A Handbook of Inter Firm Technology Transfer and Organizational Performance Doc Xi Finale

Sazali A.W, Raduan C.
The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective
THE HANDBOOK OF INTER-FIRM TECHNOLOGY TRANSFER - AN INTEGRATED PERSPECTIVE
Sazali A.W, Raduan C.R
THE HANDBOOK OF INTER-FIRM TECHNOLOGY TRANSFER - AN INTEGRATED PERSPECTIVE
By
SAZALI ABDUL WAHAB AND RADUAN CHE ROSE
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CONTENTS
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Contents
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List of Abbreviations
Preface Introduction
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1 - Technology and Technology Transfer: Defining the Concepts Part I - Literature Review and Conceptual Models of Inter-Firm Technology Transfer
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2 - The Evolution and Development of Technology Transfer Models: The KnowledgeBased View and Organizational Learning Perspectives
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3 - The Effects of Inter Firm Technology Transfer Characteristics on Degree of Technology Transfer in International Joint Ventures: A Framework
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4 - A Holistic Model of Inter-Firm Technology Transfer Based on Integrated Perspectives of Knowledge-Based View and Organizational Learning
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Part II - Technology Transfer Characteristics and Degree of Technology Transfer
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5 - The Effects of Knowledge Characteristics on Degree of Inter-Firm Technology Transfer
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6 - Measuring the Impact of Technology Suppliers Characteristics on Degree of InterFirm Technology Transfer in International Joint Ventures
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7 - The Effects of Technology Recipients Characteristics on Degree of Inter-Firm Technology Transfer
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8 - The Effects of Relationship Characteristics on Degree of Inter-Firm Technology Transfer Part III - Degree of Technology Transfer and Organizational Performance
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9 - Measuring the Effect of Degree of Inter-Firm Technology Transfer on Local Firms Performance Part IV - The Significant Influence of Moderating Factors
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10 - MNCs Size, Technology Recipients Characteristics and Degree of Inter-Firm Technology Transfer
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11 - Age of Joint Venture, Degree of Inter- Firm Technology Transfer and Local Firms Performance
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12 - MNCs Country of Origin, Degree Technology Transfer and Firms Performance
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13 - MNCs Equity Ownership, Degree of Technology Transfer and Firms Performance
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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 R&D ROC 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 Research and Development Registrar of Companies v
ROI SD SI SPEC SPSS TCT TCTK TRANSCAP TT TTDEG TTDEGQ TTCHARS TRCHAR TRCHARQ TSCHAR TSCHARQ U.S 9th MP
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
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Preface
_________________________________ The MNCs are regarded as the most efficient vehicle for transferring technology and knowledge across organizational borders especially through strategic alliances and international joint ventures (IJVs) (Tihanyi and Roath, 2002; Kagut and Zander, 1993). The inter-firm technology transfer 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 initiatives, organizations in the developing countries are strategizing to collaborate, learn and internalize their foreign partner s technological knowledge by forming IJVs with foreign MNCs to help speed up the process of strengthening their organizational competitiveness, technological capabilities and local innovation. Nevertheless, the inter-firm technology transfer processes in IJVs have often involved complex tradeoffs between the technology suppliers willingness to transfer their considerable amount of 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); where this paradox exists because the fact that the inter-firm technology transfer is indeed an organizational learning process (Huber, 1991).
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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 are quite 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 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 country s 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 do 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, 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.
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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 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 much 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 be 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 understand, address, and manage the inter-firm technology transfer factors and barriers holistically would certainly 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 government s ambition to turn Malaysia into a developed nation in 2020. Frpm the academic perspective, the primary objective of this handbook is to contribute to the existing literature on inter-firm technology especially in providing empirical evidence on the significant relationships between technology transfer characteristics, degree of technology transfer and organizational performance.
Sazali Abdul Wahab National Defence University of Malaysia
July, 2011 ix
REFERENCES
Bell, M., Hobday, M., Abdullah, S., Ariffin, N. & Malik, J. (1996). Aiming for the 2020: A DemandDriven Perspective on Industrial Technology Policy in Malaysia: Final Report to the Ministry of Science, Technology and Environment, Malaysia, World Bank/ United Nation Development Programme. Davenport, T. H. & Prusak, L. (2000). Working Knowledge: How Organizations Manage What They Know. Harvard Business School Press, Boston, MA. Hamel G. (1991). Competition for Determinant and Interpartner Learning within International Strategic Alliances. Strategic Management Journal, 12, p. 83 103. Hau, L. N. & Evangelista, F. (2007). Acquiring Tacit and Explicit Marketing Knowledge from Foreign Partners in IJVs. Journal of Business Research, 60, p. 1152-1165. Huber, G. P. (1991). Organizational Learning: The Contributing Processes and the Literature, Organization Science, 2 (1), p. 88-115. Inkpen, A. C. (2000). Learning through Joint Ventures: A Framework of Knowledge Acquisition. Journal of Management Studies, 37 (7), p. 1019-1043. Lai, Y. W. & Narayanan, S. (1997). The Quest for Technological Competence via MNCs: A Malaysian Case Study. Asian Economic Journal, 11 (4), p. 407-422. Malairaja, C. & Zawdie, G. (2004). The black box Syndrome in Technology Transfer and the Challenge of Innovation in Developing Countries, International Journal of Technology Management and Sustainable Development 3 (3), p. 233-251. Muller, T. & Schnitzer, M. (2006). Technology Transfer and Spillovers in International Joint Ventures. Journal of International Economics, 68, p. 456-468. Narayanan, S. & Lai, Y. W. (2000). Technological Maturity and Development without Research: The Challenge for Malaysian Manufacturing. Development and Change, 31, p. 435-457. Kogut, B. & Zander, U. (1993). Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation. Journal of International Business Studies, 24 (4), p. 625-646. Pak, Y. & Park, Y. (2004). A Framework of Knowledge Transfer in Cross-Border Joint Ventures: An Empirical Test of the Korean Context, Management International Review, 44 (4), p. 435-455. Raduan, C. R. (2002). Japanese Style Management Abroad, Prentice Hall. Rasiah, R. & Anuar, A. (1998), Governing Industrial Technology Transfer in Malaysia, in Yusoff, I. and Ismail, A. G, Malaysian Industrialization: Governance and the Technical Change, Penerbit Universiti Kebangsaan Malaysia, Bangi.
Szulanski, G. (1996). Exploring Internal Stickiness: Impediments to the Transfer of Best Practice within the Firm, Strategic Management Journal, 17 (Winter Special Issue), p. 27 43. Taylor, M. Z. (1995). Dominance Through Technology: Is Japan Creating a Yen Block in Southeast Asia? Foreign Affairs, 74 (6), p.14-20. Tihanyi, L. & Roath, A. S. (2002). Technology Transfer and Institutional Development in Central and Eastern Europe. Journal of World Business, 37, p. 188-198. Yamashita, S. (1991). Transfer of Japanese Technology and Management to ASEAN Countries, University of Tokyo Press. Yin, E. & Bao, Y. (2006). The Acquisition of Tacit Knowledge in China: An Empirical Analysis of the Supplier-side Individual Level and Recipient-side Factors. Management International Review, 46 (3), p. 327-348.
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Introduction
1 - Technology and Technology Transfer: Defining the Concepts
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1
Technology and Technology Transfer: Defining the Concepts
CHAPTER OUTLINE
The dynamic nature of technology has contributed to 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 exactly the technology consists of. Building specifically on knowledge-based view (KBV) and organizational learning (OL) perspectives, this work follows a stream of literature which suggests that 1) knowledge as the critical element underlying technology, and 2) both technology and knowledge are inter-dependent and inseparable in nature.
INTRODUCTION 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 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).
THE TECHNOLOGY CONCEPT

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 1
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 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 is inconsistent with 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 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 Sahal s (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 firm s intangible assets and it is firm-specific which forms the basis of a firm s competitiveness and generally is released under special condition (Caves, 1974; Dunning, 1981). Technology as the intangible assets of the firm is rooted in the firm s routines and is not easy to transfer due to the gradual learning process and higher cost 2
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 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, 1967; 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 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, 1967). These two forms of technology are also referred to as hardware and software technology. The term technology 3
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).
DEFINING THE CONCEPT OF TECHNOLOGY TRANSFER

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 Solow s (1957) growth model 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 describes 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 4
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 (person-embodied), 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 (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). 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 recipient s 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). 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; 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 cause effect relationships involved in achieving a desired outcome (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). 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 interfirm transfer. While this work 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 6
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 work specifically focuses on the transfer of technologies and knowledge between unaffiliated organizations in IJVs.
TECHNOLOGY TRANSFER AND KNOWLEDGE TRANSFER

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 that knowledge as the critical element underlying technology. TT is closely associated with the transfer of information, knowhow, 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 Sahal s (1981, 1982) concept has resolved a major analytical 7
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 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 firm s 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; Li-Hua, 2006).
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Part I
Literature Review and Conceptual Models of Inter-Firm Technology Transfer
2 - The Evolution and Development of Technology Transfer Models: The KnowledgeBased View and Organizational Learning Perspectives
3 - The Effects of Inter Firm Technology Transfer Characteristics on Degree of Technology Transfer in International Joint Ventures: A Framework
4 - A Holistic Model of Inter-Firm Technology Transfer Based on Integrated Perspectives of Knowledge-Based View and Organizational Learning
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2
The Evolution and Development of Technology Transfer Models: The Knowledge-Based View and Organizational Learning Perspectives
CHAPTER OUTLINE
The main objective of this work is to contribute to the existing Technology Transfer (TT) literature by reviewing the evolution and development of the previous TT models which include the traditional TT model, models developed after 1990s, other related theoretical foundations underlying TT models, and the current TT models which have strong influence of knowledgebased view (KBV) and organizational learning (OL) perspectives. Since the current management researchers have a strong focus on TT within strategic alliance and other collaborative ventures, this review highlights the significant influence of KBV and OL perspectives on inter-firm TT models.
INTRODUCTION Based on a review of literature, technology transfer (TT) is not a new thing. Researchers have
traced back TT process to the pre-history of the human species: where TT largely involved tacit knowledge which is evolutionary prior to explicit knowledge (Donald, 1991; Mathews and Roussel, 1997). Since there were no written languages until 3000 BC, TT had mainly occurred through language; which were supplemented by equations and diagrams which constitute as the major means of explicit transfer of technological knowledge (Gorman, 2002). The spoken language and gestures have explicitly transferred technological knowledge in friendly encounters. However, much of pre-historic TT between people occurred when people with
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superior agricultural technology assimilated or eliminated those who could not reproduce as rapidly (Diamond, 1997). Segman (1989), who conducted a historical review of TT, traced the TT process from the Neolithic times, the role of Arabs played in transferring technologies from East to West and the transfer of English textile expertise to the American textile industry in the 18th and 19th Centuries (Cameron, 1960; Irwin and Moore, 1991). In the 18th Century, despite the English law preventing knowledge migration, France eventually managed to obtain specialized steel making know-how by importing English workers and through industrial espionage (Cameron, 1960; Irwin and Moore, 1991). The success of the American textile industry in 18th and 19th Century was due to the transfer of knowledge and expertise by the English textile industry (Cameron, 1960). Previous studies have shown that certain industries collapsed, for example the English clock and watch industry, due to the industry resistance to the opportunities of TT (Irwin and Moore, 1991). The main objective of this paper is to review the evolution and development of TT models in terms of focus of each model, strengths and limitations of the models, and finally to highlight the significance influence of knowledge-based view (KBV) and organizational learning (OL) perspectives, which have strong theoretical foundation, on the current TT models. This review limits its perimeter by focusing on the inter-firm TT between two unaffiliated organizations.
APPROACHES TO TECHNOLOGY TRANSFER

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 models were developed after the 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 model, dissemination model, knowledge utilization model, and communication model. In the 1970s studies have adopted the economic international trade approach in developing a linear model of TT (Bessant and Francis, 2005). In the 1980s research on TT emphasized on the effectiveness of the specific technology being transferred which in general is within a broader context of economic development (Hope,
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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 the 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 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).
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 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 technologies available through various forms of communications such as technical reports and professional journals, the users will automatically show up at the researcher s door (Devine et al., 1987). Gibson and Slimor (1991), in their three-level TT model, describe the first level (technology development level) as the most fundamental level; when 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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THE DISSIMINATION MODEL

This model, which was popularized by Rogers (1983) and Rogers and Kincaid (1982), is 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 non-expert 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 expert s primary responsibility to select technology and ensure 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).
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 technology users setting (Backer, 1991). Gibson and Slimor (1991) view this model as the third level in their model; 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 the TT, researchers have argued 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 to one direction, unilaterally from the experts to the users, to become a developed idea and eventually a product (Gibson and
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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).
THE COMMUNICATION MODEL

Departing from the previous three models, several researchers have suggested that the communication model as 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 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 acknowledge that feedbacks help the 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 the 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, 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 18
exists independently, valid, complete and has universal applicability (Tenkasi and Mohrman, 1995). The implementer (technology developer) is responsible for transferring knowledge correctly through the appropriate channels for the user to understand; and 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, 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 the 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).
TECHNOLOGY TRANSFER MODELS AFTER 1990s

A review of the literature reveals that TT researchers have attempted to develop new technology transfer model distinguishing from the traditional models developed earlier which mainly focus 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 the 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, 3) the factors which influence TT and KT, and 4) the TT processes in IJV (Gibson and Slimor, 1991; Sung and Gibson, 2000; Rebentich and Ferretti, 1995).
GIBSON AND SLIMOR S MODEL

This model describes TT from the perspective of technology researchers and users through three levels of involvement. The underlying theories of this model are the organization and 19
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 involvements and integrates the activities involved in the traditional models. Technology Development is considered as 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 emphasis is on the importance of quality of research and competitive market pressure in achieving technology transfer (Gibson and Slimor, 1991). Technology Acceptance level indicates more involvement of TT. During 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 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 emphases are on the critical element of interpersonal communication between technology developers and users, and the organizational barriers and facilitators of TT (Gibson and Slimor, 1991).
SUNG AND GIBSON S MODEL

This model is developed to have similar objectives as Gibson and Slimor s (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 provides plausible explanations as to the levels and factors affecting knowledge and TT by describing knowledge and TT in four levels of involvements: Level I (Knowledge and Technology Creation), Level II (Sharing), Level III (Implementation), and Level IV (Commercialization) (Sung and Gibson, 2000). At the creation level, the technology developers conduct and develop research into knowledge and make available of their result/finding through research publication, videotapes, teleconference, news, and anecdotes. TT at this level is considered as a passive process where it 20
needs only minimum involvement of all participants (Sung and Gibson, 2000). Secondly, at the sharing 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, and knowledge and technology are well accepted and understood by users (Sung and Gibson, 2000). Thirdly, at the implementation level, success is determined by the timely and efficiency of knowledge and technology transfer, and the user s resources ability to implement. KT and TT may occur through manufacturing transfer, processes transfer or services and best practice transfer (Sung and Gibson, 2000). Finally, at the commercialization level, knowledge and technology is 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).
REBENTISCH AND FERRETTI S MODEL

Rebentisch and Ferretti (1995) propose an integrated model of TT process developed from the insights derived from the study of two IJVs. According to Rebentisch and Ferretti (1995) TT areas require further investigation and integration particularly on 1) the effect of the interdependencies between the 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) addresses the issues on 1) how much effort is required to transfer different types of technologies, and 2) what impact the organization s 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 that include 1) Transfer Scope, 2) Transfer Method, 3) Knowledge Architecture, and 4) Organizational Adaptive Ability. 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. This model categorizes the transfer methods in the TT process as 1) Impersonal communication, 2) Personal communication, 3) Group interaction, and 4) Physical 21
relocation. 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 technology s 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). Organizational adaptive ability is the adoption of the organization s 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 is developed based on two IJVs, nevertheless, mainly offers the theoretical insights of TT process of hardware or embodied technology (explicit knowledge) where no hypothesis testing and empirical examination has been conducted. Since this model is developed from the transferring partner s perspective thus it suffers from inherent linear bias in which the relationship and contextual dimensions of JVs have not been considered.
PREVIOUS STUDIES ON TECHNOLOGY TRANSFER

Past studies have shown that most literature on TT are focusing on technologies which are categorized as hardware technology (embodied or explicit technology) such as manufacturing control system, water purification processes and telephony switches (Saad, 2000; Bessant and Francis, 2005). Previous research on TT has traditionally concentrated on the effective linkages and information movement with no influence of management theory (Levinson and Moran, 1987). Early literature on TT have dealt with issues on, among others, TT process, appropriateness of technology, cooperation and conflict between transfer countries, the success of technology transfer, and the social and economic benefits of TT for both suppliers and recipient countries (Katz, 1985; Lall, 1982; Lynn, 1985; Mytelka, 1985; Wallender, 1979). However, in late 1980s and early 1990s TT literatures have begun to adopt some principles of the organizational development movement (French and Bell, 1995), and management theory (Sung and Gibson, 2000). Based on the limitations faced by the previous TT models and the 22
growing interest on organizational development, TT models have been developed to include management theory (Bessant and Francis, 2005). Among the pioneer researchers who have included management theory principles in their TT models are Creighton et al. (1985), Slimor et al. (1990), Inman (1987), Pinkston (1989), Gibson and Rogers (1991), and Levinson and Moran (1987). Creigton et al. (1985) in their TT model include nine elements such as organization, project, documentation of information, distribution of information, linking, capacity to transport or receive and to act, credibility of organizations in the transaction, willingness to transmit, receive or implement ideas, and reward. Other researchers focus on the importance of difference between consortia and their member companies in terms of academic and business value, networking and information sharing, long vs. short-term perspectives, universal vs. particular research objectives, and performance evaluation (Slimor et al., 1990). A stream of TT literature has identified variables affecting TT and knowledge transfer (KT) success such as person-to-person contact, knowing whom to contact, variety of communication channels, set up transfer office or committee, a sense of common purpose, understanding of nature of business, attitude and values, awareness of transfer, concreteness of
knowledge/technology, a collaborative research program, clear definition of transfer, program (training, demo, tutorials), incentive for transfer, share success stories, push and pull for technology, and product champion (Creighton et al.,1985; Slimor et al.,1990; Inman, 1987; Pinkston, 1989; Gibson and Rogers, 1991; Levinson and Moran, 1987). Past studies on TT have also focused on several areas of TT such as 1) the characteristics of the technology transferred, 2) methods of transfer, and 3) attributes of the adoption organization and its technology environment (Rebentisch and Ferretti, 1995). A large stream of literature has addressed the effect of characteristics of technology on adoption or transfer particularly on the adoption and diffusion of innovations. Among the innovation variables that have been identified to influence the adoption process are innovation cost (Ettlie and Vallenga, 1979), innovation complexity, relative advantage, trialability, observability (Pelz, 1985; Rogers, 1983), reliability, scientific status, importance, communicability, and flexibility (Tornatzky and Klien, 1982). Research on the method of transfer have focused on the organizational linkages whether hierarchical or structural (Nadler and Tushman, 1988), hierarchy as the simplest of linking mechanisms, functions by formalizing the reporting or communication relationships between the sources and recipients of technology or information (Lawrence and Lorsch, 1967), structural 23
linking mechanisms that link people and groups together non-hierarchically, using liaisons, personnel transfer, informal roles, transfer groups, and project structures (Allen and Cooney, 1971; Roberts and Frohman, 1978; Allen et al., 1988; Jervis, 1975; Roberts, 1979; Larson and Gobeli, 1988). From a review of literature, a stream of literature has examined the effect of organizational attributes on the adoption of new technologies which include size, centralization, formalization (Ettlie et al., 1984), organizational complexity (Pelz, 1985), centralization of decision-making, exposure to external information, managerial attitudes (Carter and Williams, 1959; Dewar and Dutton, 1986), regulatory or union influence, and risk taking attributes (Ettlie and Vallenga, 1979). Another stream of literature suggests that organizational characteristics such as centralization, formalization and complexity must correspond to characteristics of the new technology for the transfer or adoption to be successful (Burns and Stalker, 1966; Lawrence and Lorsch, 1967; Ettlie et al., 1984; Dewar and Dutton, 1986). Thus, based on large number of previous studies on TT, several patterns of TT studies have been identified as follows: 1) Prior to 1990s many studies on TT concentrate on the adoption and diffusion of innovations which were modeled based on appropriability, dissemination or knowledge utilization models (Devine et al., 1987; Rogers, 1983; Rogers and Kincaid, 1981). 2) The pre 1990s studies on TT have focused less on two-way inter-personal communication or relationship between the sender (supplier) and the receiver (recipient) (Devine et al., 1987; Rogers, 1983; Rogers and Kincaid, 1981). 3) Prior to 1990s, fewer studies were conducted to determine the influence of the interdependencies between technology and organizational and environmental context such as organization and culture distance (Rebentisch and Ferretti, 1995). 4) Before 1990s less or no studies provide TT s framework for inter-firm TT in 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 fewer studies on TT have examined the impact of software technology (disembodied) or tacit knowledge and its properties on TT. Many studies on TT have focused on the hardware technology (embodied technology) or explicit technology (Bessant and Francis, 2005).
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6) Past studies on TT 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). Thus, based on these limitations, in late 1980s and early 1990s studies on TT have attracted researchers from the management fields to further develop TT models which provide answers to questions on various TT issues. Among the management perspectives that provide valuable contributions to TT literature are KBV and OL perspectives.
OTHER RELATED THEORETICAL FOUNDATIONS TRANSFER
OF
TECHNOLOGY
Besides examining TT models from the previous literatures, an understanding of the related theoretical perspectives is necessary to enable the readers to relate with the practical and empirical aspects. From a review of literature, the other relevant theories which are found to be related to TT are the international trade (IT) theory, foreign direct investment (FDI) theory, KBV perspective and OL perspective. 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 they provide plausible explanations on how trades between countries contribute to the flow of productions or goods and services which have brought along the technology embedded in them. The foreign direct investment 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 review; which focuses on the cross border and inter-firm TT of tacit and explicit knowledge (software and hardware technology), the relevant theories
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underlying the current TT model are KBV and OL perspectives. This study contends that as TT does not only require transmission of knowledge but also knowledge absorption and use (Devanport and Prusak, 1998, 2000) these perspectives, which are interrelated, would enable this study to capture and explain the distinct characteristics and behavioral factors of the actors and facilitators/barriers involved such as the attributes of knowledge transferred, attitudes of both technology supplier and recipient, as well as 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).
KNOWLEDGE-BASED VIEW PERSPECTIVE AND TECHNOLOGY TRANSFER

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. 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 firm s knowledge integration and its competitive advantage based on the resource and capability perspective. Knowledge integration in a firm will lead to the firm s organization capability which in turn determines its 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 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). 26
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 country s environment (Hymer, 1976). 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 have argued that firms are no longer seen as repository of knowledge rather as an instrument to transfer knowledge across subsidiaries and 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 firm s tacit knowledge is not easily communicated and shared as it is highly personal deeply rooted in action and in an individual s involvement within a specific context (Nonaka, 1994). The individual s 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 .
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KOGUT AND ZANDER S 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 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 refer 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 further 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 interaction to transfer knowledge from ideas into production and markets, 3) what a firm does is not depending on the market s failure rather the efficiency in the process of transformation relative to other firms, and 4) the firm s boundary is determined by the difference in knowledge and the embedded capabilities between the creator and the users (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 also 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 which allow more knowledge to be shared and created within firms.
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NONAKA S MODEL
A stream of literatures has found consistent support for Kogut and Zander s (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 firm s behavior, and 2) organization knowledge is socially constructed. This group of researchers proposes a model of knowledge creation, which complements Kogut and Zander s (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 when 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 managed and dynamically interacted. This process which is highly iterative 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 effect of knowledge accumulation and growth which promotes organization innovation and learning (Nonaka, 1994; Nonaka and Takeuchi, 1995).
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GRANT S 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 explicit
knowledge ; which is capable of articulation and transferable at low cost, and 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. 3) Individuals are the primary agents of knowledge creation and the principal repositories of knowledge especially tacit knowledge. If individual s 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 1) through 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) through sequencing; a mechanism to organize production activities in a time-patterned sequence such that each specialist s input 30
occurs independently through being assigned a separate time slot, 3) through routines; where the signals and responses developed by teams over time allow the complex interactions between individuals in a relatively automatic fashion, and 4) through 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 is important as a means through which multiple individuals can communicate to integrate knowledge (Grant, 1996b).
SPENDER S 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 (Spender, 1996). As knowledge is dynamic in nature and contained within actor network, a firm is a dynamic, evolving, quasi-autonomous, 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.
SZULANSKI S 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 than 31
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 in which
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 recipient s 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 firm s routine (Szulanski, 1996). 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: i) characteristics of the knowledge transferred, ii) the source, iii) the recipient, and iv) the context in which the transfer takes place. Central to Szulanski s (1996) model of intra-firm knowledge transfer, which builds on the 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).
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ORGANIZATIONAL LEARNING AND TECHNOLOGY TRANSFER

