents the results of the proposed moderating effect of JVAGE in the relationship between TTCHARS and TTDEG (as part of Research Question 4). The inclusion of JVAGE as a moderating variable in the relationship seeks to test Hypothesis H8. Table 5.13 below shows that for Model 1, R = .622, R = .386 and [F (2, 125) = 39.355, p = .0001]. This R means that 38.6% of the variance in the TTDEG is explained by TTCHARS scores and JVAGE. Table 5.13: Model Summary - JVAGE
Change Statistics Model R R Square Adjusted R Squared .377 .372 Std. Error of the Estimate 8.25376 8.28559 R Square Change .386 .000 F Change 39.355 .041 df1 df2 Sig. F Change .000 .839

1 2

.622 .622

.386 .387

2 1

125 124

a. Predictors: (Constant), JVAGE, TTCHARS b. Predictors: JVAGE, TTCHARS, TTCHARS*JVAGE. c. Dependent Variable: TTDEG.

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Model 2 shows the results after the product term (TTCHARS*JVAGE) is included in the equation. Table 5.13 above shows that the inclusion of the product term resulted in an R change of .000 [F (1, 124) = 0.041, p > 0.001]. The results do not support the presence of a significant moderating effect. To put it differently, the moderating effect of JVAGE explains 0.0% variance in TTDEG above and beyond the variance by TTCHARS scores and JVAGE . Thus, it can be concluded that hypothesis H8 is not supported.

The Coefficients table as shown in Table 5.14 below depicts the results of the regression equation for Model 1 and Model 2 as follows: Table 5.14: Coefficients Table: JVAGE
Unstandardized Coefficients B Model 1 (Constant) TTCHARS JVAGE 2 (Constant) TTCHARS JVAGE TTCHARS*JVAGE 13.433 .106 -5.327 14.171 .104 -7.441 -.006 Std. Error 5.094 .014 1.470 6.272 .017 10.506 .029 .537 -.356 .102 .548 -.255 Standardized Coefficients Beta t 2.637 7.792 -3.624 2.259 6.167 -.708 .203 Sig. .009 .000 .000 .026 .000 .480 .839 95% Confidence Interval for B Lower Bound 3.352 .079 -8.236 1.756 .071 -28.235 -.051 Upper Bound 23.514 .134 -2.417 26.568 .138 13.353 .063

a. Dependent Variable: Degree of Technology Transfer

Model 1 indicates that both TTCHARS and JVAGE are statistically significant at the p < 0.001 level, respectively. Equation 5.5 below shows that for a 1-point increase in TTCHARS, TTDEG is predicted to have a difference by .106 given that JVAGE is held constant. The

259

regression coefficients associated with JVAGE means that the difference in TTDEG between young and old JVs is -5.327, given that TTCHARS is held constant. Equation 5.5: TTDEG = 13.433 + .106TTCHARS - 5.327JVAGE

The high-order interaction effects of the MMR test was conducted to differentiate the extent of degree of TT influenced by young and old JVs. Model 2 shows the results after the product term (TTCHARS*JVAGE) is included in the equation. As indicated in Table 5.13 above the inclusion of product term resulted in an R change of .000 [F (1, 124) = 0.041, p > 0.001]. The results do not support the presence of a significant moderating effect. Table 5.14 above also reveals information on the regression coefficients after the inclusion of product term in the equation of Model 2. The equation for model 2 is as follows: Equation 5.6: TTDEG = 14.171 + .104TTCHARS -7.441JVAGE - .006TTCHARS*JVAGE

As indicated above, the interpretation of the regression coefficients based on the fact that the binary moderator was coded using the dummy code system. The result for Model 2 indicates that for a 1-point increase in TTCHARS, TTDEG is predicted to have a difference of .104, given that JVAGE is held constant. The interpretation of the regression coefficients for the product term in Equation 5.6 is that there is only a -.006 difference between the slope of TTDEG on TTCHARS between young and old JVs. In other words, the slope regressing TTDEG on TTCHARS is steeper for young JVs as compared to old JVs by .006 TTDEG standard deviation units.

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The TTCHARS and TTDEG relationship for young and old JVs is shown in Figure 5.6 below. The value of the mean score for TTCHARS is 6.13 and the standard deviation (SD) is .91. Following Aguinis (2004), the values 1 SD above the mean is 7.04, and the value 1 SD below the mean is 5.22. Thus, using the value of 1 SD above and below in Equation 5.6 yields the graph shown in Figure 5.6. Results based on Equation 5.6 led to the conclusion that there was no significant moderating effect of JVAGE . Nevertheless, although insignificant Figure 5.6 below shows that the TTCHARS-TTDEG relationship is stronger (i.e. steeper slope) for young JVs as compared to old JVs. Figure 5.6: Slopes for TTDEG on TTCHARS for JVAGE

30 25 20 15 10 5 0 -5

Low TTDEG (1 SD below mean) young JVs

High TTDEG (1 SD above mean) old JVs

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The results indicate that age of JV (JVAGE) has no significant moderating effect on the relationship between TTCHARS and TTDEG (R = 0.000). The results (Appendix J) suggest that the inclusion of JVAGE (old and young JVs) in the relationship has no significant effect in changing the degree/volume of technology transfer for both degrees of tacit (TCTK) and explicit (EXPK) knowledge. JVAGE is shown to be not capable of changing the nature of TTCHARS-TTDEG relationship and explain further in what conditions TTCHARS causes TTDEG. This could be caused by the strong significant effects of all TTCHARS (KCHARS, TRCHAR, TSCHAR, and RCHAR) on TTDEG. The results suggest that the effect of TTCHARS on TTDEG alone did sufficiently explain TTDEG indicating that JVAGE has failed to moderate the relationship since the effect of TTCHARS on TTDEG was conclusive. However, the findings are rather interesting given the fact that several studies have found that JVAGE is significant in moderating the relationship between ambiguity and knowledge transfer, and between tacitness and ambiguity of knowledge transfer (Simonin, 1999a, 2004).

From the strategic alliance literature JVAGE, which also has a strong theoretical foundation, is found to have a significant effect on cultural distance (Meschi, 1997), inter-partner trust (Gulati, 1995), relative bargaining power (Yan and Gray, 1994) and alliance partners personal attachment (Inkpen and Beamish, 1997). The results are, nevertheless, in line with empirical findings by Tsang et al. (2004) where JVAGE do not significantly moderate the relationship between knowledge acquisition in JV and performance. The results have

specifically extended existing literature by providing new insight and empirical evidence; where JVAGE does not moderate TTCHARS-TTDEG relationship.

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In this study the population data suggests that JVAGE (old and young JVs) does not moderate the relationship between TTCHARS and TTDEG; where the strength of the relationship does not increase with the presence of JVAGE. The plausible explanation is that although JV is frequently being perceived as a race to learn; which can threaten the stability of JVs, the JV companies in the sample population are considered quite stable as evidenced by the significant effect of RCHAR on TTDEG. From the results, age of JV is not likely to contribute to 1) a shift in the supplier partners bargaining power thus resulting in the elimination of the recipient partner dependency (Inkpen and Beamish, 1997) and 2) changes in knowledge acquisition outcomes (Lin, 2005)

5.9.3 Moderating Effect of Country of Origin (MNCCOO) This section presents the results of the proposed moderating effect of MNCCOO in the relationship between the TTCHARS and TTDEG (as part of Research Question 4). The inclusion of MNCCOO as a moderating variable in the relationship seeks to test Hypothesis H9. Table 5.15 below shows that for Model 1, R = .578, R = .334 and [F (2, 125) = 31.353, p = .0001]. This R means that 33.4% of the variance in TTDEG is explained by TTCHARS scores and MNCCOO. Table 5.15: Model Summary - MNCCOO
Change Statistics Model R R Square Adjusted R Squared .323 .324 Std. Error of the Estimate 8.59846 8.59206 R Square Change .334 .006 F Change 31.352 1.186 df1 df2 Sig. F Change .000 .278

1 2

.578 .583

.334 .340

2 1

125 124

a. Predictors: (Constant), MNCCOO, TTCHARS b. Predictors: MNCCOO, TTCHARS, TTCHARS*MNCCOO. c. Dependent Variable: TTDEG

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Model 2 shows the results after the product term (TTCHARS*MNC COO) was included in the equation. Table 5.15 shows that the inclusion of the product term resulted in an R change of .006 [F (1, 124) = 1.186, p > 0.0001]. The results do not support the presence of a moderating effect. To put it differently, the moderating effect of MNCCOO only explains 0.6% variance in TTDEG above and beyond the variance by TTCHARS scores and MNC COO. Thus, it can be concluded that hypothesis H9 is not supported.