Based on a review of 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, 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), 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, enhancing organizational effectiveness (Sadler-Smith et al., 2001). Other researchers have 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 firm s ability of evolution and action in response to the stimulation from the internal and external environment (Meyers, 1990), 3) the process of promoting organizational activities with better knowledge and understanding (Grant, 1996), and 33
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 Huber s (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: 1) Knowledge Acquisition: This construct refers to the process of how knowledge is acquired or obtained. Knowledge acquisition consists of five stages of processes: i) congenital learning, ii) experiential learning, iii) vicarious learning, iv) grafting and v) searching and noticing. 2) Information Distribution relates to the process by which information from different sources is shared and thereby leads to new information or understanding. 3) Information Interpretation: This construct refers to a process by which distributed information is given one or more commonly understood interpretations. 4) Organizational Memory: This construct refers to the means by which knowledge is stored for future use (Huber, 1991). 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 subunits and the timing of learning (Miner and Mezias, 1996). Huber s (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 34
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). 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 the knowledge is transferred from the JV to the partners. In the final stage, for internalization to occur, the parent firms must first attempt to transfer the partner s skill-related knowledge from the JV 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 firm s effectiveness at learning (Inkpen, 1998a, 2000). The accessibility to alliance s knowledge is mainly depending on knowledge tacitness and partner protectiveness (Inkpen, 1998a). Knowledge tacitness limits knowledge accessibility when 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 alliance knowledge acquisition when a high competitive overlap exists between partners. The transferring firms 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) the knowledge connections between the parent and its JV, and 2) the nature of alliance knowledge and its relatedness to the parent (Inkpen, 2000). Bapuji and Crossan (2004), however, suggest that external learning by the organizations occurs in three forms: 1) congenital learning; where a new firm learns from the past experience of 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 35
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 international joint ventures (IJVs) (Tiemessen et al., 1997).
ARGYRIS AND SCHON S MODEL

Argyris and Schon (1978) develop a three-fold typology of organizational learning: 1) singleloop, 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 an organization to change its methods and rules to improve what is being done within existing programs or policies . As a result, the organization achieves its current objective more efficiently. In addition to the error-detection-and-correction, double-loop learning involves change of the value of an organization s theory-in-use . This form of learning occurs when errors are detected and corrected in ways that involves the changes in an organization s underlying norms, policies and objective. Triple-loop or 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).
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MILLS AND FRIESEN S MODEL

This model describes the ways how organizations learn and focuses on the sources of knowledge. The model explains that an organization learns through individuals in the organization. These individuals are hired because of their specific competencies or knowledge which may be gained through on the job training or formal training. Learning is an individual phenomenon, which benefits the organization entirely through the individuals (Mills and Friesen, 1992). 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, the knowledge will still remain with the organization which constitutes OL. If an organization acquires or merges with other organization, OL occurs when the acquiring organization absorbs the acquired organization practices and procedures, or adds to its personnel the knowledge embodied in the acquired organization s processes and personnel (Mills and Friesen, 1992).
NEVIS, DiBELLA AND GOULD S 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 a planned or informal ways. Knowledge and skill acquisition occur not only through acquisition but also through knowledge sharing and utilization (Nevis et al., 1995).
NONAKA S 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)
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combination process (explicit to explicit knowledge creation), and 4) internalization process (explicit to tacit knowledge creation). A discussion on this model has been provided above.
KIM S MODEL
Kim (1993) proposes an integrative model describing the link between individual learning and OL in which an organization learns through its individual members is affected 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 individual and OL; where individual learning becomes embedded in an organization s memory and structure. In this sense, individual learning affects learning at organizational level by its influence on the organization s shared models. This model stresses that organization learns 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 perspective, and 2) the cognitive-outcome perspective. 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).
INTERNATIONAL JOINT VENTURE 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. 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) propose three phases of inter-organizational learning in JV. The first phase is transfer process where two independent firms form a JV, 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 technology, observing and imitating technology used by the other JV s 38
partner or modifying/changing the existing technologies based on the partner s direction. Transfer means to accept the partner s knowledge, to integrate knowledge into one s own systems or changing one s 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. 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 are created (Tiemessen et al., 1997). The third phase is harvesting process where partners harvest knowledge and skills from IJV and bring 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 firms is contingent upon the top management s active role in JV and proper communication with the JV managers (Lyles, 1988).
CONCLUSION
This review significantly contributes to the existing TT literature by reviewing the evolution and development of the previous TT models which include the traditional TT model, models developed after 1990s, other related theoretical foundations underlying TT models, and the current TT models which have strong influence of KBV and OL perspectives. This review could help shape the direction of both future theoretical and empirical studies on inter-firm technology transfer specifically 1) on how KBV and OL perspectives could play significant role in 39
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 to transfer technology, and learning attitudes of the recipient in strategic alliances and JVs, and 3) on 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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3
The Effects of Inter Firm Technology Transfer Characteristics on Degree of Technology Transfer in International Joint Ventures: A Framework
CHAPTER OUTLINE
The inter-firm technology transfers (TT) in collaborative joint ventures (JVs) often involve tradeoffs between the willingness of technology supplier to transfer a considerable amount of technologies to technology recipient and degree of protection of the proprietary technology, knowledge and competencies as the source of the supplier s competitive advantage. Thus, technology transfers through JVs, although have been acknowledged in many studies as the most efficient mechanism in internalizing the partner s technology, knowledge and skill, have frequently involved various facilitators, actors and complicated relationship between partners that have direct impact on the degree or amount of technology transferred in JVs. Building on the integrated knowledge-based view and organizational learning perspectives, and previous TT models, this work proposes a holistic TT model in providing explanations on the relative and simultaneous effects of technology transfer characteristics (TTCHARS) on degree of technology transfer (TTDEG). Subsequently, the holistic TT model also conceptualizes the effect of TTDEG on local firms performance dimensions namely corporate and human resource performance, and the moderating effects of MNCs firm size, age of JV, MNCs country of origin, and types of industries in the TTCHARS-TTDEG relationship.
INTRODUCTION As a developing country, Malaysia for the past thirty years has transformed its resource-based
economy to industrial-based economy which resulted in a tremendous economic growth (Malairaja and Zawdie, 2004). The Malaysian government, through its intensified efforts, has 47
turned the national economy from labor intensive to capital intensive. The early success in developing its industrial sectors was mainly owed to direct import of low technologies especially from United States (U.S), Japan and Europe. The change in the economic policy has witnessed intense efforts made by the Malaysian s government in attracting foreign investment in industrial sectors through foreign direct investments (FDI) and international joint ventures (IJVs) formed between the multinational corporations (MNCs) and local companies. The total FDIs inflows for the period 1986-1995 have increased from RM73.4bn to RM121.8bn in 1996-2005 (The Third Industrial Master Plan). Therefore, in generating the economic growth, the FDIs will continue as the primary source of foreign technology. In another example, the FDIs for the manufacturing sector in 2006 have increased to RM14.7bn from RM13.5bn in 2005 (MIDA, 2007). Since technology has been acknowledged as an important catalyst of corporate success and national economic growth (Millman, 2001), Malaysia relied heavily on FDIs from MNCs as the primary source of technology (Lee and Tan, 2006) to enhance its technological capabilities and competitiveness of local industries. Like many of the developing countries, Malaysia has limited resource capacities in terms of research and development (R & D) base, limited investment in R&D, production and manufacturing capability, and weak infrastructure and technological advantage (Lado and Vozikis, 1996; Tepstra and David, 1985). The presence of MNCs in Malaysia as the technology supplier is crucial because not only they own, produce and control bulk of the world technology but they have also undertaken almost 80% of all private R&D expenditures worldwide (Dunning, 1993). In order to realize its aspiration of becoming a developed and industrialized nation in 2020, Malaysia has no alternative but to aggressively develop and sustain its own technology by embarking on appropriate technology transfer (TT) strategies and initiatives. Thus, as a way to build the technological capacity, strengthen their core competencies, and expend into technological field which are critical for maintaining and developing the market share, the Malaysian companies and industries greatly need foreign technologies to achieve this objectives (Wagner and Yezril, 1999). The important role of MNCs as the main source of technology has been affirmed by the previous studies. The presence of MNCs is regarded as the most efficient vehicle for transferring technology and knowledge across border through FDIs and IJVs (Tihanyi and Roath, 2002; Kagut and Zander, 1993).
48
Past studies have shown that foreign MNCs in Malaysia have successfully transferred their technology to local industries (Lai and Narayanan, 1997, Narayanan and Lai, 2000). Through technology transfers by MNCs the host country would benefits in achieving long term economic growth (Marton, 1986; Blomstrom, 1990), providing a higher potentials of innovation performance/capabilities (Guan et al., 2006; Kotabe et al., 2007)), increasing technological capabilities (Kumar et al., 1999; Madanmohan et al., 2004), enhancing the 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). In addition, other studies have proposed TT as one mechanism by which developing countries can break vicious cycle of economic underdevelopment (Lado and Vozikis, 1996; Samli, 1985). However, few recent studies have concluded that the TT agent such as FDIs, JVs, and licensing operations have not succeeded in helping to develop indigenous capabilities even though they have significantly contributed to the impressive economic growth performance in Malaysia (Malairaja and Zawdie, 2004). During the Asian economic crisis in 1997-1998, which has brought the host country economy vulnerable to changes in investors sentiment and foreign competitions, the international TT through FDIs do not sufficiently help to develop the indigenous capabilities (Lee and Tan, 2006). Thus, learning from past experience, the companies in the developing countries such as Malaysia should re-strategize their TT policies and strategies by not only understanding, identifying and examining the critical TT determinants characteristics that may have significant effect on the TT outcome but also studying the boundary conditions for the relationship. TT should not only focus on TT as an efficient vehicle to generate economic growth performance but more importantly it must also be capable in developing indigenous capabilities and organizational competitiveness. Before embarking on any 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. This is because TT success is determined by the substantial 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). 49
Based on a review of literature, bulks of the previous literature are concentrating more on the macro-economic or institutional factors (Contractor and Sagafi-Nejad; 1981, Marton; 1986). Due to the diverse environmental factors which impede TT success the factors that influence TT have become important (Cui et al., 2006). Since the TT literature is extensive and varied in perspective, this study has specifically focused on inter-firm TT across organizational boundaries via IJVs based on the underlying knowledge-based view (KBV) and organizational learning (OL) perspectives. Thus, while acknowledging the significance of other perspectives of TT they are indeed beyond the scope of this study. The presence of the MNCs through various formal market channels such as direct exporting of capital goods and products, foreign direct investments, licensing, and IJVs with local firms have become the primary sources of technology for the local technological development and national economic growth. Many studies on intra and inter-firm TT have shown that TT involves a complex and difficult process even when it occurs across different function within a single product division of a single company. Thus, the current issue is centered on the effectiveness, efficiency and successful implementation of TT and no longer on whether MNCs are transferring their technologies to the Malaysian industries (Lai and Narayanan, 1997). TT success depends heavily on interactive communications between the technology supplier and recipient which requires both parties involvement (Gibson and Slimor, 1991). Previous studies have also indicated that MNCs as the reluctant technology supplier have been slow in transferring technology and R&D expertise to local industries due to the risk of technology spillovers (Lai and Narayanan, 1997). The foreign MNCs often face a tradeoff between transferring their valuable technologies to their counterpart and protecting the technologies as the source of their competitive advantage. In this situation the MNCs have repeatedly claimed that it is not a question of their willingness to transfer technologies rather the transferring process is mainly hampered by low maturity level of the Malaysian industry which is largely due to insufficiency of skilled personnel and weak institutional support and business environment (Rasiah and Anuwar, 1998). When compared to the U.S MNCs, the TT by the Japanese MNCs are found to be less intensive, slower, and technologies are normally been transferred within their keiretsu (Raduan, 2002; Yamashita, 1991, Hamel 1991). In fact according to Taylor (1995) the Japanese MNCs, to some extent, have no intention to transfer key aspects of their technology in order to maintain their 50
dominance in Southeast Asian economies. From KBV perspective studies have acknowledged that MNCs tend to be more protective of their advance technology, knowledge and competencies in products, processes and management because these strategic valuable resources and competencies are their main sources of competitive advantage (Barney 1991; Peteraf, 1993; Pralahad and Hamel, 1990; Dierickx and Cool, 1989). On the other hand, studies from the OL perspective have suggested that the technology suppliers tend to protect their technology and knowledge from the recipient when they become opportunistic in the collaborative relationship (Inkpen, 1998a; Inkpen and Dinur, 1998; Child and Faulkner, 1998). Based on the above scenarios, a number of TT issues require further theoretical and empirical explanations. Specifically, in the context of inter-firm TT through IJVs, the existing question is on the extent of TT by the supplier partner when transferring their advance technology to local recipient partners, especially the transfer of tacit knowledge which has a high content of ambiguity, complexity, and specificity. The current TT issue in JV thus focuses on the extent of degree of technologies that being transferred by the technology supplier to technology recipient partners in terms of tacit knowledge (new product/service development, managerial systems and practice, process designs and new marketing expertise), and explicit knowledge
(manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how). Since JVs are frequently perceived as instable organization, the degree of technology transferred in JVs often involves a tradeoff between transferring technology and protecting proprietary technology/knowledge by the supplier. From the technology recipient s perspective, TT success includes the ability to learn, acquire, absorb and apply new external technologies and knowledge embedded in product materials, physical assets, processes and production, and management capabilities and not limited to possessing the ability to operate, maintain or repair the machineries in the production level. Secondly, past studies on intra and inter-firm knowledge transfer have established the significant effects of technology actors and facilitators/barriers such as the characteristics of knowledge transferred, source, recipient and contextual/relational in the knowledge transfer process (Szulanski, 1996, 2000, 2003; Gupta and Govindarajan, 2000; Minbaeva, 2007). Thus, in the context of inter-firm TT in JVs, where TT processes are more complicated, difficult and involved the process of transferring technology between unaffiliated organizations, the remaining issue is 51
on the extent of significant effects of technology transfer characteristics (TTCHARS) on degree or amount of technology transfer (TTDEG). To put it differently to what extent the TT characteristics have significantly affected TT outcomes? Thirdly, since JVs is one of the formal and externalized mechanisms of TT which directly affect performance, the intriguing issue is on the extent of TTDEG in affecting the performance of local firms (LFP); specifically on how TTDEG helps to improve the local companies corporate and human resource/competencies performance. Finally, although previous studies have acknowledged the significant effects of knowledge transfer determinants on knowledge transfer outcomes, nevertheless the effects of TTCHARS on TTDEG in inter-firm TT through JVs could have possibly be moderated by other important factors such as size of MNCs, age of JV, MNCs country of origin, and MNCs types of industry. Thus, in other words the variations in TTDEG s outcome could have been significantly influenced by these variables. Past studies have established that the issue of effectiveness and efficiency of inter-firm TT between foreign MNCs and local recipient s firm in JV with the facilitators/barriers that impede TT (the transfer process) and knowledge acquisition (the absorption process) 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). In the strategic alliance set-up such as IJVs, these facilitators/barriers to transferability could facilitate or impede inter-firm TT and knowledge acquisition resulting in the higher/lower degree (amount) of technology transfer to the recipient. Since the co-existence of these determinants is interrelated with each other, therefore the ineffectiveness of any characteristic would cause interfirm TT and knowledge acquisition in JVs to be less successful and effective. As inter-firm TT in JVs involves more complex and difficult processes as compared to intra-firm TT, these facilitators/barriers, which are attributed to the TTCHARS, require close theoretical explanations to describe the relative influence of each characteristic of TT and their combine/joint effects on TTDEG. Through the conceptual explanations on the individual and joint effects of each TTCHARS characteristic on TTDEG the recipients organizations/firms are unable to get first hand information and understanding before reviewing, designing and formulating new TT policies and 52
strategies in order to achieve a higher level or amount of technology transfer in JVs, increase the overall local companies competitiveness, productivity, and performance, enhance knowledge acquisition by the local companies, help to develop indigenous technological capabilities of the local work force, and stimulate local innovation capability. Thus, building on intra and inter-firm TT literature, this study advances a holistic model of TTCHARS-TTDEG by proposing that 1) all the TTCHARS, which include the knowledge transferred (KCHAR), technology recipient (TRCHAR), technology supplier (TSCHAR), and relationship (RCHAR) characteristics, are critical in affecting TTDEG in JVs, 2) TTCHARS-TTDEG relationship could possibly be moderated by certain factors, and 3) TTDEG affects the LFP. In this conceptual study, inter-firm TT is defined as the transfer of technological knowledge, information and know-how that are transferred across organizational border by the technologysupplier; where the technology recipients firms have effectively acquired, learned and absorbed knowledge and technology 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). Since technology is an abstract subject, TTDEG is operationalized as the degree of technological knowledge from two dimensions: 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 know-how. JVs are referred to as a form of international collaborative/cooperative efforts 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, share their respective resources, skills and expertise (Beamish and Bedrow, 2003; Ibrahim and Mcguire, 2001).
THEORETICAL DEVELOPMENT AND HYPOTHESES

The main theories underpinning the relationships of variables in the conceptual framework of this study are knowledge based view (KBV) and organizational learning (OL) perspectives. The perspective of KBV underlies the relationships between the KCHARS and subindependent 53
variables: Tacitness (TCT), Complexity (COMPLX) and Specificity (SPEC), and dependent variable - TTDEG. Both KBV and OL perspectives underlie the relationships between the TRCHARS and sub-independent variables: Absorptive Capacity (ACAP) and Recipient Collaborativeness (RCOL) and TTDEG. The relationships between the TSCHAR and subindependent variables: Partner Protectiveness (PPROTEC) and Transfer Capacity
(TRANSCAP), and TTDEG are governed by both KBV and OL perspective. The OL perspective underlies the relationship between RCHAR and sub-variables: Relationship Quality (RELQLTY) and Mutual Trust (MT). Figure 1 below depicts the relationships between the variables in the study s conceptual framework. Figure 1: The Holistic Model of TTCHARS-TTDEG-LFP in IJV
KCHAR . Tacitness *(KBV Perspective) . Complexity *(KBV Perspective) H1 . Specificity *(KBV Perspective) TRCHAR . Absorptive Capacity *(KBV Perspective) . Recipient Collaborativeness *(OL Perspective) TSCHAR . Partner Protectiveness H3 *(OL Perspective) . Transfer Capacity *(KBV Perspective) RCHARS . Relationship Quality *(OL Perspective) . Mutual Trust *(OL Perspective) H4 Moderating Variables . Country of Origin . Types of Industry H2 H5 Moderating Variables . Firm Size . Age of JV H1 H7 H8
Degree of Technology Transfer
Tacit Knowledge Explicit Knowledge
Corporate Performance H6
Local Firms Performance