The Coefficients table as shown in Table 5.16 below depicts the results of the regressions equation for Model 1 and Model 2 as follows: Table 5.16: Coefficients Table: MNCCOO
Unstandardized Coefficients Standardized Coefficients 95% Confidence Interval for B

Model 1 (Constant) TTCHARS MNCCOO 2 (Constant) TTCHARS MNCCOO TTCHARS*MNCCOO

B 9.913 .107 2.365 6.371 .117 15.033 -.034

Std. Error 5.196 .014 1.567 6.126 .017 11.737 .032

Beta

t 1.908

Sig. .059 .000 .134 .300 .000 .203 .278

Lower Bound -.370 .078 -.736 -5.755 .083 -8.197 -.097

Upper Bound 20.196 .135 5.467 18.497 .151 38.263 .028

.550 .112

7.435 1.509 1.040

.601 .709 -.613

6.859 1.281 -1.089

a. Dependent Variable: Degree of Technology Transfer

Model 1 indicates that TTCHARS is statistically significant at the p < 0.0001 level; however MNCCOO is not statistically significant (p > 0.001). Equation 5.7 below shows that for a 1point increase in TTCHARS, TTDEG is predicted to have a difference of .107 given that

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MNCCOO is held constant. The regressions coefficient associated with MNC COO means that the difference in TTDEG between Asian and Western MNCs is 2.365, given that TTCHARS is held constant. Equation 5.7: TTDEG = 9.913 + .107TTCHARS + 2.365MNCCOO The high-order of interaction effects of the MMR test was conducted to differentiate the extent of degree of TT influenced by Asian and Western MNCs. Model 2 shows the results after the product term (TTCHARS*MNC COO) was included in the equation. As indicated in Table 5.15 above the inclusion of product term resulted in an R change of .006 [F (1, 124) = 1.186, p > 0.001]. The results do not support the presence of a significant moderating effect. Table 5.16 also reveals information on the regression coefficients after the inclusion of product term in the equation of Model 2. The equation for model 2 is as follows: Equation 5.8: TTDEG = 6.371 + .117TTCHARS + 15.033MNCCOO -.034TTCHARS*MNCCOO

As indicated above, the interpretation of the regression coefficients is based on the fact that the binary moderator is coded using the dummy code system. The result for Model 2 indicates that for a 1-point increase in TTCHARS, TTDEG is predicted to have a difference of .117, given that MNCCOO is held constant. The interpretation of the regression coefficients for the product term in Equation 5.8 is that there is only a -.034 difference between the slope of TTDEG on TTCHARS between Asian and Western MNCs. In other words, the slope regressing TTDEG on TTCHARS is steeper for Asian MNCs as compared to Western MNCs by .034 TTDEG standard deviation units.

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The TTCHARS and TTDEG relationship for Asian and Western MNCs is shown in Figure 5.7 below. The value of the mean score for TTCHARS is 6.13 and the standard deviation (SD) is .91. Following Aguinis (2004), the value 1 SD above mean is 7.04 and the value 1 SD below mean is 5.22. Thus, using the value of 1 SD above and below mean in Equation 5.6 yields the graph shown in Figure 5.7. Results based on Equation 5.8 lead to the conclusion that there is no significant moderating effect of MNC COO. Nevertheless, although insignificant, Figure 5.7 below shows that the TTCHARS-TTDEG relationship is stronger (i.e. steeper slope) for Asian MNCs as compared to Western MNCs. Figure 5.7: Slopes for TTDEG on TTCHARS for MNCCOO

30 25 20 15 10 5 0 -5

Low TTDEG (1 SD below mean) Asian MNCs

High TTDEG (1 SD above mean) Western MNCs

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The results indicate that the MNCs country of origin (MNC COO) has no significant moderating effect in the relationship between technology transfer characteristics (TTCHARS) and degree of technology transfer (TTDEG) (R = 0.006). The results (Appendix J) suggest that the inclusion of MNC COO (Western and Asian MNCs) in the relationship has no significant moderating effect in changing the degree/volume of TT for both degree of tacit (TCTK) and explicit (EXPK) knowledge. The MNC COO is shown not capable of changing the nature of TTCHARS-TTDEG relationship and explain further in what conditions TTCHARS causes TTDEG. The results suggest that the effect of TTCHARS on TTDEG alone did sufficiently explain TTDEG; where MNCCOO has failed to moderate the relationship due to strong significant effects of all TTCHARS (KCHAR, TRCHAR, TSCHAR, and RCHAR) on TTDEG. Thus, the presence of MNCCOO in the relationship is unable to significantly change the volume/degree of TT.

The findings are rather interesting given the fact that few studies have found inconsistent results on the effect of MNCCOO as moderating variable for example: 1) MNCCOO is insignificant in moderating the relationships between supplier, recipient factors and tacit knowledge acquisition (Yin and Bao, 2006), and 2) MNCCOO is significant in the relationship between ambiguity and knowledge transfer, and between tacitness and ambiguity of knowledge transfer (Simonin, 1999a, 2004). Based on the previous literature, MNC COO which has a strong theoretical foundation is considered as capable of significantly affecting the propensities of MNCs choice of global strategies (Bartlett and Ghoshal, 1989), the organizational structures and control systems (Egelhoff, 1984), the internal organizational corporate culture (Yip et al., 1994), the partners learning and protection of proprietary assets

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in an alliance (Kale et al., 2000) and how MNCs operate (Gupta and Govindarajan, 2000). Thus, since MNCCOO is closely associated with problems related to cultural differences, opinions, beliefs, language, and educational background, it can directly affect interorganizational learning and knowledge transfer (Mowery et al., 1996). Although previous findings are rather inconsistent, however, the results support and confirm Yin and Baos (2006) recent findings; where MNCCOO do not significantly moderate the relationship between the supplier-side individual level, recipient-side factors, and acquisition of tacit knowledge. Nonetheless, although the results are not in line with the earlier findings by Simonin (1999a, 2004) they have specifically extended existing literature by offering new insight and empirical evidence; where MNCCOO does not moderate the relationship between TTCHARS-TTDEG.

The plausible explanation for the results is that although there are asymmetries in the transparency level between Western and Asian MNCs, which is largely attributed to the cultural openness of the Western MNCs as compared to the Asian MNCs (Hamel, 1991), the nationality of MNCs has no significant moderating effect in determining the volume of TT by the supplier possibly because 1) the JV partners in the population sample are reasonably transparent in sharing technology/knowledge between them resulting in more technology being transferred to the recipient partner, 2) the collaborative nature of the JVs encourages more close, frequent, and quality interactions between partners, and 3) the existence of stability in JVs which was due to high mutual trust and understanding between JV partners.

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5.9.4 Moderating Effect of Types of Industry (MNCIND) This section presents the results of the proposed moderating effect of MNCIND in the relationship between TTCHARS and TTDEG (as part of Research Question 4). The inclusion of MNCIND as a moderating variable in the relationship seeks to test Hypothesis H10. Table 5.17 below shows that for Model 1, R = .567, R = .322 and [F (2, 125) = 29.690, p = .0001]. This R means that 32.2% of the variance in the TTDEG is explained by TTCHARS scores and MNCIND. Table 5.17: Model Summary - MNCIND
Change Statistics Model R R Square Adjusted R Squared .311 .307 Std. Error of the Estimate 8.67560 8.70515 R Square Change .322 .001 F Change 29.690 .153 df1 df2 Sig. F Change .000 .696

1 2

.567 .568

.322 .323

2 1

125 124

a. Predictors: (Constant), MNCIND, TTCHARS b. Predictors: MNCIND, TTCHARS, TTCHARS*MNCIND. c. Dependent Variable: TTDEG

Model 2 shows the results after the product term (TTCHARS*MNC IND) was included in the equation. Table 5.17 above shows that the inclusion of the product term resulted in an R change of .001 [F (1, 124) = .153, p > 0.001]. The results do not support the presence of a significant moderating effect. To put it differently, the moderating effect of MNC IND only explains 0.1% variance in TTDEG above and beyond the variance by TTCHARS scores and MNCIND. Thus, it can be concluded that hypothesis H10 is not supported.

The Coefficients table as shown in Table 5.18 below depicts the results of the regressions equation for Model 1 and Model 2 as follows: 269

Table 5.18: Coefficients Table: MNCIND


Unstandardized Coefficients B Model 1 (Constant) TTCHARS MNCIND 2 (Constant) TTCHARS MNCIND TTCHARS*MNCIND 9.595 .110 .260 7.992 .115 4.470 -.012 Std. Error 5.243 .014 1.669 6.670 .018 10.895 .030 .590 .198 -.191 .567 .011 Standardized Coefficients Beta t 1.830 7.682 .156 1.198 6.245 .410 -.391 Sig. .070 .000 .876 .233 .000 .682 .696 95% Confidence Interval for B Lower Bound -.781 .082 -3.043 -5.210 .078 -17.095 -.070 Upper Bound 19.972 .139 3.563 21.194 .151 26.035 .047

a. Dependent Variable: Degree of Technology Transfer

Model 1 indicates that TTCHARS is statistically significant at the p < 0.001 level; however MNCIND is not statistically significant. Equation 5.9 below shows that for a 1-point increase in TTCHARS, TTDEG is predicted to have a difference of .110 given that MNC IND is held constant. The regression coefficients associated with MNC IND means that the difference in TTDEG between manufacturing and service industries is .260, given that TTCHARS is held constant. Equation 5.9: TTDEG = 9.595 + .110TTCHARS + .260MNCIND The high-order of interaction effects of the MMR test was conducted to differentiate the extent of degree of TT influenced by MNCs manufacturing and service industries. Model 2 shows the results after the product term (TTCHARS*MNC IND) was included in the equation. As indicated in Table 5.17 above the inclusion of product term resulted in an R change of

270

.001 [F (1, 124) = .153, p > 0.001]. The results do not support the presence of a significant moderating effect. Table 5.18 above also reveals information on the regression coefficients after the inclusion of product term in the equation of Model 2. The equation for model 2 is as follows: Equation 5.10: TTDEG = 7.992 + .115TTCHARS + 4.470MNCIND - .012TTCHARS*MNCIND

As indicated above, the interpretation of the regression coefficients was based on the fact that the binary moderator was coded using the dummy code system. The result for Model 2 indicates that for a 1-point increase in TTCHARS, TTDEG is predicted to have a difference of .115, given that MNCIND is held constant. The interpretation of the regression coefficients for the product term in Equation 5.10 is that there is only a -.012 difference between the slope of TTDEG on TTCHARS between manufacturing and service industries. The slope regressing TTDEG on TTCHARS is slightly steeper for manufacturing industry as compared to service industry by .012 TTDEG standard deviation units.