Human Resource Performance
H3 H9 H10
54
KNOWLEDGE CHARACTERISTICS TRANSFER
AND
DEGREE
OF
TECHNOLOGY
The first characteristic of TT this study investigates is knowledge characteristics (KCHAR). The KCHAR form the first group of TT characteristic in this study. Based on a literature review, KCHAR that have been identified include 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) and availability (Minbaeva, 2007). Knowledge tacitness, specificity and complexity have contributed significantly to knowledge ambiguity in imitation (Reed and DeFillippi, 1990), and knowledge migration (Szulanski, 1996). Building 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), this study conceptualizes that the three critical dimensions of KCHAR: Tacitness (TCT), Complexity (COMPLX) and Specificity (SPEC) have a significant negative impact on degree of technology transfer (TTDEG). Knowledge has been classified using many different dimensions and 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 (TCT) is derived 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 context-specific knowledge, embedded in non-standardized and tailored process, and is difficult to acquire and exploit (Polanyi, 1967). Tacit knowledge derives from the accumulated experience, and is reflected in the expertise, skills and routines acquired by organizational members over time (Winter, 1987). Past studies have established that tacit knowledge, which includes insights, intuitions and hunches, rule of thumb, gut feeling, personal and organizational skills (Nonaka, 1994), managerial and marketing expertise (Lane et al., 2001), is difficult to codify: where it can only be observed through its application and acquired through practice.
55
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 efforts or resources are invested to acquire them within a short period of time (Dierickx and Cool, 1989; Lin, 2003) because tacit knowledge is unique to the knowledge owner and not codifiable in formulas or manuals and cannot be reverse-engineered easily (Zander and Kogut, 1995). Tacit knowledge which is hard to formalize, often sticky and not easily visible, is difficult to communicate, transfer and share between the alliance partners as it involves 1) intangible factors embedded in the personal beliefs, experiences, 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 the knowledge to a specified location in a form usable by a given party (von Hippel, 1994). A number of literature has described complexity (COMPLX) from many dimensions for example: 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 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). It is argued that the higher the degree of COMPLX of the manufacturing technology, the more difficult for knowledge to be transferred or imitated (Kogut and Zander, 1993). Specificity (SPEC) originally refers to transaction costs asset specificity as popularized by Williamson (1985). Asset SPEC which includes site, physical, dedicated and human assets refer to durable investments that are undertaken in support of particular transaction (Williamson, 1985). Building on Williamson (1985), Reed and DeFillippi (1990) define SPEC as transaction56
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 firm s 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 specifically designed for the production of goods and services for a specific customer, and human asset SPEC is 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 acted as a source of causal ambiguity and barrier to imitation, where technology is difficult to be explicitly articulated (Lippman and Rumelt, 1982), but also 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 to the firm (Kogut and Zander, 1993). Firms create sustainable competitive advantage by developing firms assets and competencies that are firm-specific, produce complex social relationships i.e. firm-customer relationship, embedded in a firm s history and culture, generate organizational tacit knowledge and time consuming to develop (Lado and Wilson, 1994; Dierickx and Cool, 1989; Kogut and Zander, 1993). H1: Knowledge characteristics, which comprise of tacitness, complexity, and specificity, have a negative effect on degree of technology transfer in JVs.
TECHNOLOGY RECIPIENTS TECHNOLOGY TRANSFER
CHARACTERISTICS
AND
DEGREE
OF
The characteristics of technology-recipient (TRCHAR) have been affirmed by many studies as the important factors that affect knowledge transfer. The TRCHAR form the second group of characteristic of TT in this study. The recipient s 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 57
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). This study conceptualizes the two critical dimensions of TRCHAR: Absorptive Capacity (ACAP) and Recipient Collaborativeness (RCOL) to have a positive impact on 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 depends on the degree of their absorptive capacity (ACAP). Past studies have shown that a low degree of the technology-recipient s ACAP impedes both intra-firm 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). The concept of ACAP has been extensively examined in both theoretical and empirical studies. In their seminal paper, Cohen and Levinthal (1990) define ACAP as the firm s 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 firm s level of prior related knowledge. Prior related knowledge is closely related to the individuals units of knowledge available within the organization. The accumulation of prior knowledge will increase the ability to make sense of, assimilate and use new knowledge (Kim, 1998). The firms ACAP tends to be developed cumulatively, in which absorptive capacity 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 Lavinthal, 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 organization to assimilate and exploit new knowledge (Cohen and Lavinthal, 1990; Szulanski, 1996, 2003; Minbaeva, 2007). By possessing sufficient prior related knowledge, which is closely associated 58
with new knowledge, the organization will have adequate ability to absorb new technological and innovative competencies/capabilities (Cohen and Lavinthal, 1990). The recipient collaborativeness (RCOL) is mostly involved inter-firm knowledge transfer between partners in collaborative relationship such as strategic alliances and joint ventures. In intra-firm knowledge transfer, firms are expected to encounter fewer problems when transferring technology to their own subsidiaries and affiliates within the organizational boundaries. Strategic alliances provide an ideal platform for organizational learning especially through IJVs where partners firms can acquire, learn, create new knowledge, and transfer knowledge between them (Inkpen, 2000). Nonetheless, strategic alliances face a tradeoff between the opportunities for generating and sharing knowledge and the propensity that the partner may tend to behave opportunistically (Child and Faulkner, 1998). Building on the 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 partners learning objective/intent is collaborative (complementary) or competitive (Child and Faulkner, 1998). H2: Technology recipient characteristics, which comprise of absorptive capacity and recipient collaborativeness, have a positive effect on degree of technology transfer in JVs.
TECHNOLOGY SUPPLIERS TECHNOLOGY TRANSFER
CHARACTERISTICS
AND
DEGREE
OF
The technology suppliers characteristic (TSCHAR) is the third group of TT characteristics in this study. The two critical dimensions of TSCHAR under study are Partner Protectiveness (PPROTEC) and Transfer Capacity (TRANSCAP). 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 59
(Subramaniam and Venkataraman, 2001), transferor s 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 a significant influence on knowledge transfer. A review of literature shows that TSCHAR have been studied from many aspects of suppliers behaviors. Previous studies on the suppliers behaviors, which are largely theoretical and casebased, suggest different conclusions on the suppliers behaviors because there have been no consensus on the appropriate definition and measure of the concept (Minbaeva, 2007). The technology-supplier, as a source of knowledge, 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 also be willing to support and co-operate with the local partner in transferring technological knowledge (Simonin, 1999a). This study conceptualizes that the two critical behavioral characteristics namely, PPROTEC and TRANSCAP, as the vital technology-supplier characteristics in facilitating inter-firm technology transfer. The ability of a firm to acquire knowledge in the cooperative arrangement such as joint venture is not solely depending on its internal ACAP. The inter-firm learning opportunity provided by strategic alliance is also subjected to degree of willingness of the technology-supplier to cooperate or engage in sharing knowledge i.e. to reduce the level of protectiveness (Simonin, 1999a; Steensma and Lyles, 2000). One of the critical elements of technology-supplier characteristic is partner protectiveness (PPROTEC) which is beyond the technology-recipient s control. PPROTEC has been found to have a significant impact on both intra and inter-firm knowledge transfer (Simonin, 2004; Szulanski, 1996). PPROTEC refers to as the extent of protections/hurdles, intentionally or unintentionally, imposed by the foreign partner on the local partner in an IJV which restrict the accessibility to proprietary technology/knowledge (Hau and Evangelista, 2007). PPROTEC is significantly relates to the 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 corporate supervisors is
60
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 relationship such as JV are expected to mutually exchange their valuable or proprietary assets, resources, information, knowledge and technology between them in order 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 partner; and for fear of losing ownership, a position of privilege and superiority of their valuable assets they tend to protect their hard-won success and competencies from the opportunistic behaviors of the recipient partner (Parkhe, 1993; Steensma and Lyles, 2000; Szulanski, 1996). The foreign parent firm may intentionally restricts knowledge flow to the JV because cooperation through JVs is viewed as a low cost approach for the local firms to gain competencies (Hamel et al., 1989; Simonin, 1999a, 2004; Steensma and Lyles, 2000) unless they have sufficient incentive to mitigate the cost typically associated with the transfer (Dyer and Singh, 1998). Partners in the strategic alliance, due to the risk of knowledge spillover/leakage, tend to be more protective of their valuable knowledge resources as their competitiveness is very much depending on these 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 use it against the proprietor or supplier firms (Cohen and Lavinthal, 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 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). As 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 the recipient becomes critical in inter-firm TT. Several studies have suggested that while firms differ in their ability in knowledge creation, they also differ in their ability to transfer knowledge (TRANSCAP) within or outside of the organizational boundary (Kogut and Zander, 1992, 1993; Szulanski, 1996). The efficiency in transmitting 61
technology or knowledge by the supplier is important in both intra and inter-firm knowledge transfer as it affects the TT outcomes. The firms ability to transfer knowledge to their subsidiaries efficiently and effectively can serve 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 firms ability to transfer knowledge facilitates the organizational learning process and justifies their commitments in the collaborative relationship: where all partners are expected to mutually contribute their knowledge, technologies, skills and competencies to the JVs to gain mutual benefits (Inkpen, 1998a, Inkpen 2000; Khanna et al., 1998; Child and Faulkner, 1998). Past studies have described TRANSCAP from many dimensions for example: 1) the source (supplier) not perceived as reliable (Szulanski, 1996), 2) the firms ability to articulate uses of their own knowledge, assess the needs and capabilities of the potential recipient, and transfer knowledge to different location (Martin and Solomon, 2003), 3) a disseminative capacity of the knowledge sender in terms of the source s ability and willingness to share knowledge (Minbaeva and Minhailova, 2004), 4) the sender s ability to articulate and communicate knowledge to the recipient (Minbaeva, 2007), 5) the parent firms capacity to knowledge transfer (Wang et al., 2004), and 6) the source s motivational disposition (Gupta and Govindarajan, 2000). H3: Technology supplier characteristics, which comprise of low degree of partner protectiveness and transfer capacity, have a positive effect on degree of technology transfer in JVs.
RELATIONSHIP CHARACTERISTICS TRANSFER
AND
DEGREE
OF
TECHNOLOGY
A stream of literatures on intra and inter-firm knowledge transfer has identified many aspects of RCHAR. The RCHAR form the fourth group of TT characteristic in this study. From a review of literature among the RCHAR that have been identified are 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 62
(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). The present study conceptualizes that the two important aspects of RCHAR: Relationship Quality (RELQLTY) and Mutual Trust (MT) are expected to have a positive impact on TTDEG. In order to facilitate intra and inter-firm TT, both technology-supplier and technology-recipient are expected not only to establish a close relationship between them but also develop relationship quality (RELQLTY). For firms which have differences in terms of the organizational structures, cultural backgrounds, experiences, capabilities, learning intent and technological resources, transferring technology is rather a challenging process (Argote, 1999; Hamel, 1991). As knowledge is a firm-specific, embedded in firm organizational context, personal quality in nature and idiosyncrasy (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). The importance of numerous individual exchanges in transferring tacit knowledge within organization is achievable through ease of communication and intimacy of relationship
between the source and recipient unit and thus a problematic relationship between the source and recipient will 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 communications links is captured and or operationalized as informality, openness and density of communications . Informality, openness and communication density are closely related to relationship quality as they indicate higher degree of involvement and interaction frequency between the sender and receiver, increase the openness of communication, spontaneous and open exchange of information and ideas between the interacting parties, and the potential for numerous individual exchanges (Szulanski, 1996; Nonaka, 1994; Lin, 2005; Gupta, 1987). Wang et al. (2004) suggest 63
that effective transfer of managerial knowledge by MNCs to Chinese subsidiaries is not only depending on the adequate presence of expatriates but also productive interaction between the expatriates and their Chinese counterpart. From the inter-firm transfer context, Lin (2005) categorizes quality interaction in terms of its frequency, adequacy, amiability and constructiveness. Bresman et al. (1999) argue that communication involves two distinct but overlapping stages. First, the post integration process: which is largely depending on an effective, extensive and intensive communication between the acquirer and acquired units; and second, the tacit knowledge transfer process: which requires intensive communication and frequent interaction between the transmitting and receiving parties. Strategic alliance literatures have 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 directly affects the willingness and ability of alliance partners to share information and communicate openly (Inkpen, 1998a, 2000). Inter-partner mutual trust (MT) is critical in the collaborative relationship as MT: 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 and interorganizational learning (Glaister et al., 2003; Inkpen and Tsang, 2005), and 8) fosters norms of reciprocity (Nahapiet and Ghoshal, 1998). 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 or transparency which determines the willingness to exchange, share and transfer knowledge between alliance
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partners is primarily hindered by a mutual suspicion of opportunistic behaviors between them (Kale et al., 2000). In the cooperative ventures such as IJVs mutual trust, which derives from the existence of personal attachment, contributes to more willingness to transfer knowledge between alliance partners (Luo, 2001). High degree of MT indicates that the partners in a collaborative relationship accept each other as an ally not as competitor (Powell et al., 1996), signifies the partners commitment not to take advantage on the other partner s weaknesses and or vulnerabilities (Steensma and Lyles, 2000), and contributes to information learning and sharing: when partners are less suspicious of the other partner s 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 or transparency in knowledge sharing and learning, and limit the information s accuracy, 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 interpartner trust may also generate inter-firm conflicts, increase partners opportunistic behaviors and eventually erode mutual trust (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 joint ventures as no contracts/agreements can cover all the variations and conditions that can occur (Dhanaraj et al., 2004). H4: Relationship characteristics, which comprise of relationship quality and mutual trust, have a positive effect on degree of technology transfer in JVs.
TECHNOLOGY TRANSFER TECHNOLOGY TRANSFER
CHARACTERISTICS
AND
DEGREE
OF
Building on intra and inter-firm knowledge transfer literature, TTCHARS which formed the study s conceptual framework, are viewed as both the critical facilitators/determinants of TT and barriers to TT (Szulanski, 1996). The TTCHARS are inter-dependent, co-exist and closely 65
related to each other where failure to manage any of TT characteristic will affect the TT outcomes. Previous studies on intra and inter-knowledge transfer have acknowledged the significant influence of these facilitators on TT s success or failure (Szulanski, 1996, 2000, 2003; Gupta and Govindarajan, 2003; Minbaeva, 2007; Hamel, 1991; Inkpen, 1998, 2000). For technology acquisition to happen in IJVs, technology must be first accessible by the learning partner. In a collaborative/cooperative learning environment as opposed to competitive learning, the transferring partner is more transparent and willing to share/transfer their proprietary knowledge, competencies and skills although they are organizationally embedded in the organization s 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 influenced by the learning intent of the learning partner and interpartner 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 opportunistic partner who perceives JV as a low cost approach to internalize partner s competencies (Hamel, 1991; Simonin, 1999a, 2004; Steensma and Lyles, 2000). The JV partner s learning intent also determines the TRANSCAP of the transferring partner in terms of motivation to transfer technology. MT between IJV s partners is important in reducing the fear of opportunistic behaviors of the learning partner, promotes greater transparency which may contribute a higher degree of accessibility to partner s technological knowledge, and motivate the transferring partner to share and transfer higher technology (Inkpen, 1998; 2000). As a result of the collaborative learning intent, RELQLTY promotes a higher degree of MT and 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 to ensure a higher TTDEG (Cohen and Lavinthal, 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 66
knowledge involves various organizational levels and personal interactions between individuals and groups. Thus, knowledge connection and knowledge relatedness between JV partners are capable in creating potentials for the sharing of more personal observations and experiences (Von Krogh, 1994; Inkpen 2000). Although TCT, COMPLX and SPEC contribute to technology ambiguity and barriers to TT, these barriers to technological gap 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 the previous theoretical and empirical studies, this study proposes the following hypothesis: H5: Technology transfer characteristics, which comprise of knowledge transferred, technology recipient, technology supplier and relationship characteristics, have a positive effect on degree of technology transfer in JVs.
DEGREE OF TECHNOLOGY TRANSFER AND LOCAL FIRMS PERFORMANCE

A review of 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 (for example Lyles and Salk, 1996; Lane et al., 2001; Tsang et al., 2004; Dhanaraj et al., 2004; Steensma and Lyles, 2000). On the other hand, the performance of the MNCs subsidiary and affiliate in the host countries has become the primary focus of intra-firm knowledge transfer literature (for example Chen, 1996; Chung, 2001; Ofer and Potterovich, 2000; Cui et al., 2006; Lin, 2003). Most of the studies on strategic alliance and IJVs have recorded positive impact of knowledge acquisition or transfer on IJVs performance for example: 1) knowledge acquisition has a positive impact on the IJVs human resource, general and business performance (Lyles and Salk, 1996), 2) knowledge acquisition as a better predictor for human-resource related performance than the general and business performance (Lyles and Salk, 1996), 3) knowledge acquisition from parent firms has a significant positive effect on IJVs performance (Lane et al., 2001; Tsang et al., 2004), and, 4) tacit and explicit knowledge acquisition have a positive impact on IJVs performance (Dhanaraj et al., 2004). However, there 67
have been inadequate studies on direct effect of technology or knowledge transfer on LFP. Only Yin and Bao (2006) find tacit knowledge acquisition has significantly affected LFP. H6: Higher degrees of technology transfer in JVs, which comprise of degree of tacit and explicit knowledge, has a positive effect on local firms performance.
MODERATING EFFECT OF SIZE OF MNCs

Past studies have acknowledged the effect of MNCSIZE on both intra and inter-firm knowledge transfer 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, because of the availability of high number of resources and expertise, are capable to transfer more/higher technology and knowledge than small firms. Hagedoorn and Schakenraad (1994) find a strong positive effect of MNCSIZE on the intensity of strategic partnering and technological cooperation because large firms have substantial administrative, organizational and monitoring supports to form an alliance. Generally, small firms do not have adequate resources and are likely to transfer knowledge and technology through arm s length licensing agreements (Stobaugh, 1988). MNCSIZE affects the propensity of the firm to develop competitive advantage and achieves the above-average performance (Porter, 1980). The strategy literatures also regard MNCSIZE as the important contingency variable with respect to governance, levels of diversification and resistance to organizational change (Hoskisson et al., 1994), influence intrafirm knowledge transfer, and as an impediment to organizational learning (Marquardt and Reynolds, 1994). In the context of strategic alliance, MNCSIZE has been considered 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). H7: The relationship between technology transfer characteristics and degree of technology transfer is moderated by size of MNCs.
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MODERATING EFFECT OF AGE OF JV

JVAGE or JV s duration is expected to influence the relationships between TTCHARS and TTDEG (Foss and Pedersen, 2002). The longer the collaborative relationship, the greater opportunity for JV s partners to share, learns, and transfer technology and knowledge between them (Kale et al., 2000). However, Kale et al. (2000) caution that longer duration of JV relationship could increase the propensity of losing the valuable proprietary asset to the JV s partner. Gomez-Mejia and Palich (1997) posit that the subsidiary maturity in the local market provides capabilities in overcoming the negative impacts of cultural difference through deliberate strategies. From the strategic alliance context, studies have shown that age of alliance as an important variable because, as the alliance sustains over the years, cultural distances tend to decrease (Meschi, 1997), the inter-partner trust intensifies (Gulati, 1995), relative bargaining power between partner changes (Yan and Gray, 1994), alliance partners develop personal attachment (Inkpen and Beamish, 1997), partner becomes more familiar with each other s expertise and idiosyncrasies (Simonin, 1999a), and older IJVs are likely to leverage the acquired knowledge and convert it to competitive advantage (Tsang et al., 2004). However, few researchers have cautioned that as alliances are perceived as a race to learn ; where 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 thus may contribute to a shift in the partners bargaining power associated with the acquisition of knowledge and skills that allows a firm to eliminate a 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 more efficient at what they already do, and 2) studies have shown that the relationship duration in JV 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 compromise (Lin and Germain, 1998). H8: The relationship between technology transfer characteristics and degree of technology transfer is moderated by age of JV. 69
MODERATING EFFECT OF MNCs COUNTRY OF ORIGIN

Many empirical studies have established that MNCCOO (nationality) 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 the MNCs operate (Gupta and Govindarajan, 2000). Problems related to cultural differences, opinions, beliefs, and attitude 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, impede the inter-partner learning and knowledge transfer (Mowery et al. 1996). However, Yin and Bao (2006) find nationality of alliance s partners (the U.S, Japan and Western firms) has no significant effect on the relationships between the supplier and recipient factors and tacit knowledge acquisition. H9: The relationship between technology transfer characteristics and degree of technology transfer is moderated by MNCs country of origin.
MODERATING EFFECT OF MNCs TYPES OF INDUSTRY

Based on the economic theory, MNCs have become increasingly important due to ineffectiveness and inefficiency of the external market to facilitate intra-knowledge transfer (Caves, 1982; Hymer, 1960; Kindleberger, 1969). Empirical examination of the economic theory has consistently found that industries characterized by greater degrees of knowledge intensities (industries with higher R&D-to-sales-ratios and/or higher advertising-to-sales ratios) have the propensity to become more global than other industries (Gupta and 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 intensity and advertising intensity industries (Gupta and Govindarajan, 2000), 2) metal and 70
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). H10: The relationship between technology transfer characteristics and degree of technology transfer is moderated by MNCs types of industry.
CONCLUSION
Building on intra and inter-firm KT literature (Szulanski, 1996; Gupta and Govindarajan, 2000; Minbaeva, 2007; Tiemessen et al. 1997; Inkpen 2000), the present study extends the literature by conceptualizing the effects of four critical dimensions of TTCHARS (KCHAR, TRCHAR, TSCHAR, and RCHAR) on TTDEG in a single holistic model to identify the relative and simultaneous influence of each group of TTCHARS on degree of inter-firm TT in IJVs. Secondly, this study also extends the literature by responding to the limitations highlighted by the researchers in the area that studies on inter-firm TT and KT, and knowledge acquisition require more hypothesis development and testing (Huber, 1991; Fiol, 1994), the cross border TT and KT from MNCs to local firms has not been extensively researched (Pak and Park, 2004), and fewer studies adopt the local firms or recipient s perspective (Yin and Bao, 2006). Thirdly, previous studies on KT are limited to selected functional expertise such as technological learning (Lin, 2007), managerial knowledge (Si and Bruton, 1999; Tsang 2001; Luo and Peng, 1999; Liu and Vince, 1999; Lin, 2005), managerial skills (Wong et al., 2002), technology or manufacturing know how (Lam, 1997; Bresman et al., 1999), business environment and product market knowledge (Geppert and Clark, 2003), marketing knowledge (Simonin, 1999b; Wong et al., 2002), and research and development (Cummings and Teng, 2003; Minbaeva, 2007). Thus, since technology is an abstract subject, this study has further extended the literature by operationalizing TTDEG from two distinct dimensions namely degree of tacit and explicit knowledge and conceptualized the effect of TTCHARS on TTDEG and its two dimensions.
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Fourthly, based on a review of literature, except for Yin and Boa (2006) who examined the effect of tacit knowledge acquisition on local firms performance, very few intra and inter-firm studies have examined the impact of TT, specifically the effect of TTDEG on organizational performance. For example empirical studies by Szulanski (1996), Minbaeva et al. (2003), Pak and Park (2004), Hau and Evangelista (2007) and Minbaeva (2007) are mainly focusing on KT outcomes. This study extends the inter-firm TT and KT literature by conceptualizing local firms performance from two dimensions namely corporate (CPERF) and human resource (HRPERF) performance. In specific this study has contributed to the expansion of TT literature by conceptualizing the effects of TTDEG on LFP in terms of corporate performance, and 2) human resource/competencies performance. Finally, from a review of literature there have been limited studies that have included moderating variables in the previous TT frameworks. Thus, this study conceptualizes the moderating effects of MNCSIZE, JVAGE, MNCCOO, and MNCIND on TTCHARS-TTDEG relationship. Since the effects of TTCHARS and their dimensions on TTDEG and its dimensions have never been previously examined, thus the inclusion of moderating variables (MNCSIZE, JVAGE, MNCCOO, and MNCIND) in the framework also has extended inter-firm TT literature by providing new plausible explanations on the boundary conditions of the TTCHARS-TTDEG relationship.
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4
A Holistic Model of Inter-Firm Technology Transfer Based on Integrated Perspectives of Knowledge-Based View and Organizational Learning
CHAPTER OUTLINE
The objective of this work is to propose a holistic model of inter-firm technology transfer (TT) based on an integrated knowledge-based-view (KBV) and organizational learning (OL) perspectives in conceptualizing the critical links between technology transfer characteristics: knowledge, technology recipient, technology supplier and relationship characteristics (TTCHARS) and degree of technology transfer (TTDEG) in international joint ventures (IJVs). Since the current TT issue now is centered on efficiency and effectiveness of technology transfer as an efficient formal vehicle to internalize foreign technologies as compared to direct import of goods, licensing and foreign direct investment, the advancement of the holistic model is to provide a complete view on the significant effect of technology transfer characteristics and their dimensions on degree of technology transfer in IJV which eventually could contribute to the increase of local companies competitiveness, indigenous technical capabilities, technological development, and potential for local innovation. In the study s model, hypotheses are developed to describe the relationships between TTCHARS and TTDEG based on the underlying KBV and OL perspectives.
INTRODUCTION The presence of the

MNCs through various formal market channels such as direct export of
capital goods and products, foreign direct investments, licensing, and IJVs with local firms have become the primary sources of technology for local technological development and national economic growth (Marton, 1986). The inter-firm technology transfers (TT) in collaborative joint
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ventures (JVs) often involve tradeoffs between the willingness of technology supplier to transfer a considerable amount of their technologies to technology recipient and degree of protection of the proprietary technology, knowledge and competencies as the source of the supplier s competitive advantage (Inkpen, 2000; Hamel, Doz, and Pralahad, 1989). Technology transfers through JVs, although have been acknowledged in many studies as the most efficient mechanism in internalizing the partner s technologies, knowledge and skills, have frequently involved various facilitators, actors and complex relationship between partners that have direct impact on the degree or amount of technology transferred in JVs (Szulanski, 1996; Inkpen, 2000). Past studies view that TT by MNCs to developing countries as a dynamic and on-going process (Shiowattana, 1987; Methe, 1991). Many studies on intra and inter-firm TT are in consensus that TT is a complex and difficult process even when it occurs across different functions within a single product division of a single company (Gibson and Slimor, 1991; Kidder, 1981; Smith and Alexander, 1988). The current issue is no longer whether MNCs are transferring their technology to the Malaysian industries; rather the issues are centered on the effectiveness, efficiency and success of implementation of TT (Lai and Narayanan, 1997). This is because TT s success heavily depends on interactive communications between the technology supplier and recipient which requires both parties involvement (Gibson and Slimor, 1991). Previous studies have also indicated that MNCs are said to be a reluctant technology supplier and have been slow in transferring technology and R&D expertise to local industries due to the risk of technology 'spillovers (Narayanan and Lai, 2000; Ravenhill, 1999; Guyton, 1995; Muller and Schnitzer, 2006). On the other hand, MNCs contend that it is not a question of their willingness to transfer technologies rather the transferring process is mainly hampered by low maturity level of the Malaysian industry which is largely due to insufficiency of skilled personnel and weak institutional support and business environment (Rasiah and Anuwar, 1998). As compared to the U.S MNCs, TT by the Japanese MNCs have been found to be less intensive and slower where technologies are normally transferred within their keiretsu (Raduan, 2002; Yamashita, 1991). The Japanese MNCs for example, to some extent, have no intention to transfer key aspects of their technology in order to maintain their dominance in Southeast Asian economies (Taylor, 1995). 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 the TT 80
practice and the decision to innovate (Malairaja and Zawdie, 2004). In this aspect, the innovation capabilities greatly depend on the local firms ability to understand, assimilate and apply new technology transferred to them (Cohen and Lavinthal, 1990). Studies from KBV perspective have acknowledged that MNCs tend to be more protective of their advance technology, knowledge and competencies in products, processes and management because these strategic valuable resources and competencies are their main sources of competitive advantage (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel, 1990). OL perspective studies have suggested that technology and knowledge are protected by the supplier when the recipients are opportunistic in the collaborative relationship (Inkpen, 1998a; Inkpen and Dinur, 1998; Child and Faulkner, 1998). Thus, based on the above scenarios, three critical issues require serious attention. First, in the context of TT through IJVs, the remaining question is on the extent of TT by foreign MNCs when transferring their advance technology to local recipient partner (Narayanan and Lai, 2000). While realizing that technologies, knowledge, and competencies are the supplier s main source of competitive advantage, the current TT issue in JV revolves around the extent of degree of technologies that are being transferred by the suppliers to recipient partners in terms of tacit knowledge (new product/service development, managerial systems and practice, process designs and new marketing expertise), and explicit knowledge (manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how) (Madanmohan et al., 2004). This is because from the recipient s perspective, TT success is not merely possessing the ability to operate, maintain or repair the machineries at the production level (transmission) but it also includes the ability to learn, acquire, absorb and apply new external technologies and knowledge embedded in product materials, physical assets, processes and production, and management capabilities (absorption) (Davenport and Prusak, 1998, 2000). Second, previous studies on intra-firm knowledge transfer have acknowledged the significant influence of technology actors and facilitators/barriers such as the characteristics of knowledge transferred, source, recipient and contextual/relational in the knowledge transfer process (Szulanski, 1996, 2000, 2003; Gupta and Govindarajan, 2000; Minbaeva, 2007). Thus, in the context of inter-firm TT where technology transfer processes are more complex, difficult and involve the process of transferring technology across the organizational boundary to unaffiliated firms, the prevailing issue is on the extent of significant effects of TT characteristics 81
(TTCHARS) in determining the degree or level of technology transfer (TTDEG). Specifically to what extents do TT characteristics influenced TTDEG? And whether all TTCHARS and their dimensions can predict and explain TTDEG? Finally, since JVs is one of the formal and externalized mechanisms of TT which could directly affect performance, therefore the next intriguing issue is on the extent of TTDEG in affecting the performance of local firms; specifically on how TTDEG could help to improve the corporate and human
resource/competencies performance.
THE INTER-FIRM TECHNOLOGY TRANSFER: THE INTEGRATED MODEL

The main theories underpinning the relationships of variables in the conceptual framework (Figure 1) of this study are knowledge based view (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 dependent variable TTDEG. Both KBV and OL perspectives underlie 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 underlies the relationship between RCHAR and their sub-variables: relationship quality (RELQLTY) and mutual trust (MT). For the TTCHARS-TTDEG relationship, both KBV and OL perspectives are integrated to underlie the relationship. As indicated in Figure 1 below, both KBV and OL perspectives have not only provided a strong foundation for the 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)
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Figure 1: The Inter-Firm TT Integrated Model of TTCHARS-TTDEG-LFP