The TTCHARS and TTDEG relationship for manufacturing and service industries is shown in Figure 5.8 below. The value of the mean score for TTCHARS is 6.13 and the standard deviation (SD) is .91. Following Aguinis (2004), the value 1 SD above the mean is 7.04 and the value 1 SD below the mean is 5.22. Thus, using the value of 1 SD above and below in Equation 5.10 yields the graph shown in Figure 5.8. Results based on Equation 5.10 lead to the conclusion that there is no moderating effect of MNCIND. Nevertheless, although

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insignificant, a perusal of Figure 5.8 shows that the TTCHARS-TTDEG relationship is stronger (i.e. steeper slope) for manufacturing industry as compared to service industry. Figure 5.8: Slopes for TTDEG on TTCHARS for MNCIND

30 25 20 15 10 5 0 -5

Low TTDEG (1 SD below mean) manufacturing industry

High TTDEG (1 SD above mean) service industry

The results indicate that MNCs types of industry (MNCIND) has no significant moderating effect in the relationship between TTCHARS and TTDEG (R = 0.001). The results (Appendix J) suggest that the inclusion of MNC IND (manufacturing and service industries) in the relationship has no significant moderating effect in changing the degree/volume of TT for both degree of tacit (TCTK) and explicit (EXPK) knowledge. The MNC IND is shown not capable of changing the nature of TTCHARS-TTDEG relationship and explain further in what conditions TTCHARS causes TTDEG. The results suggest that the effect of TTCHARS 272

on TTDEG alone do sufficiently explain TTDEG and therefore the inclusion of MNC IND fails to moderate the relationship as the effect of TTCHARS on TTDEG is conclusive.

The findings are interesting given the fact that only limited studies on inter-firm technology/knowledge transfer have tested the effect of MNC IND as a moderating variable. For example, Lane and Lubatkins (1998) found that MNC IND was significant in moderating the relationship between relative absorptive capacity and inter-organizational learning. In Lane et al. (2001), the study found service industry has a significant positive relationship with IJV performance. MNCIND is included in this studys model primarily due to its strong theoretical support which suggests that 1) industries characterized by greater degrees of knowledge intensities have higher propensities to become global than other industries (Gupta and Govindarajan, 2000), and 2) asymmetries in the industries characteristics indicate that certain industries which are more global require high level of knowledge transfer than the less global industries (Minbaeva, 2007).

Thus, given the above results, the plausible explanation is that although MNCs types of industry are categorized as manufacturing and service industries, there is not much difference in terms of tacit and explicit knowledge between these two industries. As a result, the moderating effect of MNCIND in the relationship could have possibly been superseded by the significant impacts of TTCHARS on TTDEG, especially KCHAR. This is evident by the empirical data which confirm the significant impact of KCHAR on TTDEG. The population data perceive that both industries still consist of highly tacit, complex, and specific technology and knowledge even where explicit knowledge is well codified and mainly

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standardized in blueprints, manuals, instructions or procedures. The results are not in line with previous empirical studies by Lane and Lubatkin (1998) and Lane et al. (2001). However, the results are consistent with few empirical studies (Dhanaraj et. al., 2004; Nielsen, 2007; Luo, 2001). The findings have specifically extended current literature by providing new insight and empirical evidence that MNC IND does not moderate the relationship between TTCHARS and TTDEG.

5.10 Summary of Hypothesis Testing Based on the above findings, the results of the hypothesis testing are summarized as shown in Table 5.19 below. Table 5.19: The Summary of Hypotheses Testing
No Hypotheses Overall Result Directions Results

1.

H1: Knowledge characteristics are negatively related to degree of technology transfer in IJVs. H1a: Knowledge characteristics are negatively related to degree of tacit knowledge in IJVs. H1b: Knowledge characteristics are negatively related to degree of explicit knowledge in IJVs. H1c: The higher the degree of tacitness the lower the degree of technology transfers to local recipient firms in IJVs. H1d: The higher the degree of complexity the lower the degree of technology transfers to local recipient firms in IJVs. H1e: The higher the degree of specificity the lower the degree of technology transfers to local recipient firms in IJVs.

Negative

Supported

Negative

Supported

Negative

Not Supported Not Supported Not Supported

Negative

Negative

Negative

Supported

274

2.

H2: Technology recipient characteristics are positively related to degree of technology transfer in IJVs. H2a: Technology recipient characteristics are positively related to degree of tacit knowledge in IJVs. H2b: Technology recipient characteristics are positively related to degree of explicit knowledge in IJVs. H2c: The higher the degree of absorptive capacity of local recipient firms the higher the degree of technology transfer in IJVs. H2d: The higher the degree of recipient collaborativeness of local recipient firms the higher the degree of technology transfer in IJVs.

Positive

Supported

Positive

Supported

Positive

Supported

Positive

Supported

Positive

Supported

3.

H3: Technology supplier characteristics are positively related to degree of technology transfer in IJVs. H3a: Technology supplier characteristics are positively related to degree of tacit knowledge in IJVs. H3b: Technology supplier characteristics are positively related to degree of explicit knowledge in IJVs. H3c: The lower the degree of partner protectiveness of the foreign supplier firms the higher the degree of technology transfer in IJVs. H3d: The higher the degree of transfer capacity of the foreign supplier firms the higher the degree of technology transfer in IJVs.

Positive

Supported

Positive

Supported

Positive

Supported

Negative

Supported

Positive

Supported

4.

H4:

Relationship characteristics are positively related to degree of technology transfer in IJVs. Relationship characteristics are positively related to degree of tacit knowledge in IJVs. Relationship characteristics are positively related to degree of explicit knowledge in IJVs. The higher the degree of relationship quality between the foreign supplier firms and local recipient firms the higher the degree of technology transfer in IJVs.

Positive

Supported

H4a:

Positive

Supported

H4b:

Positive

Supported

H4c:

Positive

Supported

H4d: The higher the degree of mutual trust between the foreign supplier firms and local recipient firms the higher the degree of technology transfer in IJVs.

Positive

Supported

275

5.

H5: Technology transfer characteristics; which consist of knowledge, technology recipient, technology supplier and relationship characteristics are significant and good predictors of degree of technology transfer in IJVs. H5a: Technology transfer characteristics sub-variables; which consist of tacitness, complexity, specificity, absorptive capacity, recipient collaborativeness, partner protectiveness, transfer capacity, relationship quality and mutual trust, are significant and good predictors of degree of technology transfer in IJVs.

Positive

Supported

Positive

Not Supported

6.

H6: The higher the degree of technology transfer in IJVs; which consists of degree of tacit and explicit knowledge, the higher the degree of local firms performance. H6a: The higher the degree of technology transfers in IJVs; which consists of degree of tacit and explicit knowledge, the higher the degree of local firms corporate performance. H6b: The higher the degree of technology transfers; which consists of degree of tacit and explicit knowledge, the higher the degree of local firms human resource performance.

Positive

Supported

Positive

Supported

Positive

Supported

7.

H7: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by the MNCs size.

Negative

Supported

8.

H8: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by age of JV.

Negative

Not Supported

9.

H9: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by the MNCs country of origin.

Negative

Not Supported

10.

H10: The relationship between technology transfer characteristics and degree of technology transfer in IJVs is moderated by the MNCs types of industry.

Negative

Not Supported

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5.11 Chapter Summary This chapter reports results of the analyses which are conducted using the predetermined statistical tools in testing the studys hypotheses. The results for each hypothesis are presented together with arguments and discussions on its relevance to previous literatures findings. The results of the analyses reveal several interesting findings which specifically extend the literature on TT and KT. The analyses conducted were 1) the Pearson Product Moment Correlation Coefficients, 2) Multiple Linear Regressions, and 3) High order interaction effect of Moderated Multiple Regressions (MMR).

At group level analysis, all the TTCHARS record significant effects on TTDEG with RCHAR emerging as the strongest TT characteristic, followed by TSCHAR, TRCHAR, and KCHAR. The findings also provide empirical support for the proposition made by recent literature which suggests that TRCHAR, TSCHAR, and RCHAR have superseded KCHAR as the most important determinant of TT. At individual sub-variables level analysis, the empirical findings are rather interesting. Except for TCT and COMPLX; which are not supported by the data, the other seven sub-variables (SPEC, ACAP, RCOL, PROTEC, TRANSCAP, RELQLTY and MT) are found to have significant effects on TTDEG.

Using standard multiple regression, the results identified that all TTCHARS (KCHAR, TRCHAR, TSCHAR, and RCHAR) in the proposed main model are significant and good predictors of TTDEG. Based on the results of the R-squared (R), the p and beta values of all the predictor variables, the non existence of multicollinearity problem between predictors, and the fact that the assumptions of normality, equality of variance and linearity are all met,

277

the main model is considered good, stable and reliable. However, the proposed second model is not fully supported by population data. Upon exclusion of the non-significance predictors (TCT, COMPLX, ACAP, RCOL, PPROTEC and MT), the final second model identified SPEC, TRANSCAP and RELQLTY as significant predictors of TTDEG.

On the effects of TTDEG on LFP, the empirical results have specifically extended TT literature by discovering that there is a strong positive significant effect of TTDEG on LFP and its two dimensions (CPERF and HRPERF).

On the results of moderating variables tested in this study, it is quite interesting to detect/identify that MNCSIZE has significantly moderated the relationship between TTCHARS and TTDEG. The other moderating variables such as JVAGE, MNC COO, and MNCIND, although have been extensively highlighted by the literature of their significant effects, fail to moderate the relationship. Nonetheless, the overall results offer new insights, empirical evidence and further information on the boundary conditions of the relationship.

The next chapter presents the conclusions and summary of findings of the study.

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CHAPTER 6

CONCLUSION

6.1 Introduction This final chapter presents the findings and conclusions of the study commencing with the summary of key findings. The succeeding section specifically highlights the contributions made to the theory and body of knowledge and discussions on the implications for both policy and practice in terms of managerial and organizational implications together with recommendations for future research. The limitations and recommendations for the study are discussed at the end of the chapter.

6.2 Summary of Findings and Conclusions 6.2.1 Knowledge Characteristics and Degree of Technology Transfer At group level analysis the studys findings indicate that knowledge characteristics (KCHAR) had a small significant negative effect on degree of technology transfer (TTDEG). Among all the technology transfer characteristics (TTCHARS), KCHAR recorded the weakest effect. On the effect of KCHAR on TTDEGs dimensions, a small significant negative effect on degree of tacit knowledge (TCTK) was recorded. However, KCHAR had no significant effect on degree of explicit knowledge (EXPK), although the direction was negative. At individual (sub-variables) level analysis, two KCHAR dimensions: tacitness (TCT) and complexity (COMPLX), which had negative direction, were found to have no

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significant effects on TTDEG. Specificity (SPEC), however, was the only KCHARs dimension that had a significant negative effect on degree of technology transfer.

From the findings this study concludes that KCHAR had negatively affected degree of tacit knowledge (TCTK) that are intended to be transferred to local recipient firms. The plausible reason is that technology suppliers technologies and knowledge are well embodied within the component of their competencies; they are non-codifiable, highly personal, and deeply rooted in action, commitment, and involvement within a specific context. KCHAR involve the intangible factors embedded in the personal beliefs, experiences, and values in an organization which cause the technology/knowledge to be difficult to be formalized, communicated, transferred and shared between the JV partners. The findings also confirm and support previous empirical results where knowledge-specific attributes such as tacitness or ambiguous knowledge are more difficult to transfer in international ventures (Simonin, 1999a; Pak and Park, 2004). The results on significant effects of KCHAR on degree of tacit knowledge, however, are not in line with Pak and Parks (2004) findings; where the effects of specificity and desirability on manufacturing-processing (explicit knowledge) are more dominant than new product development (tacit knowledge).

Consistent with the theoretical studies (Kogut and Zander, 1993; Simonin, 1999a), KCHAR had no significant effect on degree of explicit knowledge (EXPK) suggesting that explicit knowledge; which is mostly codified, is easier to transfer in JVs than tacit knowledge. Nevertheless, from the negative sign in the relationship between KCHAR and EXPK it can be reasonably concluded that although explicit knowledge is well codified, which allows for

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a higher/easier transfer of technologies, explicit knowledge still implicitly consists of a strong intrinsic tacit element/value (firm-specific) and to facilitate the transfer of explicit knowledge must involve various level of organization and group involvement. Thus, transferring explicit knowledge; which consists of a highly tacit, complex and firm-specific technology/knowledge still requires not only learning by doing by the recipient but also active involvement of the teacher/supplier.

6.2.2 Technology Recipient Characteristics and Degree of Technology Transfer At group level analysis this studys findings reveal that technology recipient characteristics (TRCHAR) had a medium significant positive effect on degree of technology transfer (TTDEG). As compared to other TTCHARS, TRCHAR had the second strongest effect on TTDEG. On the effect of TRCHAR on TTDEGs dimensions (TCTK and EXPK), a medium significant positive effect on both TCTK and EXPK was recorded. At the individual (subvariables) level analysis, all TRCHAR dimensions; absorptive capacity (ACAP) and recipient collaborativeness (RCOL) were found to have a medium significant positive effect on TTDEG with RCOL recording a slightly stronger effect.

The strong significant effects of TRCHAR on both degrees of tacit and explicit knowledge confirms the previous theory that the greater the degree of ACAP and RCOL the higher will be the degree of tacit and explicit knowledge transferred by the foreign JV partners. On the significant effect of absorptive capacity, this study concludes that transferring technological knowledge (tacit and explicit) in strategic alliances and IJVs is an inter-partner organizational learning process, where it strongly depends on prior related knowledge and intensity of effort

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of the learning partner. However, having these two elements itself does not guarantee success in learning since other preconditions for receptivity (absorptive capacity) of the learning partner such as a sense of confidence, a need to first to unlearn, size of skills gap with industry, and an ability to turn institutional learning to individual learning are also equally important (Hamel, 1991). Moreover, the receptivity or absorptive capacity/capability of the learning partner (recipient) will not have significant effect on learning if 1) the transferring partners (supplier) degree of partner protectiveness (organizational and skills) is high thus frustrating the learning (transfer) process, 2) there is low organizational and individual learning commitment, and 3) low motivation to learn. The findings of this study are consistent with Pak and Park (2004), Yin and Bao (2006) and Tsang et al. (2004).

This study also concludes that in the cooperative venture such as JVs, the partners learning intent is crucial in encouraging openness and transparency of the transferring partner to share and transfer more technology. If learning in JVs is being considered as competitive rather than collaborative, it will restrict the flow of the intended technologies since the learning partner is treated as a competitor rather than partner. Collaborative learning which is based on the underlying spirit of strong inter-partner collaboration, will promote knowledge sharing, mutual benefits, and opportunities to extract potential synergies that arise in JVs. With these incentives in mind the transferring partner in JVs would have high motivation to share their advance technologies and may not deliberately restrict the transfer of technology. The results are in line with the previous studies which found statistical support for the effect of RCOL on degree of knowledge transfer (Yin and Bao, 2006; Hamel, 1991).

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6.2.3 Technology Supplier Characteristics and Degree of Technology Transfer At group level analysis this studys findings show that technology transfer characteristics (TSCHAR) had a medium significant positive effect on degree of technology transfer (TTDEG). Among the TTCHARS, TSCHAR had the third strongest effect on TTDEG. On the effect of TSCHAR on TTDEGs dimensions (TCTK and EXPK), a medium significant positive effect on TCTK and EXPK was recorded. At the individual (sub-variables) level analysis, partner protectiveness (PPROTEC) as the first TSCHAR dimension was found to have a small significant negative effect on TTDEG; whereas transfer capacity (TRANSCAP) was found to have a strong significant positive effect on TTDEG. Between these two TSCHAR dimensions, TRANSCAP recorded a stronger effect as compared to PPROTEC.

Consistent with recent development in knowledge transfer literature, the results confirm the theoretical proposition which suggests that knowledge provider attributes has become one of the most important determinant of knowledge transfer. The significant effects of TSCHAR on both degrees of tacit and explicit knowledge confirm the previous theory on the importance of PPROTEC and TRANSCAP in facilitating technology transfer and organizational learning within IJVs. The presence of a strong impact on TSCHAR on TTDEG suggests that more tacit and explicit technologies will be transferred to the local recipients when 1) a high degree of openness or transparency exist between IJV partners and 2) the supplier partners have the ability to transfer technology effectively to the local recipients. Although the empirical evidence on the effect of TRANSCAP on TTDEG is rather limited, the results of this study are in line with Minbaeva (2007), Szulanski (1996), and Gupta and Govindarajan (2000).

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This study argues that the TRANSCAP of the supplier in IJVs; which is reflected in the parent firms assistance, active involvement, high commitment in terms of investment in resources, and availability of training and support, is crucial in determining the volume/degree of technology transferred to the local JV partner. To increase the level of technology transfer (tacit and explicit) in IJVs the technology supplier should become a proficient transferor with the ability to articulate knowledge, describe the potential uses of the knowledge and condition as to what the knowledge can achieve, and assess the recipients degree of receptivity, assimilation and use of technology. The results indirectly suggest that TRANSCAP is one of the major concerns faced by the local recipient firms.

On the low significant effect of PPROTEC on both TTDEG, this study follows the argument made by Simonin (1999a) who argued that it is difficult to evaluate and assess the true role and effect of PPROTEC on degree of tacit knowledge in IJVs if data on failed joint ventures was not obtained (pg.615). Thus, it is impossible to assess the relationship between lack of knowledge and failure should data on failed IJVs is not available. The results are not consistent with Simonins (1999a) findings where PPROTEC was found insignificant because 1) PPROTEC may not always be detectable or observable, and 2) the insignificance of PPROTEC may well be rooted in the close interplay between protectiveness and opportunism. From the results, there is a high possibility that the true effect of PROTEC in the studys models was superseded by the overly strong effect of TRANSCAP on both degrees of tacit and explicit knowledge thus overshadowing the significant role of PPROTEC. The results, nevertheless, are consistent with the recent findings by Hau and

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Evangelista (2007) where PPROTEC had significantly affected the acquisition of tacit and explicit marketing knowledge.