Knowledge Characteristics Technology Recipient Characteristics Technology Supplier Characteristics Relationship Characteristics Tacit Degree of Knowledge Technology Transfer Explicit Knowledge Corporate Performance Local Firms Performance Human Resource Performance
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 knowledge 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 is embedded in the personal beliefs, experiences, and values of an organization (Inkpen, 1998a, Inkpen and Dinur, 1998). Empirical studies have found support that TCT has a significant
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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 assets (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 is 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 firm s history and culture thus generating organizational tacit knowledge (Lado and Wilson, 1994). As the firm s source of competitive advantage, knowledge or technology which is firm-specific 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 significantly related to degree of technology transfer.
H1a: Knowledge characteristics are significantly related to degree of tacit knowledge. H1b: Knowledge characteristics are significantly related to degree of explicit knowledge. 84
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 recipient s ACAP impedes both intra and inter-firm knowledge transfer (Cohen and Lavinthal, 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 firm s ability to recognize, assimilate, and apply to commercial ends the value of new external information (Cohen and Lavinthal, 1990). Prior related knowledge, as the important element of ACAP, is critical for organizations to assimilate and exploit new knowledge. By possessing sufficient prior related knowledge, organizations are able to have an adequate ability to absorb new external knowledge (Cohen and Lavinthal, 1990). OL literature suggests that another critical element of ACAP is the recipient s firm intensity of efforts. Intensity of effort is reflected on 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 inter-firm 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 recipient s learning intent (competitive vs. collaborative intent). The technology recipient firm s willingness to establish a mutually beneficial and collaborative relationship requires the recipient firm s 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 other s complementarities and provide mutual opportunities to extract potential synergies between their respective competencies (Doz, 1996; Geringer, 1991). Collaborative learning creates an access to the partner s knowledge and skills such as product and process technology, organizational skills, and knowledge about new environments (Inkpen, 1995a). In the collaborative learning environment where the recipient s 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 on the partner s learning intent (competitive vs. collaborative 85
intent), determines the 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 significantly related to degree of technology transfer. H2a: Technology recipient characteristics are significantly related to degree of tacit knowledge. H2b:Technology recipient characteristics are significantly related to degree of explicit knowledge.
Partners in the collaborative relationship such as JV 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). KBV perspective suggests that since the firm s competencies are the sources of technology-supplier s sustainable competitive advantage therefore for fear of losing ownership of their valuable assets they tend to protect their competencies from the opportunist recipient partner (Barney, 1991; Cohen and Lavinthal, 1990; Hamel, 1991). Partner protectiveness (PPROTEC) is closely related to partner s 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 of the researchers are in consensus that the extent of willingness of the JV s partners to share and transfer knowledge depends 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-supplier s transfer capacity (TRANSCAP), many studies have suggested that while firms differ in their ability in creating knowledge, they also differ in their ability to 86
transfer knowledge within or 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 firm s 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 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 significantly related to degree of technology transfer. H3a: Technology supplier characteristics are significantly related to degree of tacit knowledge. H3b: Technology supplier characteristics are significantly related to degree of explicit knowledge.
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 (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). 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 87
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 interfirm 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 alliance s performance (Gulati, 1995), increased alliance s cooperation, improved flexibility, reduced the coordinating activities cost, and increased knowledge transfer and learning (Smith et al., 1995). Empirical studies have found positive impact of 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 significantly related to degree of technology transfer.
H4a: Relationship characteristics are significantly related to degree of tacit knowledge. H4b: Relationship characteristics are significantly related to degree of explicit knowledge.
Building on intra and inter-firm knowledge transfer literature, all technology transfer characteristics (TTCHARS) which formed the study s conceptual framework, are viewed as both the critical facilitators/determinants and barriers to TT (Szulanski, 1996). The TTCHARS are inter-dependent, co-existed and closely related to each other; where failure to manage any of TT characteristic will affect TT outcomes. Previous studies on intra and inter-knowledge transfer 88
have acknowledged the significant influence of these facilitators/barriers on TT s 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 and transfer their proprietary knowledge, competencies and skills although they are organizationally embedded in the organization s 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 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 partner s competencies (Hamel, 1991; Simonin, 1999a, 2004; Steensma and Lyles, 2000). The recipient partner s learning intent also determines the TRANSCAP of the transferring partner in terms of increasing motivation to transfer technology. MT between JV partners is important in reducing the fear of opportunistic behaviors of the recipient partner, promotes greater transparency which may contribute a higher degree of accessibility to partner s technological knowledge, and motivates the transferring partner to share and transfer higher technology (Inkpen, 1998; 2000). As a result of the collaborative learning intent (RCOL), RELQLTY promotes a higher degree of MT and 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 Lavinthal, 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 89
interactions between individuals and groups. Thus, knowledge connection and knowledge relatedness between JV partners are capable of creating potentials for the sharing of 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 gap 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 predictors of degree of technology transfer.
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: Degree of technology transfer, which consists of degree of tacit and explicit knowledge, is significantly related to local firms performance. H6a: Degree of technology transfer, which consists of degree of tacit and explicit knowledge, is significantly related to local firms corporate performance. H6b: Degree of technology transfer, which consists of degree of tacit and explicit knowledge, is significantly related to local firms human resource performance.
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CONCLUSION
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 (Huber, 1991; Fiol, 1994). The major contribution of this conceptual 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 KBV and OL, in explaining the relative relationship (effects) of TT characteristics and degree of TT in a single model (Szulanski, 1996; Minbaeva, 2007). In the context of inter-firm TT and knowledge transfer (KT), there are inadequate studies which examined all the four TT characteristics in a single model. For example, in the context of Korean s IJVs, Pak and Park (2004) examine two determinants of knowledge transfer: 1) relation-specific variables (equity ownership, conflict, and experience) and 2) knowledgespecific determinants (tacitness and absorptive capacity). Another study by Yin and Boa (2006) examines both supplier individual level and recipient s factors that affect tacit knowledge acquisition in China s JVs. In the context of marketing knowledge acquisition, Hau and Evangelista (2007) examine the effect of knowledge seekers, knowledge holders, and contextual factors on explicit and tacit knowledge acquisition through IJVs in Vietnam. Hence, the holistic model advanced by this study extends the theoretical scope of TT and KT literature. From a review of literature, the holistic model of inter-firm TT advanced by this study has never been conceptualized before by previous researchers.
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Part II
Technology Transfer Characteristics and Degree of Technology Transfer
5 - The Effects of Knowledge Characteristics on Degree of Inter-Firm Technology Transfer
6 - Measuring the Impact of Technology Suppliers Characteristics on Degree of InterFirm Technology Transfer in International Joint Ventures
7 - The Effects of Technology Recipients Characteristics on Degree of Inter-Firm Technology Transfer
8 - The Effects of Relationship Characteristics on Degree of Inter-Firm Technology Transfer
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5
The Effects of Knowledge Characteristics on Degree of Inter-Firm Technology Transfer
CHAPTER OUTLINE
The current issue on inter-firm technology transfer (TT) in the developing countries is centered on the efficiency and effectiveness of the transfer process by the multinationals (MNCs). Thus, organizations in the developing countries are striving hard to collaborate, learn and internalize their foreign partner s technological knowledge by forming strategic alliances and international joint ventures (IJVs) as an efficient mean to increase global competitiveness, technological capabilities, and potential for local innovation. Knowledge as the critical element underlying technology has become one of the main factors that affects the success and failure of inter-firm technology transfer within IJVs which is frequently measured by the degree of technology transferred to the recipient partners.
INTRODUCTION Past studies have acknowledged the important role of MNCs as the main source of technology.
MNCs have been regarded as the most efficient vehicle for transferring technology and knowledge across borders through FDIs and IJVs (Tihanyi and Roath, 2002; Kagut and Zander, 1993). Previous literature has indicated that 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 potentials of innovation performance/capabilities (Guan, Mok, Yam and Pun, 2006; Kotabe, Dunlap-Hinkler, Parente and Mishra, 2007)), increasing technological capabilities (Kumar, Kumar and Persaud, 98
1999; Madanmohan, Kumar and Kumar, 2004), enhancing the 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).
Prior to formulating the appropriate TT strategies and policies, there is a need to critically examine one of the important technology transfer characteristics: knowledge characteristics that may have significant influence on the successful and effective implementation of TT particularly technologies transferred through IJVs. In the context of inter-firm TT, success is determined by substantial amount of technology transferred (level of TT) and its effect on the level of technological capacity of the local firms to absorb, assimilate, improve and further develop the newly acquired technology (Madanmohan et al., 2004). IJVs are viewed as the most efficient mode to transfer technology and knowledge which are 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 IJVs 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). Previous studies on inter-firm knowledge transfer have suggested that: 1) although studies on TT and KT in strategic alliance have contributed many interesting and valuable theories, they remain empirically under-researched (Mjoen and Tallman, 1997), 2) studies on inter-firm KT and knowledge acquisition by organizations require more hypothesis development and testing (Huber, 1991; Fiol, 1994), 3) the cross-border TT and KT from MNCs to local firms have not been extensively researched (Pak and Park, 2004), 6) studies on inter-firm knowledge acquisition in alliance have focused heavily on the supplier s, JV s or KT s perspective (Martin and Solomon, 2003; Simonin, 1999a, 2004; Lyles and Salk, 1996; Tsang et al., 2004), and 7) fewer studies adopt the local firms or recipient s perspective (Yin and Bao, 2006).
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KNOWLEDGE CHARACTERISTICS TECHNOLOGY TRANSFER
AND
DEGREE
OF
INTER-FIRM
From the literature review, a number of KCHAR that have been identified include 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) and availability (Minbaeva, 2007). Knowledge tacitness, specificity and complexity have contributed significantly to knowledge ambiguity in imitation (Reed and DeFillippi, 1990), and knowledge migration (Szulanski, 1996). Building 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), this study empirically examines the effects of the three critical elements of KCHAR: tacitness (TCT), complexity (COMPLX) and specificity (SPEC) on two distinct dimensions of degree of technology transfer (TTDEG): degrees of tacit (TCTDEG) and explicit (EXPDEG) knowledge based on the underlying KBV perspective.
TACITNESS AND DEGREE OF TECHNOLOGY TRANSFER

The knowledge 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 (TCT) is derived 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 context-specific knowledge, embedded in non-standardized and tailored process, and is difficult to acquire and exploit (Polanyi, 1967). Tacit knowledge derives from the accumulated experience, and is reflected in the expertise, skills and routines acquired by organizational members over time (Winter, 1987). Past studies have established that tacit knowledge, which includes insights, intuitions and 100
hunches, rule of thumb, gut feeling, personal and organizational skills (Nonaka, 1994), managerial and marketing expertise (Lane et al., 2001), is difficult to codify: where it can only be observed through its application and acquired through practice. 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 rather difficult or perhaps not even possible no matter how much efforts 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 and not codifiable in formulas or manuals and cannot be reverse-engineered easily (Zander and Kogut, 1995). Tacit knowledge which is hard to formalize, often sticky and not easily visible, is difficult to communicate, transfer and share between the alliance or JVs partners as it involves 1) intangible factors embedded in the personal beliefs, experiences, 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 the knowledge to a specified location in a form usable by a given party (von Hippel, 1994). H1: Tacitness is negatively related to degree of inter-firm technology transfer in IJVs.
COMPLEXITY AND DEGREE OF TECHNOLOGY TRANSFER

As the second critical element of knowledge characteristic, complexity (COMPLX) has been described from many aspects for example: 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 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 101
and impedes transferability (Reed and DeFillippi, 1990). It is argued that the higher the degree of COMPLX of the manufacturing technology, the more difficult for knowledge to be transferred or imitated (Kogut and Zander, 1993). H2: Complexity is negatively related to degree of inter-firm technology transfer in IJVs.
SPECIFICITY AND DEGREE OF TECHNOLOGY TRANSFER

On the other hand, specificity (SPEC) originally refers to transaction costs asset specificity as popularized by Williamson (1985). Asset SPEC which includes site, physical, dedicated and human assets refer to durable investments that are undertaken in support of particular transaction (Williamson, 1985). Building on Williamson (1985), Reed and DeFillippi (1990) defined 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 interdependent with the firm s 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 specifically designed for the production of goods and services for a specific customer, and human asset SPEC is 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 also 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 to the firm (Kogut and Zander, 1993). Firms create sustainable competitive advantage by developing firms assets and competencies that are firm-specific, produce complex social relationships i.e. firm-customer relationship, embedded in a firm s history and culture, generate organizational tacit knowledge and time consuming to develop (Lado and Wilson, 1994; Dierickx and Cool, 1989; Kogut and Zander, 1993). 102
H3: Specificity as one of the critical elements of knowledge characteristic is negatively related to degree of inter-firm technology transfer IJVs.
METHODOLOGY AND SAMPLE

Based on the number of IJV companies registered with the Registrar of Companies (ROC) as at 1st January 2008, the number of IJVs currently operating in Malaysia is 1038. Out of this, 850 IJVs are considered as active IJVs and 103 IJVs are either dormant or have ceased operation. Since the focus of this study is on inter-firm TT from foreign MNCs to local companies, 85 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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. After one month from the posting date the response was not encouraging. By mid July 2008 there were only 70 responses 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, 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; Sakaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001; Norziha, 2004). From 145 responses only 128 questionnaires were usable and the balance were returned blank, returned incomplete, or replied but unable to participate in the study.
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INSTRUMENTS AND MEASUREMENT

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 TT. 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 was 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).
DEGREE OF TECHNOLOGY TRANSFER

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 in terms of two dimensions: 1) tacit knowledge (TCTDEG) in terms of new product/service development, managerial systems and practice, process designs and new marketing expertise, and 2) explicit knowledge (EXPDEG) in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how. The respondents were asked to evaluate TTDEG from MNCs to local firms in terms of tacit and explicit dimensions of technological knowledge. The Cronbach Alphas for TCTK and EXPK were 0.96 and 0.97 respectively. The results of Cronbach Alpha were quite similar to that of Hau and Evangelista (2007) and Yin and Bao (2006).
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TACITNESS
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 partner s manual describing the technology can be written, and 2) large parts of the foreign JV partner s technology are embodied in standard software. Two (2) items are adopted from Simonin (1999a, 1999b, 2004) which include statements whether 1) the foreign JV partner s technology is easily codified, and 2) the foreign JV partner s technology is more explicit than tacit. One (1) item is adopted from Pak and Park (2004) inquiring whether the partner s 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 firm s personnel can easily learn the technology by communicating with the foreign JV partner s skilled personnel, 2) the local JV local firm s 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. The Cronbach Alpha for TCT was slightly higher (0.86) than Simonin s (1999a) Cronbach Alpha (0.72).
COMPLEXITY
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 partner s technology is the product of many interdependent techniques, routines, individuals, resources, and processes. The Cronbach Alpha for COMPLX was also higher (0.84) as compared to Pak and Park s (2004) Cronbach Alpha (0.74).
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SPECIFICITY
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. For SPEC the Cronbach Alpha was slightly lower (0.72) as compared to Pak and Park s (2004) Cronbach Alpha (0.87).
RESULTS
Table 1 shows the descriptive data of all the variables (Mean values, Standard Deviations, Correlations) and correlation matrix. Table 2 presents the results of regression analysis. Table 1: Descriptive Statistics and Correlation Matrix --------------------------------------------------------------------------------------------------------------------Variable Mean SD 1 2 3 4 -------------------------------------------------------------------------------------------------------------------------------------------TCT 5.36 1.58 1.000 COMPLX 6.24 1.34 -0.084 1.000 SPEC 3.55 1.07 0.068 0.400** 1.000 TCTDEG 5.91 1.45 -0.194* -0.207* -0.012 1.000 TCT 5.93 1.35 1.000 COMPLX 5.89 1.31 -0.084 1.000 SPEC 4.73 1.30 0.068 0.400** 1.000 EXPDEG 6.47 1.34 -0.225* -0.236* -0.118 1.000 -------------------------------------------------------------------------------------------------------------------------------------------n = 128, * p < 0.05, ** p < 0.01
From Table 1 above, there are clearly some associations between independent variables. For all the variables, it was found that there was no multicollinearity problem; where the T values were ranged between 0.827 - 0.881 and the VIF values were between 1.020 - 1.209. Tacitness (TCT) and complexity (COMPLX) were significantly correlated with degree of tacit knowledge (TCTDEG) (p < 0.05). Although specificity (SPEC) showed a negative correlation with TCTDEG, however, it was not statistically significant. The correlation results also indicated that both TCT and COMPLX also had significant negative correlations with EXPDEG (p < 0.05 and 106
p < 0.01 respectively). Again, although specificity (SPEC) showed a negative direction as predicted, however, the statistical result was insignificance. Using the multiple regression analysis, the effects of TCT, COMPLX, and SPEC on two dimensions of degree of technology transfer (TCTDEG and EXPDEG) were estimated. As shown in Table 2 below, TCT and COMPLX as two critical components of knowledge characteristics had significant negative effect on both degrees of tacit (p < 0.05, Beta value = 0.143 and p < p -0.355 respectively ) and explicit (p < 0.05, Beta value = -0.155 and p < 0.05, Beta value = -0.333 respectively) knowledge in inter-firm TT. The regression results indicated that both TCT and COMPLX had considerable and significant effects on both dimensions of technology transfer. This is also evident by the results of the adjusted R-squared and F statistics. As the critical elements of knowledge characteristics, both tacitness and complexity had negative significant effect on both degrees of tacit and explicit knowledge (p < 0.05). Therefore, H1 and H2 are supported thus indicating that the higher level of knowledge tacitness and complexity of the foreign partners technology contributes to the lesser degree of tacit and explicit knowledge that are being transferred to the recipients/local partners in IJVs. The results further indicate that the effects of COMPLX on both TCTDEG and EXPDEG in Model 1 and 2 were stronger than the effects on TCT on both TCTDEG and EXPDEG suggesting that as compared to knowledge tacitness the combination of large number of technologies, organization routines and interdependent skills and assets have more influence in determining a lower degrees of both tacit and explicit knowledge in IJVs. Interestingly, although specificity has been strongly highlighted by previous literature of its significance, it has failed to provide any significant effects on both degree of tacit and explicit knowledge (p > 0.05). In this study, specificity as one of the critical elements of knowledge characteristic has not really effected lower degrees of tacit and explicit knowledge in inter-firm TT in IJVs though the direction was correctly predicted. Thus, H3 is not supported.
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Table 2: Results of Categorical Regression Analysis --------------------------------------------------------------------------------------------------------------------Degree of Tacit Knowledge Degree of Explicit Knowledge (Model 1) (Model 2) -------------------------------------------------------------------------------------------------------------------------------------------(Constant) 36.359*** 41.583*** Variable Tacitness Complexity Specificity R-squared Adjusted R-squared -0.143* -0.355* 0.165 0.098 0.064 -0.155* -0.333* 0.002 0.116 0.082
F 2.840* 3.407* ------------------------------------------------------------------------------------------------------------------------------------------- Cell entries are standardised coefficient estimates (n = 128), * p < 0.05, ** p < 0.01, *** p < 0.001
DISCUSSION AND CONCLUSIONS

Based on the underlying knowledge-based view perspective, this study attempts to provide empirical evidence as to the effects of three critical knowledge characteristics (tacitness, complexity, and specificity) on degrees of tacit and explicit knowledge in the inter-firm TT through IJVs. This paper has specifically addressed the effects of knowledge characteristics on generic knowledge attributes (tacitness and explicitness) as highlighted by Pak and Park (2004, pg. 429). Besides examining the relationships between these key knowledge characteristics and degree of technology transfer (degrees of tacit and explicit knowledge), this study also had extended the previous findings on knowledge specific attributes (Kogut and Zander, 1993; Simonin, 1999a) which suggest that tacitness or ambiguity of knowledge is rather difficult to transfer between strategic alliance partners of joint ventures. The consistent results of the significant effects of tacitness and complexity on both degrees of tacit and explicit knowledge are in line Pak and Park s (2004) findings; where they found that the effects of specificity and desirability on manufacturing-processing (explicit knowledge) were more dominant than new product development (tacit knowledge). The results in the present study were quite interesting given that although explicit knowledge is mostly codified in the form of blueprints, instructions, formulas or standard manuals by the supplier; which allows for more easy transfer of technology, however, explicit knowledge still implicitly consists of an intrinsic tacit element/value (firm108
specific) in which to accelerate the transfer of explicit knowledge would involve various organizational and group levels of involvement (Inkpen, 2000). The results further suggest that explicit knowledge transfer of a highly tacit and complex technology/knowledge requires not only learning by doing by the recipient but also active involvement of the teacher/supplier (Lane and Lubatkin, 1998). Overall, the findings also confirm and support previous empirical results of the effect of KCHAR on knowledge transfer; where knowledge-specific attributes 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 present study also suggest that tacitness and complexity had negatively affected the degree of technologies (TCTDEG and EXPDEG) that are intended to be transferred to the recipient because the technology supplier s technologies and knowledge 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 DeFillippi, 1990; Nonaka, 1994). Tacitness and complexity of technology involved 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). On the insignificance of specificity, the results seemed to concur with Simonin s (1999a, pg. 614) suggestion that the construct s (SPEC) lack of effect needs to be further investigated for other types of competencies thus should not only be restricted to technological knowledge.
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6
Measuring the Impact of Technology Suppliers Characteristics on Degree of Inter-Firm Technology Transfer in International Joint Ventures
CHAPTER OUTLINE
While technology transfers through JVs, have been acknowledged by many studies as the most efficient formal mechanism in internalizing the partner s technologies, knowledge and skills, the transfer process has frequently involved various facilitators, actors and complex relationship between partners which cause direct impact on degree of technology transfer. Based on the underlying knowledge-based view (KBV) and organizational learning (OL) perspectives, the main objective of this work is to empirically examine the effects of two critical elements of technology supplier characteristics: partner protectiveness and transfer capacity on two dimensions of degree of technology transfer: degree of tacit and explicit knowledge.
INTRODUCTION The
inter-firm technology transfers (TT) in international joint ventures (IJVs) have often
involved tradeoffs between the technology suppliers willingness to transfer a considerable amount of their technologies; which include both tacit and explicit knowledge, degree of protection of the proprietary technology, knowledge and competencies as the source of the supplier s competitive advantage (Inkpen, 2000), degree of transparency (Hamel, 1991), and motivation to transfer (Szulanski, 1996). 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). This paradox exists because the inter-firm 113
technology transfer in strategic alliances and IJVs is indeed an organizational learning process (Huber, 1991). Technology transfers through IJVs, although have been acknowledged in many studies as the most efficient mechanism in internalizing the partner s technology, knowledge and skill, have also frequently involved various facilitators, actors and complicated relationship between partners (Szulanski, 1996); which eventually cause direct impact on the degree or amount of technology transferred in JVs . Studies from the KBV perspective have acknowledged that MNCs tend to become more protective of their advance technology, knowledge and competencies in products, processes and management because these strategic valuable resources and competencies are their main sources of sustainable competitive advantage (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel). The OL perspective studies have argued that technology and knowledge are protected by the suppliers when the recipients are opportunistic in the collaborative relationship (Inkpen, 1998a; Inkpen and Dinur, 1998; Child and Faulkner, 1998). A number of studies on inter-firm knowledge transfer (KT) have suggested that: 1) many studies have focused more on conceptual work which involves either small-sample or in-depth studies of few organizations; thus studies on how strategic alliances work and alliance partners learn are empirically under researched (Simonin, 1999a), 2) 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) the cross-border TT and KT from MNCs to local firms have not been extensively researched (Pak and Park, 2004), 4) studies on inter-firm knowledge acquisition in alliance have heavily focused on the supplier s, JV s or KT s perspective (Martin and Solomon, 2003; Simonin, 1999a, 2004; Lyles and Salk, 1996; Tsang et al., 2004), 5) fewer studies have adopted the local firms (recipient) perspective (Yin and Bao, 2006). Therefore, based on the above limitations, this study responds to the literature gaps in by empirically examining the effects of two critical elements of technology supplier characteristics: partner protectiveness (PPROTEC) and transfer capacity (TRANSCAP) on two dimension of degree of technology transfer: degree of tacit (TCTDEG) and explicit (EXPDEG) knowledge from the local (recipient) firms perspective using the underlying KBV and OL perspectives.
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TECHNOLOGY SUPPLIERS CHARACTERISTICS

A review of literature shows that technology supplier characteristics (TSCHAR) have been studied from many dimensions of suppliers behaviors. A stream of studies has identified numerous TSCHAR that have significant influence on KT 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), transferor s 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).
PARTNER PROTECTIVENESS AND DEGREE OF TECHNOLOGY TRANSFER

The ability of a firm to acquire knowledge in the cooperative arrangement such as JVs 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 suppliers to cooperate or engage in knowledge sharing i.e. by reducing the level of protectiveness (Simonin, 1999a; Steensma and Lyles, 2000). Partner protectiveness (PPROTEC) refers to as the extent of protections/hurdles, intentionally or unintentionally, imposed by the foreign partner on the local partner in an IJV which restrict the accessibility to proprietary technology/knowledge (Hau and Evangelista, 2007). PPROTEC is closely related to the 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 transfer within multinational corporation (MNCs), openness is referred to as the degree to which relationship between business unit managers and corporate supervisors is open and informal which promotes spontaneous and open exchange of information and ideas (Gupta, 1987). Many theoretical studies have stressed that partners in the collaborative relationship such as JVs are expected to mutually exchange their valuable proprietary assets, resources, information, knowledge and technologies between them to achieve mutual benefits (Inkpen, 2000; Khanna et 115
al., 1998; Child and Faulkner, 1998). However, these proprietary competencies are the critical 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 duty bound to protect their hard-won success and competencies from the opportunist recipient partners (Parkhe, 1993; Steensma and Lyles, 2000; Szulanski, 1996). Unless they receive sufficient incentive to mitigate the cost which is typically associated with the transfer, the foreign parent firms may intentionally restrict knowledge flow to the JV. This is because collaborations through JVs are commonly viewed as a low cost approach for local firms to gain competencies in a short period (Hamel et al., 1989; Simonin, 1999a, 2004; Steensma and Lyles, 2000; Dyer and Singh, 1998). Due to the risk of knowledge spillover (leakage), partners in the strategic alliance and IJVs, tend to be more protective of their valuable knowledge resources as their competitiveness (survival) is very much depending on these 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 them to gain competitive advantage and use it against the proprietor or supplier firms (Cohen and Lavinthal, 1990; Hamel et al., 1989; Simonin, 1999a, 2004; Steensma and Lyles, 2000). This is also because knowledge spillover to an alliance partner tends to shift the balance of bargaining power between JV partners thus leading to the initiation of changes in the partner relationship (Inkpen, 2000). Because of asymmetries of knowledge between alliance or JV partners, PPROTEC and knowledge accessibility will be correspondingly asymmetrical; where partners in an alliance can be less transparent or open than the other partner (Hamel, 1991). However, even though openness/transparency of the alliance s 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). Therefore, in the context of knowledge sharing within alliance; where a high-competitive overlap between partners exists, the partner s knowledge protectiveness level is expected to be high (Inkpen, 1998a; Inkpen, 2000; Yan and Luo, 2001). This causes foreign partners to have low motivation to exchange, share and transfer knowledge (Szulanski, 1996; Hua and Evangelista, 2007). Although alliances and JVs provide a strategic avenue to internalize the other partner s technologies and competencies, they are also likely to be surrounded by greater levels of protectiveness and mistrust which may discourage the transfer of tacit knowledge; especially 116
when learning in alliances demand active teaching by the technology supplier (Simonin, 2004, 1999a; Dhanaraj et al., 2004; Marcotte and Niosi, 2000). As discussed above, studies on PPROTEC are mostly theoretical or case study. Only few studies have empirically examined the impact of PPROTEC on technology and knowledge transfer. The empirical results are found to have mixed results where 1) in the context of marketing know-how transfer in strategic alliance, partner PPROTEC had an insignificant relationship with knowledge ambiguity (Simonin, 1999b), 2) PPROTEC indirectly, through the mediation of knowledge ambiguity, was insignificantly related to inter-firm KT in strategic alliance (Simonin, 1999a), 3) PPROTEC had a significant negative effect on inter-firm KT in strategic alliance (Simonin, 2004), and 4) a partner s knowledge protectiveness has a significant negative influence on explicit and tacit marketing knowledge acquisition (Hua and Evangelista, 2007). H1: Partner protectiveness is negatively related to degree of tacit and explicit knowledge in inter-firm technology transfer.
TRANSFER CAPACITY AND DEGREE OF TECHNOLOGY TRANSFER

As 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 technology 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 firms ability to transfer knowledge to their subsidiaries efficiently and effectively may serve several objectives such as 1) to facilitate their expansion in foreign countries, 2) to maintain the firms competitiveness, and 3) to safeguard their competencies and expertise 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 justifies their commitments in the collaborative relationship; where all partners are expected 117
to mutually contribute their knowledge, technologies, skills and competencies to the JVs to gain mutual benefits (Inkpen, 1998a, Inkpen 2000; Khanna et al., 1998; Child and Faulkner, 1998). Past studies have described TRANSCAP from many dimensions for example: 1) the supplier firms ability to articulate 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 the knowledge sender in terms of the source s ability and willingness to share knowledge (Minbaeva and Minhailova, 2004), 3) the sender s 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 source s motivational disposition (Gupta and Govindarajan, 2000). Szulanski (1996) identifies source/supplier not perceived as reliable and lack of motivation as the source s characteristics that contribute to knowledge stickiness. When the source is perceived as unreliable, it is not seen as trustworthy and knowledgeable. In addition, due to the source s 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 for fear of losing ownership, privilege or superiority (Szulanski, 1996). 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 (source) is capable in 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 the knowledge in a form that can be assimilated by 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 literature have implicitly associated the technology supplier s TRANSCAP with 1) the parent s firm assistance (Lyles et al., 1999; Hau and Evangalista, 2007), 2) the foreign parent s active involvement (Lyles and Salk, 1996; Cumming and Teng, 2003), and 3) the foreign parent s 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 118
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. In the context of strategic alliance and JV literature, there are no studies which have directly examined the relationship between the supplier s TRANSCAP and TTDEG. Nevertheless, as TRANSCAP has been closely associated with the foreign firm s 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 parent s commitment has a significant positive effect on knowledge acquisition (Tsang et al., 2004). H2: Transfer capacity is positively related to degree of tacit and explicit knowledge in inter-firm technology transfer.