6.2.4 Relationship Characteristics and Degree of Technology Transfer At group level analysis this studys findings indicate that as compared to the other TTCHARS, relationship characteristics (RCHAR) had the strongest significant positive effect on degree of technology transfer (TTDEG). On the effect of RCHAR on TTDEGs dimensions (TCTK and EXPK), a strong significant positive effect on TCTK and EXPK was recorded. At individual (sub-variables) level analysis, all RCHAR dimensions: relationship quality (RELQLTY) and mutual trust (MT) were found to have a strong significant positive effect on TTDEG with relationship quality recording a slightly stronger effect.

The findings are consistent with recent propositions made by the literature; where knowledge attributes are not the only important determinant of knowledge transfer (Minbaeva, 2007; Szulanski and Cappetta, 2003). The presence of strong impact of RELQLTY and MT on both degrees of technology transfer (TCTK and EXPK) suggests that the greater the quality of relationship and mutual trust between the recipient and supplier the higher the degree of technology transfer within the JVs. The quality of relationship in JVs in terms of frequent and effective interactions between partners, openness, spontaneous, and adequacy of communication could create potentials for numerous individual exchanges between the JV partners; particularly when the transfers involve a highly specific technology and tacit knowledge. More opportunities for sharing, learning, and transferring technology will exist if both partners have a higher quality of interactions. In the collaborative and constructive

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interactions, RELQLTY is viewed as an effective mechanism to facilitate inter-firm technology transfer as both partners are motivated to invest more resources in the JVs and committed to fulfill their commitments. The result also supports and confirms recent empirical findings by Lin (2005); where quality interaction was found to have a significant effect on knowledge acquisition. In line with the current development in the literature, the population data also suggests that 1) RELQLTY has become a major determinant of technology transfer in facilitating a higher degree of technology transfer, and 2) conflicts between JV partners are likely to lead to JVs instability thus minimizing the flows of information.

On the significant effect of mutual trust (MT) on both degrees of technology transfer (TCTK and EXPK) this study concludes that the greater the mutual trust between JV partners the higher the degree of inter-firm technology transfer to local partners. Obviously, this is because MT reduces the existence of suspicious feelings between partners in JVs thus creating opportunities for close interactions, increasing confidence that both partners would not take advantage on each other, and promoting transparency. In the collaborative ventures such as strategic alliances and JVs, a low degree of trust discourages openness/transparency between partners resulting in a limited accuracy and comprehensiveness of information and technology. The significant effect of MT on TTDEG is consistent with Gulati (1995), Kale et al. (2000), and Powell (1996).

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6.2.5 Predictors of Degree of Technology Transfer (TTDEG) Supported by the population data, the holistic model of TTDEG advanced by this study had successfully determined that all technology transfer characteristics (knowledge, technology recipient, technology supplier and relationship characteristics) are significant and good predictors of TTDEG; where the largest beta coefficient value was recorded by relationship characteristics (RCHAR) followed by technology supplier characteristics (TSCHAR), technology recipient characteristics (TRCHAR), and knowledge characteristics (KCHAR). All the four technology transfer characteristics made strong unique contribution to explain TTDEG. The models R-squared of 0.416 implies that the four predictor variables explain about 41.6 % of the variance/variation in TTDEG. The ANOVA table reveals that the Fstatistics (F = 21.901) is medium and the corresponding p-value is highly significant (p = 0.0001) or lower than the alpha value of equal to zero; which confirms that there is a linear relationship between degree of technology transfer and the four predictor variables. The studys main model which explained degree of technology transfer is considered stable, good and reliable. The holistic model in this study represents a complete view of all critical relationships between technology transfer characteristics and degree of technology transfer in one model.

The results are in line with the proposition made by the literature which suggested that KCHAR, as the most important knowledge transfer determinant, have not only been superseded by TRCHAR and TSCHAR but also by RCHAR. The results bring to the conclusion that the greater (closer) the relationship between IJV partners the higher the degree of TT. Many theoretical studies on strategic alliance have stressed on the importance

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of

having

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relationship

between

collaborative

partners

in

promoting

openness/transparency between partners, and mutual trust. The empirical data provides significant evidence that RCHAR, in terms of frequent and effective interactions, multiple individual exchanges, productive and adequacy of interaction, and intimacy of relationship, are more likely to contribute to an increase of 1) relationship openness/transparency that reduces partner protectiveness, 2) opportunity to learn, share and access to both JV partners strategic knowledge and competencies, 3) resource commitments in JV, and 4) mutual trust between JV partners.

The RCHAR are critical in JVs because only through close interactions can both tacit and explicit technologies be easily accessed, shared, and transferred. The results are consistent with several empirical studies such as Minbaeva (2007), Pak and Park (2004), and Yin and Bao (2006). The RCHAR, as the strongest TTCHARS, has become a major concern among the sample population for their role in facilitating a greater transfer of both tacit and explicit technologies in IJVs. Interestingly, the results extend Pak and Parks (2004) findings by discovering that RCHAR has not only significantly affected degree of tacit knowledge (TCTK) in IJVs but also the degree of explicit knowledge (EXPK).

The results are in line with the recent propositions in literature where the information provider attributes have also surpassed the important role of knowledge attributes. The empirical evidence establishes that TSCHAR (the information provider) supersedes KCHAR as the most important determinant of knowledge transfer. This study conclude that to increase the degree of technology transfer of both tacit and explicit knowledge in IJVs the

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supplier partners must become 1) a proficient transferor, and 2) more transparent in the transfer process since it involves various organizational levels and actors. From the findings, it is reasonable to conclude that the transferring partners in IJVs are satisfied with the recipients collaborative learning intent, which has directly increased the trust between partners thus suggesting that the supplier partners could have been motivated to transfer more tacit and explicit technologies when they become less suspicious of the recipient partners.

On the TRCHAR, this study strongly contends that a higher degree of technology is likely to be transferred to the recipients who possess high absorptive capability; which is reflected in the recipients basic/minimal skills, a shared language, positive attitude towards learning, relevant prior experience, up-to-date knowledge on the knowledge domain that the recipient wishes to exploit, and their intense learning efforts. More importantly, as learning new technologies in IJVs demands active involvement by the MNCs parent company at various organizational levels, therefore before technology/knowledge can possibly be transferred, knowledge must be connected through various levels (individual, group and organization) to create potentials in sharing the observations and experiences. Furthermore, a successful transfer of both tacit and explicit knowledge to the recipient firms also depends on the recipients collaborative attitudes towards achieving mutual benefits and organizational learning. Thus, the recipients learning intent is critical as a mechanism to encourage the suppliers openness/transparency to share and transfer higher technology.

Finally, this study concludes that the KCHAR are not the only dominant factors in predicting degree of inter-firm technology transfer. Other critical determinants such as RCHAR,

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TSCHAR and TRCHAR could also significantly determine a higher degree of technologies in IJVs. The empirical evidence shows that the findings are similar to Minbaeva (2007) and therefore consistent with recent developments in knowledge transfer literature; which suggested that KCHAR are not the only important determinant of knowledge transfer. The major concerns faced by the local recipient firms have shifted to strengthening the recipientsupplier relationship, building the technological capacity of local work force and reducing the barriers to technology transfer.

This study had also advanced a second TTDEG model to determine whether TTCHARS subvariables (tacitness, complexity, specificity, absorptive capacity, recipient collaborativeness, partner protectiveness, transfer capacity, relationship quality, and mutual trust) were also capable of becoming predictors of TTDEG. The models R-squared of 0.500 implies that the nine predictor variables explain about 50 % of the variance/variation in TTDEG. The ANOVA table reveals that the F-statistics (F = 13.129) is medium and the corresponding pvalue is highly significant (p = 0.0001) or lower than the alpha value of equal to zero which confirms that there is a linear relationship between TTDEG and the nine predictor variables. However, due to poor fit between population data and the proposed second model, only specificity, transfer capacity, and relationship quality are identified in the final second model as significant and good predictors of TTDEG with the largest beta coefficient value recorded by transfer capacity, followed by relationship quality, and specificity.

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6.2.6 Degree of Technology Transfer and Local Firms Performance The studys findings suggest that degree of technology transfer (TTDEG) has a strong significant positive effect on local firms performance (LFP). On the effect of TTDEG on LFPs dimensions: corporate (CPERF) and human resource (HRPERF) performances, a strong significant positive effect on both CPERF and HRPERF was recorded where HRPERF showed a stronger effect than CPERF. On the significant effect of TTDEG and LFP, this study concludes that the higher the degree of technology transfer (both tacit and explicit knowledge) the greater the corporate and human resource performance of local recipient firms. The results are consistent with the findings in the previous literature (Lane et al., 2001; Lyles and Salk, 1996; Yin and Bao, 2006; Tsang et al., 2004) which suggests that a higher degree of technology transfer to local recipient firms contributes to high improvement and increment of 1) business volume, market share, planned goals, and profit, and 2) product/service quality, employees productivity, managerial techniques/skills, and operational efficiency.