The sample frame was taken from the IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs operating in Malaysia was 1038. Out of this, 850 IJVs 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 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter. After one month from the posting date the response was found not encouraging. By mid July 2008 there were only 70 responses received from the respondents. 119
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, 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; Sakaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001; Norziha, 2004). From 145 responses only 128 questionnaires were usable and 17 questionnaires were returned blank, returned incomplete, or replied but unable to participate in the study.
INSTRUMENT AND MEASUREMENT

The main research instrument in this study is the questionnaire. Building on the previous KT and TT studies, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm TT. 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 was 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).
DEPENDENT VARIABLE - DEGREE OF TECHNOLOGY TRANSFER

operationalizes TTDEG as the transfer of technological knowledge in terms of two dimensions: 1) tacit knowledge (TCTDEG) in terms of new product/service development, managerial systems 120
and practice, process designs and new marketing expertise, and 2) explicit knowledge (EXPDEG) in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how. The respondents were asked to evaluate TTDEG from MNCs to local firms in terms of tacit and explicit dimensions of technological knowledge. The Cronbach Alphas for TCTK and EXPK were 0.96 and 0.97 respectively. The results of Cronbach Alpha were quite similar to that of Hau and Evangelista (2007) and Yin and Bao (2006).
INDEPENDENT VARIABLES PARTNER PROTECTIVENESS

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. The Cronbach Alpha for PPROTEC was slightly higher (0.84) than Simonin s (1999a) Cronbach Alpha (0.77).
TRANSFER CAPACITY
To operationalize the ability of foreign JV s 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 121
local firm s personnel (Lyles et al., 1999), 3) the training programs provided by the foreign JV partner have been very helpful to the local firm s personnel, and 4) there have been many foreign JV partner personnel working in the JV firm (Hau and Evangelista, 2007). The Cronbach Alpha for TRANSCAP was higher (0.92) than Minbaeva s (2007) Cronbach Alpha (0.66).
RESULTS
Table 1 shows the descriptive data of all the variables (Mean values, Standard Deviations, Correlations). The results of regression analysis are presented in Table 2 below. Table 1: Descriptive Statistics and Correlation Matrix.
-------------------------------------------------------------------------------------------------------------------------------------------Variable Mean SD 1 2 3 -------------------------------------------------------------------------------------------------------------------------------------------PPROTEC 5.46 1.94 1.000 TRANSCAP 5.55 1.77 -0.407** 1.000 TCTDEG 4.49 1.49 -0.418** 0.686** 1.000 PPROTEC 6.10 1.90 1.000 TRANSCAP 5.55 1.77 -0.407** 1.000 EXPDEG 4.49 1.77 -0.314** 0.791** 1.000 -------------------------------------------------------------------------------------------------------------------------------------------n = 128, * p < 0.05, ** p < 0.01
From Table 1 above, there are clearly some associations between independent variables. For all the variables, it was found that there was no multicollinearity problem; where the T values were ranged between 0.801 - 0.834 and the VIF values were between 1.108 - 1.199. Both partner protectiveness (PPROTEC) and transfer capacity (TRANSCAP) were strongly correlated with degree of tacit knowledge (TCTDEG) (p < 0.01) and had negative and positive signs respectively; which are consistent with the theoretical arguments in the literature. The
correlation results also indicated that both PPROTEC and TRANSCAP also had strong correlations with EXPDEG (p < 0.01). In comparison, the correlation between PPROTEC and TCTDEG was slightly higher than correlation between PPROTEC and EXPDEG thus suggesting that tacit knowledge is more likely to be protected by the transferring partner in IJVs as compared to explicit knowledge. On the other hand, the correlation results for TRANCAP
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suggested that due to the suppliers ability to transfer, it is likely more explicit knowledge will be transferred than tacit knowledge in IJVs. Using the multiple regression analysis, the effects of PPROTEC and TRANSCAP on two dimensions of degree of technology transfer (TCTDEG and EXPDEG) were estimated. As shown in Table 2 below, transfer capacity as a critical component of technology recipient characteristics had significant effect on both degrees of tacit and explicit knowledge in inter-firm TT. The regression results indicated that transfer capacity had a strong significant effect on both TCTDEG (p < 0.001, Beta value = 618) and EXPDEG (p < 0.001, Beta value = 795). This was also evident by the results of the adjusted R-squared in Model 1 and Model 2 (0.493 and 0.626 respectively), F statistics (38.480 and 66.099 respectively) and the highly significant corresponding p values. As the critical elements of technology recipient characteristics, TRANSCAP had a highly significant effect on both degrees of tacit and explicit knowledge (p < 0.001). Therefore, H2 is supported thus indicating that the higher level of transfer capacity, which is directly reflected on the technology supplier s ability and motivation to transfer, contributes to a higher degree of tacit and explicit that are transferred to the recipient partners in IJVs. Table 2: Results of group Regression Analysis
-------------------------------------------------------------------------------------------------------------------------------------------Variable Degree of Tacit Knowledge Degree of Explicit Knowledge (Model 1) (Model 2) -------------------------------------------------------------------------------------------------------------------------------------------(Constant) 11.108*** 5.106*** Partner Protectiveness Transfer Capacity R-squared Adjusted R-squared -0.167 0.618*** 0.493 0.481 -0.010 0.795*** 0.626 0.616
F 38.480*** 66.099*** ------------------------------------------------------------------------------------------------------------------------------------------- Cell entries are standardised coefficient estimates (n = 128) p < 0.10, * p < 0.05, ** p < 0.01, *** p < 0.001
Interestingly, although partner protectiveness has a strong theoretical foundation as emphasized by previous literature, the regression results show that it failed to provide strong effects on both
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degrees of tacit and explicit knowledge (p > 0.05) thus contrary to this study prediction. In this study, however, as compared to Model 2, partner protectiveness in Model 1, as one of the critical elements of technology supplier characteristic, did contribute a low significant negative effect on TCTDEG (p < 0.10) indicating a significantly low influence of PROTEC in determining degree of tacit knowledge transfer to the recipient partner. In Model 2, partner protectiveness did not contribute significantly to a lower degree of explicit knowledge in inter-firm TT though the direction was correctly hypothesized. Thus, based on the two regression results, H1 is partially supported. Although the effect of partner protectiveness on degree of tacit knowledge is
relatively low in significance, the results still suggest that the presence of partner protectiveness, which is closely associated with the technology suppliers degree of transparency (openness) and their willingness to transfer, has more significant influence on degree of tacit knowledge than explicit knowledge in IJVs. The technology suppliers tend to protect their tacit knowledge more as compared to explicit knowledge because tacit knowledge embodied in products, processes and management competencies (skills) are regarded as strategic valuable resources which could sustain their competitive advantage (Kogut and Zander 1993; Barney, 1991).
DISCUSSION AND CONCLUSION

Based on the underlying integrated KBV and OL perspectives, this study has bridged the gaps in the literature by providing empirical evidence on the effects of two critical elements of technology supplier characteristics: partner protectiveness and transfer capacity on two distinct dimensions of degree of inter-firm technology transfer: degree of tacit (TCTDEG) and explicit (EXPDEG) knowledge in IJVs using the Malaysian sample. From the regression results, the strong significant effects of transfer capacity (TRANSCAP) on both degrees of tacit and explicit knowledge (p < 0.001) confirm the previous theory on the importance of TRANSCAP in facilitating technology transfer within IJVs (Inkpen, 2000). This suggests that the greater the ability to transfer by the supplier the higher the degree of tacit and explicit knowledge will be transferred to local recipient firms. Consistent with recent development in knowledge transfer literature (Szulanski and Cappetta, 2003; Minbaeva, 2007), the results confirm the theoretical proposition which suggested that knowledge provider attributes has become one of the most important determinant of knowledge transfer. Although the literature on the effect of 124
TRANSCAP on TTDEG is rather limited, the results of this study are in line with Minbaeva (2007), Szulanski (1996), and Gupta and Govindarajan (2000). The results further suggest that TRANSCAP of the supplier in IJVs; which is reflected on the parent s 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 local JV partner. To increase the level of TT in IJVs the technology supplier should become a proficient transferor with 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 recipient s degree of receptivity, assimilation and use of technology (Martin and Solomon, 2003). The population sample also indirectly inferred that TRANSCAP is one of the major concerns that require serious attention.
On the low significant effect of partner protectiveness (PPROTEC) on degree of tacit (p < 0.10) and its insignificant effect on degree of explicit knowledge (p > 0.05), this study follows the argument made by Simonin (1999a, pg.615) 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 . Thus, it is impossible to assess the relationship between lack of knowledge and failure should data on failed IJVs was not available (Lyles and Salk, 1996). 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 consistent with Simonin s (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 high possibility that the true effect of PROTEC in the study s 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 not in line with the recent findings by Hau and Evangelista (2007) where PPROTEC had significantly affected the acquisition of tacit and explicit marketing knowledge in Vietnamese IJVs.
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7
The Effects of Technology Recipients Characteristics on Degree of Inter-Firm Technology Transfer
CHAPTER OUTLINE
As an efficient mean to increase global competitiveness, technological capabilities, and potential for local innovation, organizations in the developing countries are working hard to collaborate, learn and internalize their foreign partner s technological knowledge by forming strategic alliances and international joint ventures (IJVs). Technology recipient characteristics, as one of the important actors/facilitators of inter-firm technology transfer, have increasingly become crucial factor in determining the success or failure of inter-firm technology transfer within IJVs. Since the current issue on inter-firm technology transfer (TT) in the developing countries is centered on the efficiency and effectiveness of the transfer process by the multinationals (MNCs) therefore the success is often associated with degree of technology transferred to local partners.
INTRODUCTION Studies from knowledge-based view (KBV) perspective have acknowledged that MNCs tend to
be more protective of their advance technology, knowledge and competencies embodied in products, processes and management because these strategic valuable resources and competencies are their main sources of competitive advantage (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel). On the other hand, organizational learning (OL) perspective studies have suggested that technology and knowledge are more likely to be protected by the supplier when the recipients are opportunistic in the collaborative relationship (Inkpen, 1998a; Inkpen and Dinur, 1998; Child and Faulkner, 1998). Thus, in the context of inter-firm technology transfer (TT) through international joint ventures (IJVs), the remaining question is on the extent of TT by foreign MNCs; especially when transferring their 129
advance technology to local recipient partner (Narayanan and Lai, 2000). While realizing that technologies, knowledge, and competencies are the supplier s main source of competitive advantage, the current TT issue in IJVs revolves around the extent of degree of technologies that are transferred by the suppliers to recipient partners in terms of tacit knowledge (new product/service development, managerial systems and practice, process designs and new marketing expertise), and explicit knowledge (manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how) (Madanmohan et al., 2004). This is because from the recipient s perspective, TT success is not merely possessing the ability to operate, maintain or repair the machineries at the production level (transmission) but it also includes the ability to learn, acquire, absorb and apply new external technologies and knowledge that are organizationally embedded in product materials, physical assets, processes and production, and management capabilities (absorption) (Davenport and Prusak, 1998, 2000). Previous studies on intra-firm knowledge transfer have acknowledged the significant influence of technology actors and facilitators/barriers such as the characteristics of knowledge transferred, source, recipient and contextual/relational in the knowledge transfer process (Szulanski, 1996, 2000, 2003; Gupta and Govindarajan, 2000; Minbaeva, 2007). Thus, the impending issue now is on the extent of effects of TT characteristics (TTCHARS) in determining the degree or level of technology transfer (TTDEG). Specifically to what extents do TT characteristics influenced TTDEG? Based on the underlying KBV and OL perspectives, this paper attempts to address the above issue in particular the effects of two critical elements of technology recipient characteristics (TRCHAR): absorptive capacity (ACAP) and recipient collaborativeness (RCOL) on degree of inter-firm technology transfer (TTDEG): degree of tacit (TCTDEG) and explicit knowledge (EXPDEG) in IJVs.
TECHNOLOGY RECIPIENTS CHARACTERISTICS

The technology recipient characteristics (TRCHAR) have been affirmed by many studies as one of the important determinants that affect knowledge transfer (KT). Among the recipient characteristic factors that have been identified by literature to influence TT and knowledge KT 130
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).
ABSORPTIVE CAPACITY AND DEGREE OF TECHNOLOGY TRANSFER

As TT involves the process of transmission and absorption of knowledge (Davenport and Prusak, 1998, 2000), the recipient firm s ability to absorb the knowledge transferred largely depends on the degree of their absorptive capacity (ACAP). Past studies have shown that a low degree of technology recipient s ACAP impedes both intra and inter-firm KT (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). 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 firm s 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 firm s 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 firm s 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 Lavinthal, 1990). Prior related knowledge, which includes basic/minimal skills, a shared language, positive attitude towards 131
learning, relevant prior experience and up-to-date information on knowledge domain, is critical for an organization to assimilate and exploit new external knowledge (Cohen and Lavinthal, 1990; Szulanski, 1996, 2003; Minbaeva, 2007). By possessing sufficient prior related knowledge, which is closely associated with new knowledge, the organization will have adequate ability to absorb new technological and innovative competencies/capabilities (Cohen and Lavinthal, 1990). A stream of strategic alliance literatures has dealt with the concept of ACAP (Hamel, 1991; Simonin, 1999a, 1999b, Inkpen, 2000; Szulanski, 1996). Hamel (1991) applies the term receptivity to have similar notion to ACAP in explaining the organization s 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 expended 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). 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 also 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 management s 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 other critical element of ACAP is intensity of effort. This concept is proposed 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 that include 1) knowledge acquisition, 2) knowledge assimilation, 3) knowledge transformation, and 4) knowledge exploitation. Knowledge acquisition and assimilation capabilities form potential 132
capacity , whereas knowledge transformation and knowledge exploitation capabilities form realized capacity (Zahra and George, 2002). A number of empirical studies on inter-firm KT have offered strong evidence on the relationship between ACAP and KT where: 1) 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 depend on their prior experience in related technological fields (Mowery et al., 1996), 3) prior experience has a negative impact on ambiguity which impedes KT; when the greater/higher the levels of prior experience of knowledge seeker, the less ambiguous the knowledge that are to be transferred (Simonin, 1999a), 4) a lack of ACAP is one of the barriers to KT (Szulanski, 1996), 5) a higher ACAP in 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 parent s receptivity is positively related to the amount of knowledge acquired from foreign partner (Tsang et al., 2004). H1: Absorptive capacity is positively related to a higher degree of inter-firm technology transfer within IJVs.
RECIPIENT COLLABORATIVENESS TRANSFER
AND
DEGREE
OF
TECHNOLOGY
Recipient collaborativenss (RCOL) is mostly involved in inter-firm TT between partners in collaborative relationship such as strategic alliances and JVs. 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, create new knowledge, and transfer knowledge between them (Inkpen, 2000). Nonetheless, strategic alliances face a tradeoff between the opportunities for generating and sharing knowledge and the propensity that the partner may tend to become opportunistic (Child and Faulkner, 1998). Building on the concept of inter-partner learning developed by Hamel (1991), RCOL is defined as the recipient firms willingness to establish a mutually beneficial 133
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 stream of studies on inter-firm KT has established that a key determinant of interorganizational learning is partner s intent (collaborative vs. competitive intent) (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 partner s skill and competencies (Hamel, 1991), 2) the desire and will of the partner firm to acquire the other firm s 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). 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). Thus, if learning is considered as a competitive acquisition of knowledge rather than a collaborative 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). A review of 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) found empirical evidence 134
that partner s intent was a key determinant of inter-organizational learning in alliance. 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 showed that among the recipient factors, RCOL was the most significant factor that had a positive impact on the tacit knowledge acquisition. Since learning in an alliance depends on the partner s intent, Simonin (2004) found learning intent was consistently emerged as the significant determinant of KT. H2: Recipient collaborativeness is positively related to a higher degree of inter- firm technology transfer within IJVs.

The sample frame was taken from the number of IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs currently operating in Malaysia is 1038. Out of this, 850 IJVs are considered as active IJVs and 103 IJVs are either dormant or have ceased operation. Since the focus of this study is on inter-firm TT from foreign MNCs to local companies, 85 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter. After one month from the posting date the response was not encouraging. By mid July 2008 there were only 70 responses 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, 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; Sakaran, 2003). In the Malaysian context, however, a 135
response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001; Norziha, 2004). From 145 responses only 128 questionnaires were usable and the balance were returned blank, returned incomplete, or replied but unable to participate in the study. The main research instrument in this study is the questionnaire. Building on the previous studies on KT and TT, the questionnaire adopts a multiitem scales which have been modified accordingly to suit the context of the study: inter-firm TT. 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 was 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).

operationalizes TTDEG as the transfer of technological knowledge in terms of two dimensions: 1) tacit knowledge (TCTDEG) in terms of new product/service development, managerial systems and practice, process designs and new marketing expertise, and 2) explicit knowledge (EXPDEG) in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how. The respondents were asked to evaluate TTDEG from MNCs to local firms in terms of tacit and explicit dimensions of technological knowledge. The Cronbach Alphas for TCTDEG and EXPDEG were 0.96 and 0.97 respectively. The results of Cronbach Alpha were quite similar to that of Hau and Evangelista (2007) and Yin and Bao (2006).
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ABSORPTIVE CAPACITY
Building on Lane et al. (2001), this study captures ACAP s 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 Lavinthal (1990) and Lane et al. (2001), this study also includes one (1) item to assess the local firm s ability to understand, assimilate and apply new technology transferred by the foreign parent firm. The Cronbach Alpha for ACAP was higher (0.94) than Simonin s (2004) Cronbach Alpha (0.81).
RECIPIENT COLLABORATIVENESS
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 partner s learning objective, 2) the local partner s desire, determination and will to learn from foreign partner, 3) the technology-recipient s willingness to allow foreign partner to inspect and monitor the use of knowledge acquired from JV, 4) the local partner s commitment not to compete directly with the foreign partner in the future, and 5) the local partner s 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). The Cronbach Alpha for RCOL was higher (0.92) than Yin and Bao s (2006) Cronbach Alpha (0.71).
RESULTS
Table 1 shows the descriptive data of all the variables (Mean values, Standard Deviations, Correlations) and correlation matrix. Table 2 presents the results of regression analysis.
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Table 1: Descriptive Statistics and Correlation Matrix

-------------------------------------------------------------------------------------------------------------------------------------------Variable Mean SD 1 2 3 -------------------------------------------------------------------------------------------------------------------------------------------ACAP 6.47 1.34 1.000 RCOL 5.75 1.67 0.541** 1.000 TCTDEG 6.56 1.66 0.329** 0.460** 1.000 ACAP 5.86 1.07 1.000 RCOL 5.84 1.70 0.541** 1.000 EXPDEG 6.60 1.64 0.313** 0.517** 1.000 -------------------------------------------------------------------------------------------------------------------------------------------n = 128, * p < 0.05, ** p < 0.01
From Table 1 above, there are clearly some associations between independent variables. For all the variables, it was found that there was no multicollinearity problem; where the T values were ranged between 0.707 - 0.811 and the VIF values were between 1.238 - 1.414. Both absorptive capacity (ACAP) and recipient collaborativeness (RCOL) were significantly correlated with degree of tacit knowledge (TCTDEG) (p < 0.01). The correlation results also indicated that both ACAP and RCOL also had strong significant correlations with EXPDEG (p < 0.01). Using the multiple regression analysis, the effects of ACAP and RCOL on two dimensions of degree of technology transfer (TCTDEG and EXPDEG) were estimated. As shown in Table 2 below, recipient collaborativeness as a critical component of technology recipient characteristics had significant effect on both degrees of tacit (p < 0.001, Beta value = 0.399) and explicit knowledge (p < 0.001, Beta value = 0.491) in inter-firm TT. The regression results indicated that recipient collaborativeness had a strong significant effect on both dimensions of technology transfer. This is also evident by the results of the adjusted R-squared (0.221 and 0.269) and F statistics (17.690 and 22.954). It is also noted that in terms of its significance strength, the effect of RCOL on EXPDEG was stronger than its effect on TCTDEG. Therefore, H2 is supported thus indicating that the higher level of recipient collaborativeness, which is directly reflected on the recipient collaborative learning intent, contributes to a higher degree of tacit and explicit being transferred by the technology supplier partners in IJVs.
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Table 2: Results of group Regression Analysis

--------------------------------------------------------------------------------------------------------------------Variable Degree of Tacit Knowledge Degree of Explicit Knowledge (Model 1) (Model 2) -------------------------------------------------------------------------------------------------------------------------------------------(Constant) 12.238*** 14.597*** Absorptive Capacity Recipient Collaborativeness R-squared Adjusted R-squared 0.113 0.399*** 0.221 0.208 0.047 0.491*** 0.269 0.257
F 17.690*** 22.954*** ------------------------------------------------------------------------------------------------------------------------------------------- Cell entries are standardised coefficient estimates (n = 128) * p < 0.05, ** p < 0.01, *** p < 0.001
Surprisingly, although absorptive capacity has a strong theoretical foundation as highlighted by previous literature, nevertheless contrary to this study expectation, it has failed to provide any significant effect on both degrees of tacit and explicit knowledge (p > 0.05). In this study, absorptive capacity as one of the critical elements of technology recipient characteristics has not really contributed to a higher degrees of tacit and explicit knowledge in inter-firm TT though the direction was correctly hypothesized. Thus, H1 is not supported. The results suggest that the presence of prior related knowledge about specific technology and intensity of effort, as critical components of absorptive capacity, do not necessarily help to increase degrees of tacit and explicit knowledge in IJVs. This unexpected outcome is probably due to the high degree of partner protectiveness (organizational and skills) which will undermine the learning (transfer) process, low organizational and individual learning commitment, and low motivation to learn.