In line with current literature, the significant effect of TTDEG on CPERF have indeed supported the theoretical argument which argued that since tacit knowledge for new product/service development, managerial systems and practice, process designs and new marketing expertise is organizationally embedded in the interdependent systems, expertise and complex individuals and groups routines of the technology suppliers, therefore these strategic valuable resources and competencies if transferred will significantly lead to an increase of local firms competitiveness, technological capabilities, organizational learning effectiveness, productivity, and create potentials for innovations. The results have expanded

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the general findings by Dhanaraj et al. (2004) where tacit knowledge has a significant effect on IJV performance. The significant role of TTDEG on human resource performance is explained by its explicit nature in manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how; which is frequently standardized by the technology supplier in the form of standard manuals, procedures, and blueprints thus making it less sticky than tacit knowledge, easier to articulate and understand, and more easy to share, communicate and transfer.

Compared to other formal market channels such as direct exporting of capital goods, foreign direct investments (FDIs), and licensing agreements, this study also provides critical evidence in such that the IJVs formed between foreign MNCs and local companies indeed have significant positive influence on local firms performance. However, this finding is contrary to a recent study by Malairaja and Zawdie (2004); which argued that technology transfer through JVs did not sufficiently help develop local innovation capabilities. The empirical findings in this study strongly support the thesis that the significant effect of TTDEG on HRPERF in improving product quality and employees productivity will positively increase local innovation capabilities. Another critical finding of this study is that the objective of the local recipient firms forming JVs with foreign MNCs is mainly to improve the product/service quality, employees productivity, managerial techniques, and operational efficiency. In this aspect, the results are consistent with the empirical findings by Lyles and Salk (1996) and Lane et al. (2001). This is also consistent with current TT literature which argued that technology recipient organizations are a learning system and technology transfer is an organizational learning process (Daghfous, 2004).

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6.2.7 Moderating Effect of MNCs size The results provide new insights and information by detecting the presence of a significant moderating effect of MNCs size (MNCSIZE) in the relationship between technology transfer characteristics and degree of technology transfer. The slopes for TTDEG on TTCHARS for large and medium/small MNCs (Figure 5.5 of Chapter 5) indicate the presence of a significant moderating effect of MNCSIZE. The relationship appears to be stronger for medium/small MNCs as compared to large MNCs.

Based on these findings, it can be concluded that MNCSIZE, whether large or medium/small MNCs, has been established to provide a significant moderating impact in TTCHARSTTDEG relationship in JVs. As compared to medium/small MNCs, large MNCs are known to have abundant supply of resources, expertise and vast JVs experience to undertake technology transfer, however, due to their inherent advantage, a higher bargaining power and less dependent on local partners they are unlikely to transfer a higher degree of technology to local partners. This is also because large MNCs have the propensity to regard their JVs as one-way learning processes thus having little to share with local partners. Since learning in IJVs is asymmetrical, large MNCs tend to perceive learning as solely the task of the knowledge-disadvantaged local partners. Moreover, the MNCs from the developed countries would normally request for a higher equity ownership in order to increase their bargaining power and have full control of the systems, methods and decisions in the JVs. Large MNCs typically form JVs as the mechanism towards extracting knowledge and information on local business, economics, and political stability. In this sense, in order to maintain their

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dominance, large MNCs are reluctant to transfer their technologies to local JV partners instead they are more inclined to protect their proprietary technologies and competencies.

On the other hand, although medium/small MNCs in IJVs are more likely to compromise with local partners in terms of equity ownership to maintain a balanced bargaining power, however, due to their limited resources, expertise and lack of IJVs experience they are most unlikely to undertake technology transfer of tacit knowledge than large MNCs particularly if the transfer involves technologies which form the strategic valuable resources, competencies and source of sustainable competitive advantage of the MNCs. The results further support and extend the empirical findings by Simonin (1997), Simonin (2004), Dhanaraj et al. (2004) and Bresman et al. (1999).

6.2.8 Moderating Effect of Age of Joint Venture The results indicate that age of joint venture does not moderate the relationship between TTCHARS and TTDEG. The population data suggest that the significant positive effect of TTCHAR on TTDEG alone is sufficient to explain degree of technology transfer. Although there is no moderating effect in the relationship, Figure 5.6 reveals valuable information in such that the TTCHAR-TTDEG relationship is stronger for young JVs as compared to old JVs. This leads to the conclusion that although a longer period of collaborative relationship in JVs could escalate the opportunity to share, learn, and transfer technologies between JV partners resulting from the decrease of cultural distances, increase of inter-partner trust and personal attachment between partners, however, the formation of alliances and JVs have frequently been perceived as a race to learn and are closely associated with JVs instability.

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Therefore, a longer duration of JVs may probably cause a shift (increase) in the supplier partners bargaining power thus eliminating their partner dependency on the recipient partners. As a result, this will indeed frustrate the recipient partners organizational learning process; when the supplier partners become more protective of their strategic valuable asset and are reluctant to transfer higher technologies.

On the other hand, the MNCs in young JVs are normally reluctant to invest a higher degree of resources (both capital and human resources) in the newly formed JVs. Their attitude is closely associated with the skeptical feelings towards the recipient partners true learning intent (whether competitive vs. collaborative) thus limiting the flows of their valuable technologies to recipient partners. Moreover, with less JVs experience especially in handling cultural differences, the MNCs in young JVs are most unlikely to undertake technology transfer as compared to old JVs if the transfer involves technologies which form the strategic valuable resources, competencies and main source of sustainable competitive advantage of their organizations. The results further support and extend the empirical findings by Simonin (1999a), Luo (2001) and Kale et al. (2000).

6.2.9 Moderating Effect of MNCs Country of Origin Although there is a small change in the R-squared, the results show that the presence of MNCs country of origin (MNCCOO) has not significantly moderated the relationship between TTCHARS and TTDEG. Nonetheless, Figure 5.7 reveals critical information in such that the TTCHARS-TTDEG relationship is stronger for Asian MNCs as compared to Western MNCs. What can be concluded from this finding is that due to cultural differences

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(distances), attitudes towards outsiders (clannishness) and the fact that knowledge in Oriental cultures is more contextual than Western cultures (Hamel, 1991), Asian MNCs in IJVs are relatively more protective of their technologies and knowledge compared to Western MNCs; which are quite transparent and more open in facilitating knowledge assimilation and acquisition. Since inter-firm technology transfer in IJVs is an organizational learning process, the recipient partners absorptive capacity, intensity of effort and collaborative learning intent are not the only preconditions for a successful technology acquisition. Because of the cultural distances, Asian MNCs are most unlikely to transfer a higher degree or technology to local partners. As a result, this will indeed frustrate and dampen the recipient partners organizational learning process; especially when the Asian MNCs become less transparent in the transfer process. In this circumstance, as technology flows are cautiously transferred and controlled, even if technology transfers do take place, the level of transfer could be very minimal (low).

On the other hand, although Western MNCs in IJVs are found to be more transparent in terms of knowledge sharing and knowledge openness, however, due to their technology superiority Western MNCs tend to regard their JV as one-way learning processes thus having little to share with local partners. Since learning in IJVs is asymmetrical, Western MNCs view technological learning as solely the task of the knowledge-disadvantaged local partners. Moreover, they are also unlikely to seriously undertake technology transfer particularly if the transfer involves technologies which form the strategic valuable resources, competencies and source of sustainable competitive advantage of the MNCs. The results further extend the empirical findings by Hamel (1991) who found Japanese JV partners were

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relatively less transparent in inter-firm organizational learning and knowledge transfer when compared to Western JV partners.

6.2.10 Moderating Effect of MNCs Types of Industry The results show that the presence of MNCs types of industry (MNC IND) does not significantly moderate the relationship between TTCHARS and TTDEG even though there is a small change in the R-squared. The inclusion of MNCIND in the relationship does not change the relationship between TTCHARS and TTDEG. Based on the studys result although there is no moderating effect in the relationship, nevertheless, Figure 5.8 indicates that the TTCHARS-TTDEG relationship is stronger for manufacturing industry as compared to service industry. It can safely be concluded that some industries are more global and adopt a higher level of technology transfer. Manufacturing industries are considered more global than service industry, where they are often associated with greater degree of knowledge intensities in terms of high R & D-to-sales-ratio and high advertising-to-sales-ratio (Gupta and Govindarajan).

Based on Lane et al.s (2001) argument, service industries tends to be more cultural-specific than manufacturing industries. In this aspect, service industries will involve a higher degree of tacit technologies as compared to manufacturing industries, thus making them more difficult to transfer technologies if they are highly tacit, complex and specific. Therefore it is expected that due to high degree of tacit knowledge and firm-specific characteristic the MNCs in the service industries are most unlikely to transfer a higher degree of technology to local firms because these technologies are the valuable strategic assets of their organizations.

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On the other hand, although technologies in the manufacturing industries are mostly standardized by the supplier; where they are expected to be easier to transfer, nevertheless, as argued above manufacturing industries are mostly represented by large MNCs. Thus, due to their inherent advantage, high bargaining power and less dependent on local firms, they are also unlikely to transfer a higher degree of technology.