Based on the underlying integrated KBV and OL perspectives and since many of the inter-firm TT studies are theoritical and still under researched, this study has bridged the literature gaps by providing empirical evidence on the effects of two critical elements of technology recipient characteristics (ACAP and SPEC) on degree of inter-firm technology transfer and its two distinct dimensions namely: degree of tacit (TCTDEG) and explicit (EXPDEG) knowledge in IJVs using
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the Malaysia sample. From the regression results, the strong significant effects of RCOL on both degrees of tacit and explicit knowledge confirm 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 the degree of tacit and explicit knowledge will be transferred by the foreign JV partners. In the cooperative venture such as JVs, the partner s learning intent is therefore crucial in encouraging openness and transparency of the transferring partner to share and transfer more technology (Inkpen, 2000). Thus, if learning in JVs is being considered as competitive rather than collaborative, it restricts the 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 interpartner 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 prevent the transfer of technology (Inkpen, 1998a, 2000). 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). On the insignificance effects of absorptive capacity on both degrees of tacit and explicit knowledge (p > 0.05), the first plausible argument is that transferring technological knowledge in strategic alliances and IJVs is an inter-partner organizational learning process; where it depends not only on prior related knowledge and intensity of effort of the learning partner but also other preconditions for receptivity (absorptive capacity) of the learning partner such as sense of confidence, need to first to unlearn, size of skills gap with industry, and ability to turn institutional learning to individual learning (Hamel, 1991). Moreover, the receptivity or absorptive capacity/capability of the learning partner (recipient) would not have significant effect on learning if 1) the transferring partner s (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. Secondly, by looking at the results, there is a tendency that the effect of absorptive capacity in the study s models was superseded by the strong effect of recipient collaborativeness on both degrees of tacit and explicit knowledge thus overshadowing the significant role of absorptive capacity.
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The results are consistent with Lane et al. (2001) where the effect of prior knowledge on knowledge learned from IJVs was found less significant in Hungarian IJVs.
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8
The Effects of Relationship Characteristics on Degree of Inter-Firm Technology Transfer
CHAPTER OUTLINE
The success of technology transfer (TT) within international joint ventures (IJVs) in the developing countries has frequently been measured by the degree of technology that is transferred to local partners. As compared to other formal technology transfer agents such as foreign direct investments (FDIs) and licensing, technology transfer through IJVs have been acknowledged by many studies as the most efficient mechanism to internalize the foreign partner s technologies, knowledge and skills which are organizationally embedded. However, the transfer process has always involved a complex relationship between IJV partners which may cause direct impact on degree of technology transfer. The success of inter-firm TT requires a strong existence of a close and intense communications between the technology supplier and recipient.
INTRODUCTION
The current issue on inter-firm technology transfer (TT) in the developing countries is revolved around the issue of efficiency and effectiveness of the transfer process by the multinationals (MNCs) (Pak and Park, 2004; Yin and Bao, 2006). Therefore, organizations in the developing countries are attempting to collaborate, learn and internalize their foreign partner s technological knowledge by forming strategic alliances and IJVs with foreign multinational corporations (MNCs) as an efficient mean to enhance their global competitiveness, technological capabilities, and potential for local innovation. Nevertheless, the inter-firm technology transfers (TT) in IJVs have often involved tradeoffs between the technology suppliers willingness to transfer their considerable amount of technologies; which include tacit and explicit knowledge, degree of protection of the proprietary technology (knowledge and competencies) as the source of the 144
supplier s competitive advantage (Inkpen, 2000), degree of transparency (Hamel, 1991), and motivation to transfer (Szulanski, 1996). Previous studies on intra-firm knowledge transfer have confirmed the significant influence of technology actors and facilitators (barriers) such as the characteristics of knowledge transferred, source, recipient and contextual/relational on knowledge transfer process (Szulanski, 1996, 2000, 2003; Gupta and Govindarajan, 2000; Minbaeva, 2007). Thus, in the context of inter-firm TT where technology transfer processes involve more complex relationship, the impending issue now is on the extent of effects of relationship characteristics (RCHAR) on degree or level of technology transfer (TTDEG). Relationship characteristics, as one of the important TT characteristics, have increasingly become dominant factors in determining the success or failure of inter-firm technology transfer within IJVs (Pak and Park, 2004; Minbaeva, 2007). Studies from the KBV perspective have acknowledged that MNCs tend to become more protective of their advance technology, knowledge and competencies in products, processes and management because these strategic valuable resources and competencies are their main sources of sustainable competitive advantage (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel). The OL perspective studies have also argued that technology and knowledge are protected by the supplier when the recipients are opportunistic in the collaborative relationship (Inkpen, 1998a; Inkpen and Dinur, 1998; Child and Faulkner, 1998). Motivated by limited empirical studies on inter-firm technology transfer and in response to literature gaps, this study empirically examine the effects of two critical elements of relationship characteristics: relationship quality (RELQLTY) and mutual trust (MT) on two dimensions of degree of technology transfer: degree of tacit (TCTDEG) and explicit (EXPDEG) knowledge from the local (recipient) firms perspective based on the underlying KBV and OL perspectives.
RELATIONSHIP CHARACTERISTICS
A large stream of literatures has identified the relationship characteristic (RCHAR); which include JV s 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 145
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), interpartner 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).
RELATIONSHIP QUALITY AND DEGREE OF TECHNOLOGY TRANSFER

In order to facilitate the intra and inter-firm TT, both technology supplier and recipient are expected to establish a close relationship between them. For firms which have differences in terms of the organizational structures, cultural backgrounds, experiences, capabilities, learning intent and technological resources, transferring technology is rather a challenging process (Argote, 1999; Hamel, 1991). As knowledge is a firm-specific, embedded in firm organizational context, personal in nature and idiosyncrasy (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 literature on both intra and inter-firm knowledge transfer (KT) reveals that RELQLTY has been operationalized from many dimensions such as 1) ease of communication and intimacy of relationship between the source and recipient unit (Szulanski, 1996), 2) existence and richness of transmission channels (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) personal
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attachment between partners (Luo, 2001), and 12) extensive communication between JV s partners (Inkpen, 2000). The importance of numerous individual exchanges in transferring tacit knowledge within organization is achievable through ease of communication and intimacy of relationship
between the source and recipient units thus a problematic relationship between the source and recipient will 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. Informality, openness and communication density 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). From the inter-firm KT context, Lin (2005) categorizes quality interaction in terms of its frequency, adequacy, amiability and constructiveness. Strategic alliance literature has explicitly highlighted 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 directly affects the willingness and ability of alliance partners to share information and communicate openly (Inkpen, 1998a, 2000). The inter-partner RELQLTY is also reflected on 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 organizational learning process; which suggest that more resources are likely to be invested in learning by the parent firms that regard their alliance relationship as open (Hamel, 1991). Thus, a close and intense interaction between alliances partners act as an effective mechanism to acquire, transfer or learn tacit and explicit knowledge across the organizational interface (von Hippel, 1988; Marsden, 1990; Kale et al., 2000).
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Empirical studies examining the relationship between RELQLTY and knowledge transfer are found to be very limited as most of them are theoretical although the previous researchers have highlighted its importance effects on knowledge acquisition (Yin and Bao, 2006). 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). Surprisingly, in the context of inter-firm KT although RELQLTY has been extensively debated by the literature, nevertheless, the empirical studies are still very limited. In the context of inter-firm KT, RELQLTY has a significant positive impact on knowledge acquisition (Lin, 2005), and effective interpersonal communication between supplier and recipient through visits and meetings has significantly facilitated cross border KT (Bresman et al., 1999). As opposed to quality interaction, the JV literature has established that conflicts in general may lead to instability and poor JVs 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). H1: Relationship quality between IJV partners is positively related to a higher degree of interfirm technology transfer.
MUTUAL TRUST
Inter-partner mutual trust (MT) is critical in the collaborative relationship as MT 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 (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). 148
High degree of MT in a collaborative relationship strongly indicates that the partners 1) accept each other as an ally not as competitor (Powell et al., 1996), 2) signify their commitment by not taking advantage on the other partner s weaknesses 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 partner s opportunistic behaviors (Child and Faulkner, 1998). Trust develops potential access to the alliance s valuable resources and willingness to solve problems through mutual problem-solving (Uzzi, 1997). A collaborative alliance with low degree of trust will reduce the partner openness (transparency) in knowledge sharing and learning thus limiting the information s accuracy, comprehensiveness and timeliness (Zand, 1972; Kale et al., 2000) as the partners are reluctant to face the risk associated with sharing more valuable information (Hedlund, 1994). A lack of inter-partner trust may generate inter-firm conflicts, increase opportunistic behaviors; which eventually erode mutual understanding (Tsang et al., 2004). The inter-partner trust also 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 IJVs as no contracts/agreements can cover all the variations and conditions that can occur (Dhanaraj et al., 2004). 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 alliances partners (Kale et al., 2000). Past studies on MT are mainly theoretical (Nielsen, 2007). Nevertheless, few empirical studies have suggested that MT between alliance partners as an important determinant in the alliance performance in terms of 1) reducing search cost, increasing efficiency, enhancing benefits and alliance s performance (Gulati, 1995), 2) increasing alliance s cooperation, improving flexibility, reducing coordinating activities cost and increasing KT and learning (Smith et al., 1995) and, 3) reducing negotiating costs in alliances and enhancing alliance performance (Zaheer et al., 1998). Few strategic alliance studies on IJVs have also offered empirical evidence. In general, MT has a 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 Park s (2004) findings suggest that inter-firm conflicts erode MT when the transferring partners tend to 149
be more protective of their knowledge and unwilling to share knowledge due to suspicion of opportunistic behaviors of the recipient partners. H2: Mutual Trust between IJV partners is positively related to a higher degree of inter-firm technology transfer.

The sample frame was taken from the IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs operating in Malaysia was 1038. Out of this, 850 IJVs 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 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter. After one month from the posting date the response was found not encouraging. By mid July 2008 there were only 70 responses 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, 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; Sakaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001; Norziha, 2004). From 145 responses only 128 questionnaires were usable and 17 questionnaires were returned blank, returned incomplete, or replied but unable to participate in the study. 150

The main research instrument in this study is the questionnaire. Building on the previous KT and TT studies, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm TT. Except for degree of technology transfer (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 was 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).

operationalizes TTDEG as the transfer of technological knowledge in terms of two dimensions: 1) tacit knowledge (TCTDEG) in terms of new product/service development, managerial systems and practice, process designs and new marketing expertise, and 2) explicit knowledge (EXPDEG) in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing know-how. The respondents were asked to evaluate TTDEG from MNCs to local firms in terms of tacit and explicit dimensions of technological knowledge. The Cronbach Alphas for TCTDEG and EXPDEG were 0.96 and 0.97 respectively. The results of Cronbach Alpha were quite similar to that of Hau and Evangelista (2007) and Yin and Bao (2006).
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RELATIONSHIP QUALITY
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 partner s effort in ensuring that interaction is 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 JV and they know that their concern will be addressed, 3) the foreign and local JV partners are confident in each other s 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 partner s 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. The Cronbach Alpha for RELQLTY was slightly higher (0.96) than that of (Lin, 2005).
MUTUAL TRUST
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 are perceived as significant as formal agreement, and 6) the JV partners take advantage on the weakness of the other party
152
(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. The Cronbach Alpha was lower slightly lower (0.88) than Dhanaraj et al. (2004).
RESULTS Table 1 shows the descriptive data of all the variables (Mean values, Standard Deviations, Correlations). The results of regression analysis are presented in Table 2 below. Table 1: Descriptive Statistics and Correlation Matrix.
-------------------------------------------------------------------------------------------------------------------------------------------Variable Mean SD 1 2 3 -------------------------------------------------------------------------------------------------------------------------------------------RELQLTY 5.91 1.45 1.000 MT 7.07 1.35 0.449** 1.000 TCTDEG 6.29 1.31 0.481** 0.720** 1.000 RELQLTY 6.47 1.34 1.000 MT 7.07 1.35 0.564** 1.000 EXPDEG 6.29 1.31 0.512** 0.721** 1.000 -------------------------------------------------------------------------------------------------------------------------------------------n = 128, * p < 0.05, ** p < 0.01
From Table 1 above, there are clearly some associations between independent variables. For all the variables, it was found that there was no multicollinearity problem; where the T values were ranged between 0.481 - 0.491 and the VIF values were between 2.077 - 2.177. Both relationship quality (RELQLTY) and mutual trust (MT) were strongly correlated with degree of tacit knowledge (TCTDEG) (p < 0.01). It is also noted that RELQLTY and MT had positive signs indicating consistency with the theoretical arguments in the literature. The correlation results also indicated that both RELQLTY and MT had recorded strong correlations with EXPDEG (p < 0.01). Using multiple regression analysis, the effects of RELQLTY and MT on two dimensions of degree of technology transfer (TCTDEG and EXPDEG) were estimated. As shown in Table 2 below, relationship quality as a critical component of relationship characteristics had significant effect on both degrees of tacit and explicit knowledge in inter-firm TT. The regression results 153
indicated that RELQLTY in Model 2 had a stronger positive significant effect on degree of explicit knowledge (p < 0.05, Beta value = 0.406) as compared to its effect on degree of tacit knowledge in Model 1 (p < 0.05, Beta value = 0.214). This was also evident by the results of the adjusted R-squared in Model 1 and Model 2 (0.254 and 0.342 respectively) and the F statistics (8.028 and 8.804 respectively). On the corresponding p values, both results were statistically significance (p = 0.001). From the regression results H1 is supported thus indicating that the greater degree of RELQLTY, which is directly reflected on close, intimate, and informal relationship between IJV partners, contributes to a higher degree of both tacit and explicit knowledge in inter-firm TT. Interestingly, the effect of RELQLTY on degree of explicit knowledge is stronger than its effect on tacit knowledge. The finding suggests that even if frequent and effective interactions, close relationship, and intimacy of relationship do exist between IJV partners, however, transferring explicit knowledge is equally challenging simply because although explicit knowledge has been explicitly standardized in blueprints, manuals, procedures and instructions by the transferring partner, quite often, it still consists of a highly tacit, complex and specific knowledge; which is difficult to be articulated and understood without the existence of teacher-student relationship. Table 2: Results of group Regression Analysis
-------------------------------------------------------------------------------------------------------------------------------------------Variable Degree of Tacit Knowledge Degree of Explicit Knowledge (Model 1) (Model 2) -------------------------------------------------------------------------------------------------------------------------------------------(Constant) 8.028*** 8.804*** Relationship Quality Mutual Trust R-squared Adjusted R-squared 0.214* 0.327** 0.254 0.242 0.406** 0.220* 0.342 0.331
Consistent with the study s prediction, mutual trust which has strong theoretical foundation showed a similar strong significant effects on both degrees of tacit and explicit knowledge (p < 154
0.01 and p < 0.05 respectively). As compared to the effect of MT on EXPDEG (p < 0.05) in Model 2, MT recorded slightly stronger and better effect on TCTDEG in Model 1 (p < 0.01) indicating a higher degree of tacit knowledge will likely be transferred to recipient partner as compared to explicit knowledge. This suggests that tacit knowledge in IJVs is more accessible by the recipient partner when IJV partners trust each other where no suspicious feelings exist between them. The results further suggest that when the learning partner adopts the collaborative learning intent, the transferring partner will become less protective of their technologies and is more likely to be transparent in sharing tacit knowledge than explicit knowledge. Thus, based on the two regression results for Model 1 and Model 2 above, H2 is supported.

Building on the underlying integrated KBV and OL perspectives, this study has bridged the literature gaps by providing empirical evidence on the effects of two critical elements of relationship characteristics: relationship quality (RELQLTY) and mutual trust (MT) on two distinct dimensions of degree of inter-firm technology transfer: degree of tacit (TCTDEG) and explicit (EXPDEG) knowledge in IJVs using the Malaysian sample. 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 strong impact of RELQLTY on both degrees of technology transfer (TCTDEG and EXPDEG) suggests that the greater the quality of relationship the higher the degree of technology transfer within the JVs. The results further suggest that 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 (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 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 155
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 JV s instability thus minimizing the flows of information. On the significant effect of mutual trust (MT) on both degrees of technology transfer, the results were expected given that many theoretical studies have consistently highlighted the importance of MT between JV partners (Gulati, 1995; Kale et al., 2000; Powell, 1996). The strong significant positive effects of MT on TCTDEG and EXPDEG suggests 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 (Kale et al., 2000). 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 (Zand, 1972; Kale et al., 2000).
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Part III
Degree of Technology Transfer and Organizational Performance
9 - Measuring the Effect of Degree of Inter-Firm Technology Transfer on Local Firms Performance
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9
Measuring the Effect of Degree of Inter-Firm Technology Transfer on Local Firms Performance
CHAPTER OUTLINE
The inter-firm technology transfers (TT) through international joint ventures (IJVs), among others, 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. Since the focus of inter-firm TT has shifted its focus to degree of technology transfer, the organizations in the developing countries are attempting to assess the significant role of tacit and explicit knowledge in strengthening their corporate and human resource performances. While both tacit and explicit technologies are viewed as the main source of competitive advantage of the technology supplier, therefore in order to increase and further improve their performance, the major challenge faced by the local recipient organizations in the transfer process is to optimize the potential benefits of learning for both tacit and explicit knowledge which arise from IJVs.
INTRODUCTION
In the context of 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 a 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, mainly depend on the multinational corporations (MNCs) as its 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 162
undertake nearly 80% of all private R&D expenditures worldwide (Dunning, 1993). Past studies have acknowledged the important role of MNCs as the main source of technology; where MNCs are regarded as the most efficient vehicle for transferring technology and knowledge across borders especially through international joint ventures (IJVs), (Tihanyi and Roath, 2002; Kogut and Zander, 1993).
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 technology transfer (TT) to occur through inter-partner learning between foreign MNCs and local firms (Kogut and Zander, 1993; Inkpen 1998a, 2000). IJVs are also 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). IJVs provide both MNCs and local partners an appropriate avenue 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). Since JVs is one of the formal and externalized mechanisms of TT which could directly affect organizational performance, therefore the next intriguing issue is on the extent of degree of technology transfer (TTDEG) in affecting the performance of local firms; specifically on how TTDEG could have significantly influenced the corporate and human resource/competencies performance of local firms. Based on the underlying knowledge-based view (KBV) and organizational learning (OL) perspectives, this study expects to fill in the literature gaps by empirically examining the effects of two distinct degrees of technology transfer: degrees of tacit (TCTDEG) and explicit (EXPDEG) on two dimensions of local firms performance (LFP): corporate and human resource performances using data generated from JV companies formed in Malaysia.

The current TT issue in IJVs revolves around the extent of degree of technologies that are transferred (TTDEG) by the suppliers to recipient partners (Pak and Park, 2004; Minbaeva, 163
2007). The question is no longer whether or not the MNCs are transferring technology to local firms instead the focus in the literature has shifted to questions on 1) the level (sophistication) of the transferred technology, and 2) the stage where the transfer process has reached (Lai and Narayanan, 1997; Narayanan and Lai, 2000). Except for Pak and Park (2004) and Minbaeva (2007), not many studies in both intra and inter-firm TT have focused on TTDEG as independent or dependent variable. In general, bulk of the studies has focused more on technological knowledge and knowledge acquisition per se as the outcomes (dependant variables). For example, the technology transfer, knowledge transfer (KT) and strategic alliance literature have extensively examined the 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, 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). Although the previous researchers have not specifically dealt with TTDEG as a variable, however, a number of studies have operationalized degree (amount) of technology transferred to the recipient firm in terms of the extent of type of technological knowledge that are transferred or acquired for instance 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) managerial skills (Wong et al., 164
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 (Minbaeva, 2007). In the context of inter-firm technological knowledge transfer in IJVs, only Pak and Park (2004) have directly dealt with degree of knowledge transfer as the outcome (dependent variable) with respect to the transfer of new product development and manufacturing skills/techniques.
DEGREE OF TECHNOLOGY TRANSFER AND LOCAL FIRMS PERFORMANCE

A review of the literature indicates that previous researchers have broadly categorized technology in terms of its tacit vs. explicit dimension (Polanyi, 1967). These two forms of technology are also referred to as hardware and software technology. The technology term 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 is easily codified, shared, transmitted, retrieved, reused, transferable in formal or systematic language i.e. production manuals, academic papers, books, technical specifications, and 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). The KBV studies have argued that tacit knowledge, which includes insights, intuitions, hunches, rule of thumb, gut feeling, personal and organizational skills 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 165
not even possible no matter how much efforts 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 and not codifiable in formulas or manuals, and cannot be easily reverse-engineered (Zander and Kogut, 1995). On the other hand, explicit knowledge such as product technologies, physical distribution methods, and promotion techniques, lies in the organization s policies, systems, guidelines and standardized procedures, and could be acquired, exploited and transferred inter-organizationally in a formal and systematic 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 firm s competitive advantage (Kogut and Zander, 1992; Winter, 1987). 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, 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). The OL literature theoretically deals with organization tacit knowledge from several dimensions for instance: 1) tacit knowledge as an important key in building the organization s 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 of alliance knowledge acquisition by partners (Inkpen, 2000). The TT and KT literature have also acknowledged that a substantial transfer of technology regardless whether tacit or explicit technology will positively 1) lead to a higher potentials of innovation performance/capabilities (Guan et al., 2006; Kotabe et al., 2007)), 2) increase technological capabilities (Kumar et al., 1999; Madanmohan et al., 2004), 3) enhance competitive advantage (Liao and Hu, 2007; Rodriguez and Rodriguez, 2005), 4) enhance organizational learning effectiveness (Inkpen, 2000; Inkpen and Dinur, 1998), 5) improve 166
productivity (Caves, 1974; Xu, 2000; Liu and Wang, 2003), 6) increase technological development of local industry (Markusen and Venables, 1999), and 7) improve the economic growth of the host country (Blomstrom, 1990). Most of the studies on strategic alliance operationalize performance as either the JV s or MNCs subsidiary performance. A review of literature reveals that most of the empirical studies on interfirm technology and knowledge transfer in strategic alliance, particularly on 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 concentrate on the performance of the MNCs subsidiary in the host countries (Chen, 1996; Chung, 2001; Ofer & Potterovich, 2000, Cui et al., 2006; Lin, 2003). 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: H1: A higher degree of tacit and explicit knowledge in inter-firm technology transfer is positively related to a higher degree of local firms corporate performance. H2: A higher degree of tacit and explicit knowledge in inter-firm technology transfer is positively related to a higher degree of local firms human resources performance.
METHODOLOGY AND SAMPLE The sample frame was taken from the IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs operating in Malaysia was 1038. Out of this, 850 IJVs 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 167
companies, 85 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter. After one month from the posting date the response was found not encouraging. By mid July 2008 there were only 70 responses 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, 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; Sakaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001; Norziha, 2004). From 145 responses only 128 questionnaires were usable and 17 questionnaires were returned blank, returned incomplete, or replied but unable to participate in the study. The main research instrument in this study is the questionnaire. Building on the previous KT and TT studies, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm TT. Except for degree of technology transfer (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 was 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).
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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 firm s 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 IJV s top management assessments using a multi-dimensional performance indicators . The CPERF, as the first dimension of LFP, is measured by a four (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). The Cronbach Alphas for CPERF and HRPERF were 0.926 and 0.97 respectively. The results of Cronbach Alpha were well above of Lyles and Salk (1996).