6.3 Contributions of Study Building on the previous intra and inter-firm TT literature, this study contributes to the expansion, extension, enhancement and reinforcement of the inter-firm TT theories. The new contributions of the study that have direct implications on the theory and body of knowledge are specifically outlined as follows:

First, the major contribution of the study is the development of inter-firm TT holistic model that provides a workable and systematic framework which conceptualized the critical links between technology transfer characteristics, degree of technology transfer and local firms performance in international joint ventures (Figure 6.1). Based on the previous intra-firm knowledge transfer models (Szulanski, 1996; Minbaeva, 2007), inter-firm knowledge transfer models (Tiemessen et al., 1997; Inkpen 2000) and the underlying knowledge-based view of the firm and organizational learning perspectives, the model proposes that degree of technology transfer, which includes tacit and explicit knowledge, is significantly affected and determined by the knowledge transferred, technology recipient, technology supplier and relationship characteristics. By testing this model using multiple regression analysis, the

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study had also statistically determined that all technology transfer characteristics (knowledge, technology recipient, technology supplier, and relationship characteristics) are significant predictors of degree of technology transfer in IJVs. Thus, the advancement of this model had 1) systematically explored the relationship between all technology transfer characteristics and degree of technology transfer and 2) successfully predicted the main factors that determined degree of technologies transferred by MNCs to local firms.

Figure 6.1: The Inter-Firm TT Holistic Model of TTCHARS-TTDEG-LFP


Knowledge Characteristics Significantly Moderated by
MNCs Firm Size

Technology Recipient Characteristics Technology Supplier Characteristics Relationship Characteristics

Degree of Technology Transfer

Tacit Knowledge

Corporate Performance Local Firms Performance Human Resource Performance

Explicit Knowledge

This model further conceptualizes that degree of technology transfer, which includes both tacit and explicit knowledge, has significant effect on local firms performance in terms of corporate and human resource performances. The main objective is to examine the extent of degree of technology transfers influence on local firms performance in IJVs. The model also proposes that the relationship between technology transfer characteristics and degree of technology transfer is significantly moderated by MNCs size, age of JV, MNCs country of origin, and MNCs types of industry. These relationships are developed to further explain the boundary conditions for the relationship and to develop a fully specified model. Thus, as one 299

of the studys new contributions to inter-firm technology transfer and knowledge transfer literature, the holistic model of degree of inter-firm technology transfer is developed to provide a complete view of the proposed relationships from all critical technology transfer characteristics dimensions and to determine the significant predictors of degree of technology transfer.

Second, this study contributes to the literature by advancing a second model of degree of technology transfer (Figure 6.2); which conceptualizes the critical relationship between the sub-variables of technology transfer characteristics and degree of technology transfer. The objective is to ascertain which sub-variables of technology transfer characteristics are also the significant predictors to explain degree of technology transfer. After the improvement of the second model, the final model detected/identified that specificity, transfer capacity and relationship quality are the significant and good predictors of degree of technology transfer. Figure 6.2: The Second Model of Degree of Inter-Firm Technology Transfer

Specificity Transfer Capacity Relationship Quality Degree of Technology Transfer

Tacit Knowledge

Explicit Knowledge

Third, based on the underlying integrated knowledge-based view of the firm and organizational learning perspectives, this study provides new empirical evidence and insights on the significant effects of inter-firm technology transfer characteristics on degree of technology transfer and its two distinct dimensions namely: degrees of tacit and explicit 300

knowledge. Since many of the inter-firm technology transfer studies on IJVs are theoretical and still under researched, based on two levels of analysis, group and individual level (subvariables) analyses, this study has empirically examined the relationships between all technology transfer characteristics (knowledge, technology recipient, technology supplier, and relationship characteristics) and their dimensions, and degree of technology transfer and its two dimensions (degree of tacit and explicit knowledge) using the Malaysian sample; where the empirical scope of the literature was extended.

Fourth, given the fact that empirical studies on inter-firm TT are still scarce, under researched and have been frequently conducted based on the suppliers and JVs perspectives, by adopting multi-dimensional performance indicators this study had empirically examined and offered new empirical evidence on the significant relationships between degree of technology transfer and local firms performance and its two dimensions namely corporate and human resource performances from the recipients perspective.

Fifth, from a review of literature there are limited empirical studies on inter-firm technology transfer that have tested the effect of moderating variables. Thus, this study provides empirical evidence and further information on the possible moderating effects of MNCs size, age of JV, MNCs country of origin, and MNCs types of industry in technology transfer characteristics-degree of technology transfer relationship. Since the effects of technology transfer characteristics and their dimensions on degree of technology transfer and its dimensions have never been tested previously, the empirical examination on the contingent effects of moderating variables (MNCs size, age of JV, MNCs country of origin,

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and MNCs types of industry) in the relationship between technology transfer characteristics and degree of technology transfer is also viewed as a new contribution to inter-firm technology transfer literature by offering new insights and additional information on the boundary conditions for the technology transfer characteristics-degree of technology transfer relationship.

Finally, as a new contribution to IJV literature, the results of this study provide empirical evidence on the significant role of IJV as one of the main technology transfer agents that facilitates inter-firm technology transfer and organizational learning in Malaysia. Comparable to the other technology transfer agents in the formal market channel such as direct export of goods, FDIs, and licensing agreements, the IJVs formed between the foreign MNCs and local companies have significant positive influence on local firms performance, where technology transferred through IJVs are more likely to improve product/service quality and employees productivity which could directly enhance potentials for high local technological competencies, skills, improvements and innovation capabilities of the local work force.

6.4 Implications for Policy and Practice 6.4.1 The Managerial Implications The results and findings of this study have generated several noteworthy implications for managers of JVs as well as managers of the local firms:

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First, this study confirms that the amount/degree of technology transfer in JV is significantly affected by all the technology transfer characteristics, particularly relationship characteristics. The main implication for both JV and local firms managers is that both the supplier and recipient managers must strengthen their relationship in JVs to mutually achieve their common JV and different/individual organizations objectives. The degree of technology for both tacit and explicit technology/knowledge could be increased through consistent efforts in developing and maintaining adequate, quality, amiable interactions, and coordination at organizational and group levels through numerous formal and informal interactions. Since inter-firm TT is an organizational learning process, more technologies are likely to be transferred by the supplier, especially tacit knowledge, if managers of the recipient firms adopt a collaborative attitude, establish the right learning intent to acquire knowledge, engage in a teacher-student relationship and avoid unnecessary opportunistic behaviors. A close, cordial and intimate relationship between JV partners would help increase the suppliers transparency/openness and willingness to transfer, enhance opportunities to share technologies, promote organizational learning, and increase accessibility to each others strategic knowledge, competencies and resources. The recipient managers opportunistic behaviors will only develop crisis between JV partners thus limiting potentials for a higher degree of technology transfer.

Second, the supplier managers who are directly involved in the JVs should be knowledgeable, trustworthy and proficient in transferring both tacit and explicit technologies; especially their ability to articulate and describe the potential uses of the knowledge and conditions as to what the knowledge could achieve. When the supplier managers are not

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perceived as reliable, the transfer of technology process will be difficult as their advice and example are likely to be challenged and resisted by the recipient. Thus, prior to the formation of the JV, the recipient top management should first meticulously identify the relevant technologies that they intend to acquire and carefully choose the most suitable/proficient technology supplier candidate. Apart from that, for the transfer process to effectively take place, the supplier managers must also be less protective of their proprietary knowledge. Partner protectiveness inhibits TT thus affecting the amount/degree of technology to the recipient. The recipient managers could overcome this by 1) promoting quality and intimate relationship which could develop mutual trust between JV partners, and 2) demonstrating their true and honest learning attitudes and collaborative behaviors. The supplier managers tend to be highly motivated and are more willing to transfer higher technology in JVs when the recipient managers reciprocate in providing, among others, information on local market conditions, business customs, distribution channels, and source of raw materials.

Third, the recipient employees ability to absorb, assimilate and apply new knowledge is crucial in facilitating a higher degree of technology transfer from the supplier and organizational learning. Thus, the recruitment process of the technical employees should focus on how to select suitable candidates who have strong basic knowledge and background on technologies which are intended to be acquired. More advance technologies could be transferred when the recipient employees current technological base is similar or close to the technology domain of the supplier.

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Finally, the recruitment programs designed by the recipient managers should emphasise not only on assessment of the potential candidates current level of knowledge and skills but also on their ability and enthusiasm to learn new technologies. Since the suppliers technologies comprise both tacit and explicit knowledge, the recipient employees high level of technical knowledge could 1) easily facilitate the transfer of a highly tacit, complex and specific technology, 2) reduce technological gaps between JV partners, and 3) accelerate the organizational learning process when the recipients employees are able to quickly convert individual knowledge into organization knowledge thus increasing their organizations memory.

6.4.2 The Organizational Implications The results of the study directly suggest that to facilitate organizational learning, inter-firm technology transfer and active technology sharing, the JVs top management must design and implement programs which are aimed at enhancing technology codification and experiential learning (learning by doing), whenever possible, to convert a highly tacit, complex, and specific technology into explicit technology to eliminate or reduce technology ambiguity.

Second, through a higher financial allocation, more investment on resources by the organizations/companies should be allocated to facilitate technology transfers and organizational learning in JVs by providing 1) technical and educational programs, courses, and seminars to the local recipient employees, 2) frequent on-the-job training programs with the suppliers parent companies abroad, 3) a systematic technology transfer coordination between both the supplier and recipient at individuals, groups, and organizational levels, 4) a

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resource allocation to develop research and development programs which involve more participation of the recipients researchers and technical employees, and 5) a higher number of qualified foreign expertise in the technical and educational programs.