operationalizes TTDEG as the transfer of technological knowledge from two dimensions: 1) tacit knowledge (TCTDEG) in terms of new product/service development, managerial systems and practice, process designs and new marketing expertise, and 2) explicit knowledge (EXPDEG) in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution knowhow, 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. The Cronbach Alphas for TCTDEG and EXPDEG were 0.96 and 0.97 respectively. The results of Cronbach Alpha were quite similar to that of Hau and Evangelista (2007) and Yin and Bao (2006). 169
RESULTS
Table 1 shows the descriptive data of all the variables (Mean values, Standard Deviations, Correlations). The results of regression analysis are presented in Table 2 below. Table 1: Descriptive Statistics and Correlation Matrix.
-------------------------------------------------------------------------------------------------------------------------------------------Variable Mean SD 1 2 3 -------------------------------------------------------------------------------------------------------------------------------------------TCTDEG 5.72 1.74 1.000 EXPDEG 5.91 1.45 0.747** 1.000 CPERF 6.47 1.34 0.597** 0.660** 1.000 TCTDEG 6.08 1.48 1.000 EXPDEG 5.91 1.45 0.747** 1.000 HRPERF 6.47 1.34 0.639** 0.740** 1.000 -------------------------------------------------------------------------------------------------------------------------------------------n = 128, * p < 0.05, ** p < 0.01
From Table 1 above, there are clearly some associations between independent variables. For all the variables, it was found that there was no multicollinearity problem; where the T values were ranged between 0.442 - 0.444 and the VIF values were between 2.262 - 2.377. Both degrees of tacit (TCTDEG) and explicit (EXPDEG) knowledge were strongly correlated with corporate performance (CPERF) (p < 0.01). It is also noted that TCTDEG and EXPDEG had positive signs indicating consistency with the theoretical arguments in the literature. The correlation results also indicated that both TCTDEG and EXPDEG had recorded strong correlations with HRPERF (p < 0.01). Using multiple regression analysis, the effects of TCTDEG and EXPDEG on two dimensions of performance (CPERF and HRPERF) were estimated. As shown in Table 2 below, TCTDEG as a critical component of degree of technology transfer had significant effect on both corporate and human resource performances in inter-firm TT. The regression results indicated that TCTDEG in Model 1 had a stronger positive significant effect on corporate performance (p < 0.001, Beta value = 0.485) as compared to its effect on human resource performance in Model 2 (p < 0.05, Beta value = 0.196). This was also evident by the results of the adjusted R-squared in Model 1 and Model 2 (0.452 and 0.557 respectively) and the F statistics (53.309 and 80.836 respectively). On the corresponding p values, both results were statistically significance (p = 0.001). From the
170
regression results H1 is supported thus indicating that greater degrees of tacit and explicit knowledge transfer significantly contributes to a higher corporate and human resource performance in inter-firm TT through IJVs. Interestingly, the effect of TCTDEG on corporate performance is stronger than its effect on HRPERF. The finding suggests that technological knowledge on new product/service development, managerial systems/practice, process designs and new marketing expertise which are found to be more tacit, complex and firm-specific could significantly generate a higher degree of corporate performance specifically the business volume, market share, planned goals and profits of local recipient partners. Table 2: Results of group Regression Analysis
-------------------------------------------------------------------------------------------------------------------------------------------Variable Corporate Performance Human Resource Performance (Model 1) (Model 2) -------------------------------------------------------------------------------------------------------------------------------------------(Constant) 1.366*** 8.804*** TCTDEG EXPDEG R-squared Adjusted R-squared 0.485*** 0.234** 0.460 0.452 0.196* 0.593*** 0.564 0.557
Consistent with the study s prediction, EXPDEG which has strong theoretical foundation showed a similar strong significant effects on both corporate and human resource performances (p < 0.01 and p < 0.001 respectively). As compared to the effect of EXPDEG on CPERF (p < 0.01, Beta value = 0.234) in Model 1, EXPDEG recorded an impressive stronger and better effect on HRPERF in Model 2 (p < 0.001, Beta value = 0.593) indicating a higher degree of explicit knowledge will likely to enhance more and better human resource performance as compared to corporate performance. This suggests that technological knowledge on product/service quality, employees productivity, managerial techniques/skills and operational efficiency; which are less tacit, easier to articulate, and transferrable are more likely to generate a higher degree of human resource performance specifically the product/service quality, employees productivity, 171
managerial techniques/skills and operational efficiency. Thus, based on the two regression results for Model 1 and Model 2 above, H2 is supported.
DISCUSSION AND CONCLUSION Building on the underlying KBV and OL perspectives, this study has bridged the literature gaps by providing empirical evidence on the effects of two distinct degrees of technology transfer: degrees of tacit and explicit knowledge on two dimensions of performance: corporate and human resource performances using the Malaysia sample. The results suggest 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 which found that both tacit (TCTDEG) and explicit (EXPDEG) knowledge are highly capable in increasing both corporate and human resource performances (Lane et al., 2001; Lyles and Salk, 1996; Yin and Bao, 2006; Tsang et al., 2004) suggesting that a higher degree of TCTDEG and EXPDEG contributes to high improvement and increment of 1) the local firms business volume, market share, planned goals, and profit, and 2) the local firms product/service quality, employees productivity, managerial techniques/skills, and operational efficiency (Dhanaraj et al., 2004). Interestingly, the results for significant effect of TCTDEG 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 increase of local firms competitiveness, technological capabilities, organizational learning effectiveness,
productivity and create potentials for innovations (Inkpen, 2000; Inkpen and Dinur, 1998; Xu, 2000; Liu and Wang, 2003). The results have expanded the general findings by Dhanaraj et al. (2004); where TCTDEG had a significant effect on IJV performance. The significant role of degree of explicit knowledge (EXPDEG) 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 172
less stickier than tacit knowledge, easier to articulate and understand, and more easy to share, communicate and transfer. Comparable to other formal market channels such as direct exporting of capital goods, foreign direct investments (FDIs), and licensing agreements, this study also provides empirical evidence that the IJVs formed between the foreign MNCs and local companies indeed have significant positive effects on performance of local companies in Malaysia. The results, however, are not in line with a recent findings by Malairaja and Zawdie (2004); where their findings suggested that the TT through JVs in Malaysia have not succeeded in developing the indigenous innovation capabilities. This is particularly evident with the significant effect of degree of technology transfer (both TCTDEG and EXPDEG) on human resource performance. The significant effect of TCTDEG and EXPDEG on HRPERF in improving product quality and employees productivity will positively boost local innovation capabilities when the local employees absorptive capacity, which is based on the employees prior related knowledge and intensity of effort, is capable of absorbing, assimilating, and improving new technologies extracted from JVs (Cohen and Levintahl, 1990; Kim, 1998). 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), and increase the technological capabilities and competitiveness (Madanmohan et al., 2004; Liao and Hu, 2007; Rodriguez and Rodriguez, 2005). The results has further extended the KT literature, in particular the general findings by Minbeava (2007), Pak and Park (2004), and Hau and Evangelista (2007) on the overall significant effects of knowledge transfer and acquisition on JV s performance. Another critical finding of this study is that the main objective of the local companies participating in JVs was 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 by Lyles and Salk (1996) and Lane et al. (2001); where knowledge acquisition from foreign parent has significantly affected business and human resource performance. The results are also consistent with OL literature which views technology recipient organizations as a learning system and technology transfer as an organizational learning process (Daghfous, 2004; Bapuji and Crossan, 2004).
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Part IV
The Significant Influence of Moderating Factors
10 - MNCs Size, Technology Recipients Characteristics and Degree of Inter-Firm Technology Transfer
11 - Age of Joint Venture, Degree of Inter- Firm Technology Transfer and Local Firms Performance
12 - MNCs Country of Origin, Degree Technology Transfer and Firms Performance
13 - MNCs Equity Ownership, Degree of Technology Transfer and Firms Performance
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10
MNCs Size, Technology Recipients Characteristics and Degree of Inter-Firm Technology Transfer
CHAPTER OUTLINE
Following the recent approach in the strategic alliance literature and based on the underlying knowledge-based view (KBV) and organizational learning (OL) perspectives, this work fills in the literature gaps by specifically examining the effect of size of MNCs (large vs. medium/small MNCs) as a moderating variable in the relationships between the technology recipients characteristics (TRCHAR) and two distinct dimensions of degree of technology transfer (TTDEG): degrees of tacit (TCTDEG) and explicit (EXPDEG) knowledge. The primary objective is to provide new insights and information on the boundary conditions of TRCHAR-TTDEG relationship.
INTRODUCTION Many studies from knowledge-based view (KBV) perspective have established that MNCs tend
to be more protective of their advance technology, knowledge and competencies which embodied in products, processes and management because these strategic valuable resources and competencies are their main sources of competitive advantage (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel). On the other hand, organizational learning (OL) perspective studies have suggested that technology and knowledge are more likely to be protected by the supplier when the recipients are opportunistic in the collaborative relationship (Inkpen, 1998a; Inkpen and Dinur, 1998; Child and Faulkner, 1998). Thus, in the context of inter-firm technology transfer (TT) through international joint ventures (IJVs), the remaining question is on the extent of TT by foreign multinational corporations (MNCs); especially when transferring their advance technology to local recipient partner (Narayanan and 179
Lai, 2000). While realizing that technologies, knowledge, and competencies are the supplier s main source of competitive advantage, the current TT issue in IJVs revolves around the extent of degree of technologies (TTDEG) that are transferred by the suppliers to recipient partners in terms of tacit knowledge (new product/service development, managerial systems and practice, process designs and new marketing expertise), and explicit knowledge (manufacturing/service techniques/skills, promotion techniques/skills, distribution know-how, and purchasing knowhow) (Madanmohan et al., 2004). This is because from the recipient s perspective, TT success is not merely possessing the ability to operate, maintain or repair the machineries at the production level (transmission) but it also includes the ability to learn, acquire, absorb and apply new external technologies and knowledge that are organizationally embedded in product materials, physical assets, processes and production, and management capabilities (absorption) (Davenport and Prusak, 1998, 2000). Technology recipient characteristics (TRCHAR) have increasingly become the dominant factors in determining the success or failure of inter-firm technology transfer within IJVs (Inkpen, 2000; Pak and Park, 2004; Minbaeva, 2007; Yin and Bao, 2006). Among the TRCHAR factors that have been identified by literature to influence TT and knowledge 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). Although many studies have empirically confirmed the significant effect of knowledge transfer determinants on knowledge transfer outcomes, nevertheless, the effects of TRCHAR on TTDEG in inter-firm TT could possibly have been moderated by other established factors such as size of MNCs, age of JV, MNCs country of origin, and MNCs types of industry. In other words the variations in TTDEG could have been significantly influenced by these variables.
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From a review of literature, a bulk of studies on knowledge transfer and acquisition in strategic alliance (Szulanski, 1996; Gupta and Govindarajan, 2000; Minbaeva, 2007; Pak and Park, 2004; Lin, 2005; Wang and Nicholas, 2005; 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) have not tested the impact (strength) of moderating variables on the linear (direct) relationships between technology recipient characteristics and technology or knowledge transfer. Nevertheless, a number of studies on inter-firm KT and knowledge acquisition in strategic alliance and JVs 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) age of JV (Mohr and Sengupta, 2002), 5) alliance origin and alliance experience (Yin and Bao, 2006), 6) age of JV (Tsang et al., 2004), and 7) environmental challenge (Hau and Evangelista, 2007). Following the recent approach in the strategic alliance literature (Simonin, 1999a, 1999b, 2004; Yin and Bao, 2006; Tsang et al., 2004) and based on the underlying knowledge-based view (KBV) and organizational learning (OL) perspectives, this work fills in the literature gaps by specifically examining the effect of size of MNCs (large vs. medium/small MNCs) as a moderating variable in the relationships between the TRCHAR and two distinct dimensions of degree of technology transfer: degrees of tacit (TCTDEG) and explicit (EXPDEG) knowledge. The primary objective is to provide new insights and information on the boundary conditions of TRCHAR-TTDEG relationship (Aguinis, 2004).
SIZE OF MNCs, TECHNOLOGY RECIPIENTS CHARACTERISTICS DEGREE OF TECHNOLOGY TRANSFER
AND
As TT involves the process of transmission and absorption of knowledge (Davenport and Prusak, 1998, 2000), the recipient firm s ability to absorb the knowledge transferred largely depends on the degree of their absorptive capacity (ACAP). Absorptive capacity (ACAP) is the firm s 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 prior 181
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 s firm intensity of efforts. Intensity of effort is reflected on 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). Another important dimension of TRCHAR is recipient collaborative (RCOL). RCOL is closely related to the recipient s learning intent (competitive vs. collaborative intent). The technology recipient firm s willingness to establish a mutually beneficial and collaborative relationship requires the recipient firm s honest intention to create common benefits for both JV partners (Yin and Bao, 2006). Studies on inter-organizational learning have suggested that
cooperative/collective learning encourages the alliance partners to work together by sharing their knowledge, benefit each other s complementarities thus providing mutual opportunities to extract potential synergies between their respective competencies (Doz, 1996; Geringer, 1991). Collaborative learning creates an access to the partner s knowledge and skills such as product and process technology, organizational skills, and knowledge about new environments (Inkpen, 1995a). In the collaborative learning environment; where the recipient s learning intent is crucial, the transferring partner tends to be more open or transparent in terms of sharing and transferring knowledge to the acquiring partner as it involves mutual exchange of valuable knowledge (Inkpen, 2000). RCOL, which is reflected on the partner s learning intent, determines the degree of openness or transparency in knowledge sharing and knowledge transfer (Inkpen, 2000). 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 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, knowhow and collaborative relationship, and 2) between knowledge tacitness and ambiguity 182
(Simonin, 1997; Simonin, 2004; Dhanaraj et al., 2004; Bresman et al. 1999). However, other studies have found MNCSIZE did 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). H1: Size of MNCs moderates the relationship between technology recipient characteristics and degree of tacit knowledge in IJVs. H2: Size of MNCs moderates the relationship between technology recipient characteristics and degree of explicit knowledge in IJVs.

The sample frame was taken from the IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs operating in Malaysia was 1038. Out of this, 850 IJVs 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 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter. After one month from the posting date the response was found not encouraging. By mid July 2008 there were only 70 responses 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, 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; Sakaran, 2003). In the Malaysian context, 183
however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001). From 145 responses only 128 questionnaires were usable and 17 questionnaires were returned blank, returned incomplete, or replied but unable to participate in the study. The main research instrument in this study is the questionnaire. Building on the previous TT and KT studies, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm TT. Except for degree of technology transfer (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 was 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).

operationalizes TTDEG as the transfer of technological knowledge from two dimensions: 1) tacit knowledge (TCTDEG) in terms of new product/service development, managerial systems and practice, process designs and new marketing expertise, and 2) explicit knowledge (EXPDEG) in terms of manufacturing/service techniques/skills, promotion techniques/skills, distribution knowhow, and purchasing know-how. The respondents were asked to evaluate TTDEG from MNCs to local firms in terms of tacit and explicit dimensions of technological knowledge. The Cronbach Alphas for TCTDEG and EXPDEG were 0.96 and 0.97 respectively. The results of Cronbach Alpha were quite similar to that of Hau and Evangelista (2007) and Yin and Bao (2006).
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TECHNOLOGY RECIPIENTS CHARACTERISTICS (TRCHAR)

This study concentrates on two distinct elements of TRCHAR: absorptive capacity (ACAP) and recipient collaborativeness (RCOL); which have strong theoretical and empirical supports (Cohen and Levinthal, 1990; Hamel, 1991; Simonin, 1999a). This study captures the technology recipients capability, willingness to absorb new knowledge and attitude towards learning.
ABSORPTIVE CAPACITY
Building on Lane et al. (2001), this study captures absorptive capacity s (ACAP) 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 firm s ability to understand, assimilate and apply new technology transferred by the foreign parent firm. The Cronbach Alpha for ACAP was higher (0.94) than Simonin s (2004) Cronbach Alpha (0.81).
RECIPIENT COLLABORATIVENESS
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 partner s learning objective, 2) the local partner s desire, determination and will to learn from foreign partner, 3) the technology-recipient s willingness to allow foreign partner to inspect and monitor the use of knowledge acquired from JV, 4) the local partner s commitment not to compete directly with the foreign partner in the future, and 5) the local partner s commitment in sharing with the foreign partner the benefits of the critical knowledge acquired from the JV (Yin and Bao, 2006; Thuc
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Anh et al., 2006; Hamel, 1991; Simonin, 2004). The Cronbach Alpha for RCOL was higher (0.92) than Yin and Bao s (2006) Cronbach Alpha (0.71).
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).
MODEL AND ANALYSIS

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). Using the MMR analysis, the moderating effect of the variable (product term) was 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 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 , 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, Equation 1 below was used to represent the variables in the ordinary least-squares (OLS) model: Equation 1 (OLS model): Y = 0 + 1X+ 2Z + e
To determine the presence of moderating effect, the OLS model was then compared with the MMR model which was represented by Equation 2 below:
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Equation 2 (MMR model): Y = 0 + 1X+ 2Z + 3X*Z + e
where, Y = degree of technology of transfer (TCTDEG and EXPDEG as the dependent variables), X = technology recipient characteristics (absorptive capacity and recipient collaborativeness), Z = a hypothesized binary grouping moderator (MNCSIZE; large vs. medium/small), X*Z = the product between the predictors (TRCHAR*MNCSIZE), 0 = the
intercept of the line-of-best-of-fit which represents the value of Y when X = 0, 1 = the leastsquares estimate of the population regression coefficient for X, 2 = the least-squares estimate of the population regression coefficient for Z, 3 = the sample-base least-squares estimates of the population regression coefficient for the product term, and e = the error term. The moderating variable (product term) is a binary grouping moderator; where the moderating variable MNCSIZE was coded using the dummy coding system; 0 = large MNCs, and 1 = medium/small MNCs. This was done because of its simplicity and ease of interpretation of results when making comparisons between different groups (Aguinis, 2004).
RESULTS
Table 1 and Table 2 show the model summary for both degrees of tacit (TCTDEG) and explicit (EXPDEG) knowledge. The coefficients for all variables for Model 1 and Model 2 (for both TCTDEG and EXPDEG) are presented in Table 3 and Table 4 below. Table 1: Model Summary - Degree of Tacit Knowledge
Model Summaryc Change Statistics Model 1 2 R .488a .522b R Square .238 .272 Adjusted R Square .225 .255 Std. Error of the Estimate 5.107 5.010 R Square Change .238 .035 F Change 19.488 5.891 df1 2 1 df2 125 124 Sig. F Change .000 .017
a. Predictors: (Constant), MNCSIZE, TRCHAR b. Predictors: (Constant), MNCSIZE, TRCHAR, TRCHAR*MNCSIZE c. Dependent Variable: TCTDEG
Table 1 above shows that for Model 1, R = .488, R = .238 and [F (2, 125) = 19.488, p = .0001]. This R means that 23.8% of the variance in the TCTDEG is explained by TRCHAR scores and 187
MNCSIZE. Model 2 shows the results after the product term (TRCHAR*MNCSIZE) was included in the equation. Table 1 also indicates that the inclusion of the product term resulted in an R change of .035, [F (1, 124) = 5.891, p < 0.01]. The results support the presence of a moderating effect. To put it differently, the moderating effect of MNCSIZE explains 3.5% variance in the TCTDEG above and beyond the variance by TRCHAR scores and MNCSIZE. Thus, it can reasonably be concluded that hypothesis H1 is supported. Table 2: Model Summary - Degree of Explicit Knowledge
a. Predictors: (Constant), MNCSIZE, TRCHAR b. Predictors: (Constant), MNCSIZE, TRCHAR, TRCHAR*MNCSIZE c. Dependent Variable: EXPDEG
Table 2 above shows that for Model 1, R = .471, R = .222 and [F (2, 125) = 17.831, p = .0001]. This R means that 22.2% of the variance in the EXPDEG is explained by TRCHAR scores and MNCSIZE. Model 2 also shows the results after the product term (TRCHAR*MNCSIZE) was included in the equation. Table 2 above indicates that the inclusion of the product term resulted in an R change of .009, [F (1, 124) = 1.467, p > 0.05]. The results show no presence of significant moderating effect. To put it differently, the moderating effect of MNCSIZE explains only 0.9% variance in the EXPDEG above and beyond the variance by TRCHAR scores and MNCSIZE. Thus, it can safely be concluded that hypothesis H2 is not supported. The coefficients table for TCTDEG as shown in Table 3 below depicts the results of the regressions equation for Model 1 and Model 2.
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Table 3: Coefficients - Degree of Tacit Knowledge

Coefficientsa Unstandardized Coefficients B Std. Error 16.348 2.150 .114 .024 -2.811 .942 8.503 3.859 .207 .045 7.709 4.432 -.129 .053 Standardized Coefficients Beta .376 -.239 .685 .655 -.899 95% Confidence Interval for B Lower Bound Upper Bound 12.092 20.603 .066 .161 -4.676 -.947 .865 16.142 .118 .297 -1.062 16.481 -.234 -.024
Model 1
(Constant) TRCHAR MNCSIZE (Constant) TRCHAR MNCSIZE TRCHAR*MNCSIZE
t 7.603 4.698 -2.984 2.203 4.579 1.740 -2.427
Sig. .000 .000 .003 .029 .000 .084 .017
a. Dependent Variable: TCTDEG
Model 1 indicates that TRCHAR was statistically significant (p < 0.001; Beta value = 0.376); and MNCSIZE was statistically significant (p < 0.05; Beta value = -0.239). Equation 3 below shows that for a 1-point increase in TRCHAR, the TCTDEG is predicted to have a difference by .114, given that the MNCSIZE is held constant. The regression coefficient associated with MNCSIZE means that the difference in TCTDEG between large and medium/small MNCs is 2.811, given that TRCHAR is held constant.
Equation 3: TCTDEG = 16.348 + .114TRCHAR - 2.811MNCSIZE
The high-order of interaction effects of the MMR test was conducted to differentiate the degree of technology transferred by large and medium/small MNCs. Model 2 shows the results after the product term (TRCHAR*MNCSIZE) was included in the equation. As indicated in Table 1 the inclusion of product term resulted in an R change of .035, [F (1, 124) = 5.891, p < 0.01]. Model 2 shows TRCHAR are highly significant (p < 0.001; Beta value = .685). Both MNCSIZE and TRCHAR*MNCSIZE were also found to be significant (p < 0.10; Beta value = 0.655 and p < 0.01; Beta value = -0.899 respectively). The results support the presence of a moderating effect. Table 3 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 4: TCTDEG = 8.503 + .207TRCHAR + 7.709MNCSIZE - .129TRCHAR*MNCSIZE
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As indicated above, the interpretation of the regression coefficients is 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 the TRCHAR, the TCTDEG is predicted to have a difference by .207, given that MNCSIZE is held constant. The interpretation of the regression coefficients for the product term in Equation 4 is that there is a -.129 difference between the slope of TCTDEG on TRCHAR between large and medium/small MNCs. In other words, the slope regressing TCTDEG on TRCHAR is steeper for medium/small MNCs as compared to large MNCs. The TRCHAR and TCTDEG relationship for large and medium/small MNCs is shown in Figure 1 below by creating a graph displaying the relationships for each of the groups (Aguinis, 2004). From the results of descriptive statistics, the value of the mean score for TRCHAR is 6.57; and for the standard deviation (SD) is 1.60. Following Aguinis (2004), the value 1 SD above the mean is 8.17 and the value 1 SD below the mean is 4.97. Thus, using the value of 1 (SD) above and 1 (SD) below mean in Equation 4 yields the graph shown in Figure 1. Results based on Equation 4 led to the conclusion that there was a moderating effect of MNCSIZE. Figure 1 below shows that the TRCHAR-TCTDEG relationship is stronger (i.e. steeper slope) for medium/small MNCs as compared to large MNCs. The coefficients table for EXPDEG as shown in Table 4 below depicts the results of the regressions equation for Model 1 and Model 2. Table 4: Coefficients - Degree of Explicit Knowledge
Coefficientsa Unstandardized Coefficients B Std. Error 18.056 2.014 .113 .023 -1.834 .882 14.326 3.678 .158 .043 3.169 4.223 -.061 .051 Standardized Coefficients Beta .405 -.168 .564 .290 -.461 95% Confidence Interval for B Lower Bound Upper Bound 14.071 22.041 .069 .158 -3.580 -.088 7.047 21.604 .073 .243 -5.190 11.528 -.161 .039
Model 1
(Constant) TRCHAR MNCSIZE (Constant) TRCHAR MNCSIZE TRCHAR*MNCSIZE
t 8.967 5.008 -2.079 3.895 3.663 .750 -1.211
Sig. .000 .000 .040 .000 .000 .454 .228
a. Dependent Variable: EXPDEG
Model 1 indicates that TRCHAR was statistically significant (p < 0.001; Beta value = 0.405); and MNCSIZE was also statistically significant (p < 0.05; Beta value = -0.168). Equation 5 below shows that for a 1-point increase in TRCHAR, the EXPDEG is predicted to have a difference by .113, given that the MNCSIZE is held constant. The regression coefficient associated with
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MNCSIZE means that the difference in EXPDEG between large and medium/small MNCs is 1.834, given that TRCHAR is held constant.
Equation 5: EXPDEG = 18.056 + .113TRCHAR - 1.834MNCSIZE
Model 2 shows the results after the product term (TRCHAR*MNCSIZE) was included in the equation. As indicated in Table 2 the inclusion of product term resulted in an R change of .009, [F (1, 124) = 1.467, p > 0.05]. TRCHAR was found statistically significant (p < 0.001; Beta value = 0.564); whereas both MNCSIZE and TRCHAR*MNCSIZE were not statistically significant (both at p > 0.05). The results did not show the presence of a significant moderating effect. Table 4 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 6: EXPDEG = 14.326 + .158TRCHAR + 3.169MNCSIZE - .061TRCHAR*MNCSIZE
The result for Model 2 indicates that for a 1-point increase in the TRCHAR, the EXPDEG is predicted to have a difference by .158, given that MNCSIZE is held constant. The interpretation of the regression coefficients for the product term in Equation 6 is that there was a .158 difference between the slope of EXPDEG on TRCHAR between large MNCs and medium/small MNCs. The slope regressing EXPDEG on TRCHAR is steeper for medium/small MNCs as compared to large MNCs. The TRCHAR and EXPDEG relationship for large and medium/small MNCs is also shown in Figure 1 below. The value of the mean score for TRCHAR is 6.57 and for the standard deviation (SD) is 1.60. The value 1 SD above the mean is 8.17, and the value 1 SD below the mean is 4.97. Thus, using the value of 1 (SD) above and 1 (SD) below mean in Equation 6 yields the graph shown in Figure 1. Results based on Equation 6 led to the conclusion that there was no significant moderating effect of MNCSIZE. Although insignificant, Figure 1 below indicates that the TRCHAR-EXPDEG relationship is slightly stronger (i.e. steeper slope) for medium/small MNCs as compared to large MNCs.
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Figure 1: Slopes for both TCTDEG and EXPDEG on TRCHAR for MNCSIZE
30 25 20 15 10 5 0 -5
Low TCTDEG / EXPDEG (1 SD below mean) medium and small MNCs (TCTDEG) medium and small MNCs (EXPDEG)
High TCTDEG / EXPDEG (1 SD above mean) large MNCs (TCTDEG) large MNCs (EXPDEG)