Third, with respect to the protective (active) measures; which are intentionally or unintentionally imposed by the technology suppliers to restrict, reduce the technology transfer learning process or reduce the technology transparency, all the intentional or unintentional procedures, routines, and policies that restrict technology sharing and transfer in JVs particularly tacit knowledge should be consistently reviewed and actively monitored by the recipient organization to allow for more transparency between JV partners. In case of technology ambiguity in technology transfer process, the recipient organizations/companies must, from time to time, specifically request for further technology articulation from the supplier organizations.

Fourth, in order to nurture mutual trust and openness, intimate and close interactions between the supplier and recipient organizations/companies should be directed to strengthen the underlying spirit of collaboration through frequent (numerous) formal and informal programs implemented at individual, group and organizational levels. This is because the decision to transfer technology is largely personal and driven by the suppliers willingness and motivation to share and transfer knowledge. To achieve this objective the recipient organizations could collaborate with the supplier organizations to design appropriate and workable JVs organization structure; which could promote intimate interactions between foreign expertise and local employees.

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Fifth, since the relationship between technology transfer characteristics and degree of technology transfer is moderated by MNCs size the local organizations/companies who intend to acquire and learn foreign technology/knowledge through IJVs should focus more on 1) collaborating with medium-large MNCs that possess adequate resources and expertise; especially MNCs who are still depending on local partners for knowledge and information and have high commitment to support (collaborate) inter-organization technology transfer and implement organizational learning, 2) forming JVs that involve equity ownership particularly shared management JVs (50/50 interest) and 3) having formal agreement between JV partners. This is crucial because as long as the local partners maintain and sustain their bargaining power in IJVs, the foreign MNCs although reluctant to share their proprietary technology, have to be transparent with local partners during the information sharing/exchanging process and compromise on the equity ownership in JVs. Since many literatures have acknowledged that IJVs are frequently built on inter-partner trust, however, to avoid uncertainty, unnecessary hardships and instability in JVs which are likely to occur in the course of their interactions/businesses, both JV partners must willingly be bound by a comprehensive and legally binding JV agreement during the early period of JV to determine the extent of their powers and limitations. This strategy is recommended to ensure that their oral promises, obligations and duties in the JV are contractual. These mutually designed JV agreements should clearly spell out details of each partys objectives, obligations, duties, responsibilities and expectations. By having JV agreements, partners are duty-bound to fulfill and honor their promises and in this sense formal JV agreement could act as an effective control mechanism.

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Sixth, the results confirmed that a higher technology transfer improves both corporate and human resource performance. The local recipient firms should treat learning both tacit and explicit technologies as their main agenda in JVs. Thus, in order to enhance organizational competitiveness, productivity, competencies, and innovation which would improve corporate and human resource performance, the local organizations/companies have no alternative but to design and implement technology transfer strategies, policies and initiatives that 1) facilitate the transfer of a higher degree of tacit and explicit knowledge from foreign MNCs, and 2) enhance organizational learning process. In designing their policies and strategies the recipient organizations should formulate their technology transfer model based on a holistic approach where emphasis is given on all factors which are attributed to knowledge, technology recipient, technology supplier and relationship characteristics. In this sense, their technology transfer model must mainly focus on achieving a higher degree of technology transfer and strengthening organizational learning process.

Finally, since JVs in developing countries are frequently being perceived as unstable organization therefore in order to maintain stability of JVs both the supplier and recipient organizations/companies are expected to compromise with each other especially on the equity ownership/interest to reach a balanced bargaining power and achieve JVs objectives .

6.5 Limitations of Study Within the intrinsic epistemological premises, the current study has been conducted with certain assumptions and delimitations.

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First, being probably the first empirical study examining the effect of all inter-firm technology transfer characteristics on degree of technology transfer in a single model, this study has mainly relied on the responses which were obtained from the top management level of the JVs. Organizational members representing different levels and functions may also have unique contributions to make in assessing degree of technology transfer and local firms performance. Thus, the scope of respondents could have been broadened to include middle and lower management levels in the JVs such as the technical, administrative and production managers who are directly involved in day-to-day implementation of technology transfer.

Second, due to resource constraints, the study conducted was cross sectional where attempts were made to predict the effect of technology transfer characteristics and their dimensions on degree of technology by using sample data collected in a single point of time. To accurately generalize and confirm the findings, the use of longitudal data in the study is suggested. Given the fact that tacit knowledge is stickier to transfer than explicit knowledge, longitudal data would capture more accurately the effects of all technology transfer characteristics on degree of technology transfer.

Third, as the major limitation of many organization studies in Malaysia, the response rate in terms of the number of usable questionnaires in this study, though sufficient, was not encouraging. The low level of awareness on academic research among the respondents was the main obstacle to this study. A higher response rate could have made the findings more statistically accurate and generalizable. Although the response rate in this study is relatively

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low, nevertheless, since there is no response bias detected in the data collected it can be reasonably concluded that the findings of this study are still generalizable and valid.

Fourth, consistent with the existing literature which suggests that JVs in the developing countries are more unstable than JVs in the developed countries, the nature of relationship between JV partners could have affected the results tremendously. The responses have a tendency to be biased should the respondents perceive that the JVs that they are involved in are competitive in nature rather than collaborative. However, the subjectivity of nature of relationship is difficult to capture. In-depth information on this issue cannot be obtained by the survey method alone as respondents have a tendency to conceal the true relationships status of JV partners due to companys strict policy. This limitation could only be addressed through multiple interviews and observations conducted at various organizational levels.

Fifth, in this study the samples population includes both established and relatively successful JVs. As the responses from the successful JVs were different from the surviving JVs, a replicating study could be conducted using samples which include these types of JVs. Using longitudal data, further studies may also be conducted to assess the effects of the technology transfer characteristics on degree of technology transfer and examine the true impact of degree of technology transfer on local firms performance.

Sixth, based on the samples population, the study was limited to manufacturing-based and service-based industries. The fact that nearly 60% of the cases in the sample were manufacturing firms implies that the results obtained may be more generalizable to

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manufacturing JVs than service JVs. A replicating study could be conducted to include other industries which are actively involved in technology transfer. This study can be extended to JVs companies registered with the Federation of Malaysia Manufacturers (FMM), MITI, or MIDA.

Seventh, there was a tendency that the responses were biased in terms of the foreign managers response. As compared to local managers, the foreign managers working for the JVs might have given a biased response based on their previous JV experience in other countries. The expatriates from developed countries with advanced technologies also have a tendency to respond differently should they perceive themselves technologically superior than their counterpart from the developing countries. This limitation could only be addressed by multiple interviews and observations conducted at various organizational levels in the JVs.

Finally, due to resource constraints, the types of technologies under investigation were confined to tacit and explicit knowledge. This study can be replicated to cover other dimensions of value chain activities such as marketing, production or management technology. Such researches would help to generalize the findings of this study.

6.6 Recommendations for Future Research Despite the studys limitations, the results and findings of this study constitute a detailed empirical attempt to respond to the need for statistical evidence that has typically been lacking in inter-firm TT literature. While this study focused on degree of inter-firm TT and 311

local firms performance, by using the holistic approach and longitudal data, a replicating study could be conducted to further examine the effects of knowledge, technology recipient, technology supplier, and relationship characteristics on level of innovation, competitiveness, productivity, and technological capabilities of local firms; which may also include the effect by other individual dimensions of technology transfer characteristics that have strong theoretical foundation but either have not been tested or failed to receive statistical support. The above relationship could also be extended to other formal inter-firm technology transfers agents such as direct exporting of goods, FDIs and licensing.

Second, the results and findings of this study show significant effects of all inter-firm technology transfer characteristics on two dimensions of degree of technology transfer, namely tacit and explicit knowledge. The tacit and explicit dimensions of technology could be extended to cover other dimensions of supply chain activities. Thus, it is worthwhile to further investigate the relationships and effects of all TT characteristics on other dimensions of tacit and explicit technology/knowledge of supply chain such as production, marketing, management and distribution.

Third, the results and findings of this study show significant effects of degree of technology transfer on both corporate and human resource performances of local firms. While JVs in developing countries are perceived as unstable organization, further study could investigate the relationships and effects of degree of technology transfer on learning outcomes, asymmetric bargaining power, stability of JVs, and equity ownership of the local firms.

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Finally, this study has significantly contributed new insights to inter-firm technology transfer literature by testing four established moderating variables (MNCs size, age of JV, MNCs country of origin, and MNCs types of industry) in technology transfer characteristics-degree of technology transfer relationship. Thus, other established moderating variables as highlighted by the literature such as organizational culture, collaborative know-how, prior JV experience, and learning capacity are worth testing to provide further information and new insights on the boundary conditions for the relationship.

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LIST OF APPENDICES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I Appendix J Results of Power Analysis - Test 1 Results of Power Analysis - Test 2 Cover Letter for Questionnaire Letter by the Graduate School of Management, UPM The Questionnaire Results of Reliability Test Results of Descriptive Test Results of Pearson Correlation Coefficients Analysis Results of Multiple Linear Regression Analysis Results of Moderated Multiple Regression (MMR) Analysis

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