Building on the underlying KBV and OL perspectives, this study has bridged the literature gaps by providing empirical evidence on the significant moderating effect of size of MNCs on the relationships between technology transfer characteristics (absorptive capacity and recipient collaborativeness) and two dimensions of degree of technology transfer: degrees of tacit and explicit knowledge using the Malaysia sample. The results suggest that, in comparison, the inclusion of MNCSIZE (large vs. medium/small MNCs) in TRCHAR-TCTDEG relationship has a significant moderating effect in changing the degree (volume) of tacit knowledge only (p < 0.001; R- squared change of 0.035) not degree of explicit knowledge (p > 0.05; R- squared change of 0.009). The moderating effect of MNCSIZE is shown to be capable of changing the nature of relationship and explains under what conditions TRCHAR causes TCTDEG. The presence of significant moderating effect of MNCSIZE (large and medium/small MNCs) exceeded the linear relationship between TRCHAR and TCTDEG.
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This is rather interesting given the fact that MNCSIZE received strong theoretical support in the literature (Hagedoorn and Schakenraad, 1994; Glaister and Buckley, 1996; Hoskisson et al., 1994). The results further suggest that MNCSIZE; whether large or medium/small MNCs, has been established to provide a significant moderating impact in TRCHAR- TCTDEG relationship in the JVs. The slopes for TCTDEG on TRCHAR for large and medium/small MNCs (Figure 1) indicated that the relationship appeared to be stronger for medium/small MNCs as compared to large MNCs. The results also provide critical information in such that although transferring tacit knowledge in IJVs requires the recipient partners to have 1) a 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) and 2) the collaborative learning intent; which could encourage more openness and transparency of the supplier partners to share and transfer more technology (Inkpen, 2000), however, 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 degree of tacit knowledge. As compared to medium/small MNCs, although large MNCs are known for having 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 or technology to local partners. This is also because large MNCs have the propensity to regard their JV as one-way learning processes thus having little to share with local partners (Liu and Vince, 1999; Danis and Park, 2002). Since learning in IJVs is asymmetrical, large MNCs tend to perceive learning as solely the task of the knowledge-disadvantaged local partners (Lin, 2005). 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 (Makhija and Ganesh, 1997). Large MNCs typically form JVs as the mechanism towards extracting knowledge and information on local business, economics, and political stability (Sinha, 2001). In this sense, in order to maintain their dominance, large MNCs are reluctant to transfer their technologies to local JV partners instead they are more inclining to protect their proprietary technologies and competencies (Taylor, 1995). On the other hand, although medium/small MNCs in IJVs are more likely to compromise with local partners in terms of 193
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 (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel, 1990). 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 also extend technology transfer literature by establishing that MNCSIZE moderates the relationship between TRCHAR and degree of tacit knowledge transfer. Since the IJV literature has highlighted the high instability rate of IJVs in developing countries, future studies could be directed to empirically examine the moderating effect of size of MNCs on the relationships between degree of inter-firm TT and conflicts, learning outcomes, asymmetric bargaining power, stability of JV, and equity ownership. Finally, future studies could further investigate the effects of few other established moderating variables such as organizational culture, collaborative know-how, prior JV experience, and learning capacity on the above relationships to provide new insights and information on the boundary conditions of technology recipient characteristics-degree of technology transfer relationship.
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11
Age of Joint Venture, Degree of Inter- Firm Technology Transfer and Local Firms Performance.
CHAPTER OUTLINE
Although many studies have acknowledged the significant effect of knowledge transfer on performance outcomes, nevertheless, studies which examine the effects of degree of technology transfer (TTDEG) on both local firms corporate (CPERF) and human resource (HRPERF) performances in inter-firm TT are still scarce. Moreover, the relationships between TTDEG and both CPERF and HRPERF of local firms could possibly be influenced by other established moderating factors such as size of MNCs, age of JV, MNCs country of origin, and MNCs types of industry.
INTRODUCTION When
compared to various forms of strategic alliance such as distribution and supply
agreements, research and development partnerships or technical and management contract, the IJVs are considered as the most efficient formal mechanism for technology transfer (TT) to occur through inter-partner learning between foreign MNCs and local firms (Kogut and Zander, 1993; Inkpen 1998a, 2000). IJVs are also 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). IJVs provide both MNCs and local partners an appropriate avenue 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).
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A review of 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 (for example Lyles and Salk, 1996; Lane et al., 2001; Tsang et al., 2004; Dhanaraj et al., 2004; Steensma and Lyles, 2000). On the other hand, the performance of the MNCs subsidiary and affiliate in the host countries has become the primary focus of intrafirm knowledge transfer literature (for example Chen, 1996; Chung, 2001; Cui et al., 2006; Lin, 2003). Most of the studies on strategic alliance and IJVs have recorded positive relationship between knowledge acquisition or transfer and IJVs performance for example 1) knowledge acquisition has a positive impact on the IJVs human resource, general and business performance (Lyles and Salk, 1996), 2) knowledge acquisition as a better predictor for human-resource related performance than the general and business performance (Lyles and Salk, 1996), 3) knowledge acquisition from parent firms has a significant positive effect on IJVs performance (Lane et al., 2001; Tsang et al., 2004), 4) explicit knowledge acquisition have a positive impact on IJVs performance (Dhanaraj et al., 2004), and 5) tacit knowledge about overseas information was positively related to new product development capacities (Subramaniam and Venkatraman, 2001). In addition, Yin and Bao (2006) found tacit knowledge acquisition had significantly affected local firms performance (LFP). Dhanaraj et al. (2004) found tacit knowledge was negatively related to IJVs performance. As indicated above, although many studies have acknowledged the significant effect of knowledge transfer on performance outcomes, nevertheless, except for Yin and Bao (2006) studies which examine the effects of degree of technology transfer (TTDEG) on both local firms corporate (CPERF) and human resource (HRPERF) performances in inter-firm TT are still scarce. Moreover, the relationships between TTDEG and both CPERF and HRPERF of local firms could possibly have been influenced by other established moderating factors such as size of MNCs, age of JV, MNCs country of origin, and MNCs types of industry. In other words the variations in CPERF and HRPERF could have been significantly influenced or explained by these variables. Thus, this work fills in the literature gaps by specifically examining the effect of age of joint ventures (old vs. young JVs) as a moderating variable in the relationships between degree of technology transfer (TTDEG) and two distinct dimensions of local firms performance (LFP): corporate (CPERF) and human resource (HRPERF) performances. The primary objective
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is to provide new insights and information on the boundary conditions for TTDEG-LFP relationship (Aguinis, 2004).
AGE OF JOINT VENTURE, DEGREE LOCAL FIRMS PERFORMANCE
OF
TECHNOLOGY TRANSFER
AND
The current TT issue in IJVs revolves around the extent of degree of technologies that are transferred (TTDEG) by the suppliers to recipient partners (Pak and Park, 2004; Minbaeva, 2007). The question is no longer whether or not the MNCs are transferring technology to local firms instead the focus in the literature has shifted to questions on 1) the level (sophistication) of the transferred technology, and 2) the stage where the transfer process has reached (Lai and Narayanan, 1997; Narayanan and Lai, 2000). Except for Pak and Park (2004) and Minbaeva (2007), not many studies in both intra and inter-firm TT have focused on TTDEG as independent or dependent variable. In general, bulk of the studies has focused more on technological knowledge and knowledge acquisition per se as the outcomes (dependant variables). For example, the technology transfer, knowledge transfer (KT) and strategic alliance literature have extensively examined the 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, 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., 2004), 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).
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Although the previous researchers have not specifically dealt with TTDEG as a variable, however, a number of studies have operationalized degree (amount) of technology transferred to the recipient firm in terms of the extent of type of technological knowledge that are transferred or acquired for instance 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) 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 (Minbaeva, 2007). In the context of inter-firm technological knowledge transfer in IJVs, only Pak and Park (2004) have directly dealt with degree of knowledge transfer as the outcome (dependent variable) with respect to the transfer of new product development and manufacturing skills/techniques. The TT and KT literature have also acknowledged that a substantial transfer of technology regardless whether tacit or explicit technology will positively 1) lead to a higher potentials of innovation performance/capabilities (Guan et al., 2006; Kotabe et al., 2007)), 2) increase technological capabilities (Kumar et al., 1999; Madanmohan et al., 2004), 3) enhance competitive advantage (Liao and Hu, 2007; Rodriguez and Rodriguez, 2005), 4) enhance organizational learning effectiveness (Inkpen, 2000; Inkpen and Dinur, 1998), 5) improve productivity (Caves, 1974; Liu and Wang, 2003), 6) increase technological development of local industry (Markusen and Venables, 1999), and 7) improve the economic growth of the host country (Blomstrom, 1990). 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 several effects 201
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 mixed results. Few empirical studies on inter-firm knowledge transfer in IJVs find JVAGE is insignificant in relationship between 1) knowledge acquisition-performance 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). Therefore, this study posits as follows: H1: The relationship between degree of inter-firm technology transfer and local firms corporate performance is moderated by age of joint venture. H2: The relationship between degree of inter-firm technology transfer and local firms human resource performance is moderated by age of joint venture.

The sample frame was taken from the IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs operating in Malaysia was 1038. Out of this, 850 IJVs 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 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter. After one month from the posting date the response was found not encouraging. By mid July 2008 there were only 70 responses received from the respondents. 202
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, 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; Sakaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001). From 145 responses only 128 questionnaires were usable and 17 questionnaires were returned blank, returned incomplete, or replied but unable to participate in the study. The main research instrument in this study is the questionnaire. Building on the previous TT and KT studies, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm TT. Except for degree of technology transfer (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 was 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).
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 firm s 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 IJV s top management assessments using a multi-dimensional performance indicators . The CPERF, as 203
the first dimension of LFP, is measured by a four (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). The Cronbach Alphas for CPERF and HRPERF were 0.926 and 0.97 respectively. The results of Cronbach Alpha were well above of Lyles and Salk (1996).

AGE OF JOINT VENTURE (JVAGE)

In measuring JVAGE this study required the respondents to indicate the JV s number of years in operation based on items coded: 0 = old joint ventures (number of years > 10 years) and 1 = young joint ventures (number of years < 10 years) (Tsang et al., 2004; Lin, 2005; Simonin, 1999a; Luo, 2001).
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MODEL AND ANALYSIS

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). Using the MMR analysis, the moderating effect of the variable (product term) was 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 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 , 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, Equation 1 below was used to represent the variables in the ordinary least-squares (OLS) model: Equation 1 (OLS model): Y = 0 + 1X+ 2Z + e
To determine the presence of moderating effect, the OLS model was then compared with the MMR model which was represented by Equation 2 below: Equation 2 (MMR model): Y = 0 + 1X+ 2Z + 3X*Z + e
where, Y = local firms performance (CPERF and HRPERF as the dependent variables), X = degree of technology transfer (TCTDEG and EXPDEG), Z = a hypothesized binary grouping moderator (Age of Joint Venture; old vs. young), X*Z = the product between the predictors (TTDEG*JVAGE), 0 = the intercept of the line-of-best-of-fit which 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, 3 = the sample-base least-squares estimates of the population regression coefficient for the product term, and e = the error term. The moderating variable (product term) is a binary grouping moderator; where the moderating variable JVAGE was coded using the dummy coding system; 0 = old JVs, and 1 = 205
young JVs. This was done because of its simplicity and ease of interpretation of results when making comparisons between different groups (Aguinis, 2004).
RESULTS
Table 1 and Table 2 show the model summary for both corporate (CPERF) and human resource (HRPERF) performances. The coefficients for all variables for Model 1 and Model 2 (for both CPERF and HRPERF) are presented in Table 3 and Table 4 below. Table 1: Model Summary - Corporate Performance
Model Summaryc Change Statistics Model 1 2 R .678 a .701 b R Square .459 .491 Adjusted R Square .451 .479 Std. Error of the Estimate 5.186 5.051 R Square Change .459 .032 F Change 53.060 7.796 df1 2 1 df2 125 124 Sig. F Change .000 .006
a. Predictors: (Constant), TTDEG, JVAGE b. Predictors: (Constant), TTDEG, JVAGE, TTDEG*JVAGE c. Dependent Variable: CPERF
Table 1 above shows that for Model 1, R = .678, R = .459 and [F (2, 125) = 53.186, p = .0001]. This R means that 45.9% of the variance in the CPERF is explained by TTDEG scores and JVAGE. Model 2 shows the results after the product term (CPERF*JVAGE) was included in the equation. Table 1 also indicates that the inclusion of the product term resulted in an R change of .032, [F (1, 124) = 7.796, p < 0.01]. The results support the presence of a moderating effect. To put it differently, the moderating effect of JVAGE explains 3.5% variance in the CPERF above and beyond the variance by TTDEG scores and JVAGE. Thus, it can reasonably be concluded that hypothesis H1 is supported. Table 2: Model Summary - Human Resource Performance
a. Predictors: (Constant), TTDEG, JVAGE b. Predictors: (Constant), TTDEG, JVAGE, TTDEG*JVAGE c. Dependent Variable: HRPERF
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Table 2 above shows that for Model 1, R = .736, R = .541 and [F (2, 125) = 17.831, p = .0001]. This R means that 54.1% of the variance in the HRPERF is explained by TTDEG scores and JVAGE. Model 2 also shows the results after the product term (TTDEG*JVAGE) was included in the equation. Table 2 above indicates that the inclusion of the product term resulted in an R change of .027, [F (1, 124) = 7.662, p < 0.05]. The results also show a presence of significant moderating effect. To put it differently, the moderating effect of JVAGE explains 2.7% variance in the HRPERF above and beyond the variance by TTDEG scores and JVAGE. Thus, it can safely be concluded that hypothesis H2 is supported. The coefficients table for CPERF as shown in Table 3 below depicts the results of the regressions equation for Model 1 and Model 2. Table 3: Coefficients - Corporate Performance
Coefficients a Unstandardized Coefficients Model 1 (Constant) TTDEG JVAGE (Constant) TTDEG JVAGE TTDEG*JVAGE B 10.968 .436 -1.055 4.390 .638 -8.000 -.051 Std. Error 2.493 .046 .964 2.578 .085 2.659 .018 Standardized Coefficients Beta .651 -.075 .953 -.571 -.677 t 3.789 9.455 -1.094 1.703 7.493 -3.009 -2.792 Sig. .000 .000 .276 .091 .000 .003 .006 95% Confidence Interval for B Lower Bound -2.967 .345 -2.964 -.713 .469 -13.262 -.088 Upper Bound 6.902 .527 .853 9.493 .806 -2.738 -.015
a. Dependent Variable: CPERF
Model 1 indicates that TTDEG was statistically significant (p < 0.001; Beta value = 0.651); however JVAGE was not statistically significant (p > 0.05). Equation 3 below shows that for a 1point increase in TTDEG, the CPERF is predicted to have a difference by .436, given that the JVAGE is held constant. The regression coefficient associated with JVAGE means that the difference in CPERF between old and young JVs is -1.055, given that TTDEG is held constant.
Equation 3: CPERF = 1.968 + .436TTDEG - 1.055JVAGE
The high-order of interaction effects of the MMR test was conducted to differentiate the extent of CPERF that was influenced by old and young JVs. Model 2 shows the results after the product term (TTDEG*JVAGE) was included in the equation. As indicated in Table 1 the inclusion of product term resulted in an R change of .032, [F (1, 124) = 7.796, p < 0.01]. Model 2 shows TTDEG are highly significant (p < 0.001; Beta value = .953). Both JVAGE and 207
TTDEG*JVAGE were also found to be significant (p < 0.01; Beta value = -0.571 and p < 0.01; Beta value = -0.677 respectively). The results support the presence of a moderating effect. Table 3 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 4: CPERF = 4.390 + .638TTDEG -8.000JVAGE - .051TTDEG*JVAGE
As indicated above, the interpretation of the regression coefficients is 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 the TTDEG, the CPERF is predicted to have a difference by .638, given that JVAGE is held constant. The interpretation of the regression coefficients for the product term in Equation 4 is that there is a -.051 difference between the slope of CPERF on TTDEG between old and young JVs. In other words, the slope regressing CPERF on TTDEG is steeper for young JVs as compared to old JVs. The TTDEG and CPERF relationship for old and young JVs is shown in Figure 1 below by creating a graph displaying the relationships for each of the groups (Aguinis, 2004). From the results of descriptive statistics, the value of the mean score for TTDEG is 6.19; and for the standard deviation (SD) is 1.30. Following Aguinis (2004), the value 1 SD above the mean is 7.49 and the value 1 SD below the mean is 4.89. Thus, using the value of 1 (SD) above and 1 (SD) below mean in Equation 4 yields the graph shown in Figure 1. Results based on Equation 4 led to the conclusion that there was a moderating effect of JVAGE. Figure 1 below shows that the TTDEG-CPERF relationship is stronger (i.e. steeper slope) for old JVs as compared to young JVs. The coefficients table for HRPERF as shown in Table 4 below depicts the results of the regressions equation for Model 1 and Model 2. Table 4: Coefficients - Human Resource Performance
Coefficients a Unstandardized Coefficients Model 1 (Constant) TTDEG JVAGE (Constant) TTDEG JVAGE TTDEG*JVAGE B 3.338 .422 .215 5.222 .579 -5.186 -.040 Std. Error 1.955 .036 .756 2.023 .067 2.086 .014 Standardized Coefficients Beta .741 .018 1.016 -.435 -.618 t 1.707 11.675 .285 2.582 8.671 -2.486 -2.768 Sig. .090 .000 .776 .011 .000 .014 .007 95% Confidence Interval for B Lower Bound -.531 .351 -1.281 1.218 .447 -9.314 -.069 Upper Bound 7.207 .494 1.712 9.225 .711 -1.057 -.011
a. Dependent Variable: HRPERF
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Model 1 indicates that TTDEG was statistically significant (p < 0.001; Beta value = .741); however JVAGE was not statistically significant (p > 0.05). Equation 5 below shows that for a 1point increase in TTDEG, the HRPERF is predicted to have a difference by .422, given that the JVAGE is held constant. The regression coefficient associated with JVAGE means that the difference in HRPERF between old and young JVs is .215, given that TTDEG is held constant.
Equation 5:
= 3.338 + .422TTDEG + .215JVAGE
Model 2 shows the results after the product term (TTDEG*JVAGE) was included in the equation. As indicated in Table 2 the inclusion of product term resulted in an R change of .027, [F (1, 124) = 7.662, p < 0.05]. TTDEG was found highly significant (p < 0.001; Beta value = 1.016); whereas both JVAGE and TTDEG*JVAGE were also statistically significant (both at p < 0.05, Beta value = -0.435; p < 0.01, Beta value = -0.618). The results show the presence of a significant moderating effect. Table 4 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 6: HRPERF = 5.222 + .579TTDEG - 5.186JVAGE - .040TTDEG*JVAGE
The result for Model 2 indicates that for a 1-point increase in the TTDEG, the HRPERF is predicted to have a difference by .579, given that JVAGE is held constant. The interpretation of the regression coefficients for the product term in Equation 6 is that there was a -.040 difference between the slope of HRPERF on TTDEG between old and young JVs. The slope regressing HRPERF on TTDEG is steeper for young JVs as compared to old JVs. The TTDEG and HRPERF relationship for old and young JVs is also shown in Figure 1 below. The value of the mean score for TTDEG is 6.19 and for the standard deviation (SD) is 1.30. The value 1 SD above the mean is 7.49, and the value 1 SD below the mean is 4.89. Thus, using the value of 1 (SD) above and 1 (SD) below mean in Equation 6 yields the graph shown in Figure 1. Results based on Equation 6 led to the conclusion that there was also a significant moderating effect of JVAGE. Figure 1 below indicates that the TTDEG-HRPERF relationship is slightly stronger (i.e. steeper slope) for old JVs as compared to young JVs.
209
Figure 1: Slopes for both CPERF and HRPERF on TTDEG for JVAGE
30 25 20 15 10 5 0 -5
Low CPERF / HRPERF (1 SD below mean) Young JVs (CPERF) Young JVs (HRPERF)
High CPERF / HRPERF (1 SD above mean) Old JVs (CPERF) Old JVs (HRPERF)

Building on the underlying KBV and OL perspectives, this study has bridged the literature gaps by providing empirical evidence on the significant moderating effects of age of joint ventures on the relationships between degree of inter-firm technology transfer (degrees of tacit and explicit knowledge) and two dimensions of local firms performance: corporate and human resource performances using the Malaysia sample. The results suggest that, in comparison, the inclusion of JVAGE (old and young JVs) in TTDEG-LFP relationship has a significant moderating effect in changing the local firms corporate performance (CPERF) (p < 0.01; R- squared change of 0.032) and the local firms human resource performance (HRPERF) (p < 0.05; R- squared change of 0.027). The moderating effect of JVAGE is shown to be capable of changing the nature of relationship and further explains under what conditions TTDEG causes CPERF and HRPERF. The presence of significant moderating effect of JVAGE (old and young JVs) exceeded the linear relationship between TTDEG and both CPERF and HRPERF. The result are
210
consistent with recent literature which has strongly supported the significant role of JVAGE (Foss and Pedersen, 2002; Kale et al., 2000; Tsang et al., 2004; Simonin, 2004). The results also suggest that JVAGE; whether old or young JVs, has been established to provide a significant moderating impact in TTDEG-CPERF and TTDEG-HRPERF relationships in the JVs; where the relationships are stronger for old JVs as compared to young JVs. The results provide critical information in such that although a successful technology transfer in IJVs; which includes the transfer of substantial tacit and explicit knowledge could have significantly increased 1) the corporate performance in terms the local firms business volume, market share, planned goals and profits, and 2) the human resource performance in terms of local firms product/service quality, employees productivity, managerial techniques/skills and
operational efficiency, nevertheless, since the technologies which are transferred to local firms mostly originated from the sophisticated and competitive foreign MNCs, the propensity of increasing both CPERF and HRPERF is unlikely to maximize the local firms performance. This is simply because although a longer period of collaborative relationship in JVs could escalate the opportunity to share, learn, and transfer technologies between JV partners; which is resulted from the decrease of cultural distances, increase of inter-partner trust and personal attachment between partners (Gulati 1995; Yan and Gray, 1994), however, the formation of alliances and JVs have frequently been perceived as a race to learn and are closely associated with JVs instability. 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 (Inkpen and Beamish, 1997). 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 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 (Child and Falkner, 1998; Khanna et al., 1998; Hamel, 1991). In this circumstance, as technology flows are strictly restricted and controlled, even if technologies are intentionally transferred, their effects on local firms performance could be very nominal. The results are explicitly consistent 211
with Dhanaraj et al. s (2004) who reasoned that tacit knowledge could negatively affected IJVs performance because 1) tacit knowledge has lagged relationship with IJVs performance (Lyles and Salk, 1996), 2) the foreign tacit knowledge needs to be adapted to the IJVs and current environment (Martin and Solomon, 2003a, b), and 3) learning and utilizing tacit knowledge utilization are interdependent but distinct (Lane et al., 2001).
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12
MNCs Country of Origin, Degree of Inter-Firm Technology Transfer and Firms Performance
CHAPTER OUTLINE
This work fills in the literature gaps by specifically examining the effect of MNCs country of origin (Western vs. Asian MNCs) as a moderating variable in the relationships between degree of technology transfer (TTDEG) and two distinct dimensions of local firms performance (LFP): corporate (CPERF) and human resource (HRPERF) performances. The primary objective is to provide new insights and information on the boundary conditions for TTDEG-LFP relationship.
INTRODUCTION When
compared to various forms of strategic alliance such as distribution and supply
agreements, research and development partnerships or technical and management contract, the international joint ventures (IJVs) are considered as the most efficient formal mechanism for technology transfer (TT) to occur via inter-partner learning between foreign MNCs and local firms (Kogut and Zander, 1993; Inkpen 1998a, 2000). IJVs are also viewed as the most efficient mode to transfer technology and knowledge which are organizationally embedded and difficult to transfer through licensing agreements (Kogut, 1988; Mowery, Oxley and Silverman, 1996). IJVs provide both MNCs and local partners an appropriate avenue 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).
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A review of literature reveals that majority of empirical studies on inter-firm technology and knowledge transfer in strategic alliance particularly IJVs are limiting their focus on the performance of the IJVs (for example Lyles and Salk, 1996; Lane et al., 2001; Tsang et al., 2004; Dhanaraj et al., 2004; Steensma and Lyles, 2000). On the other hand, the performance of the MNCs subsidiary and affiliate in the host countries has become the primary focus of intrafirm knowledge transfer literature (for example Chen, 1996; Chung, 2001; Cui et al., 2006; Lin, 2003). Most of the studies on strategic alliance and IJVs have recorded positive relationship between knowledge acquisition or transfer and IJVs performance for example 1) knowledge acquisition has a positive impact on the IJVs human resource, general and business performance (Lyles and Salk, 1996), 2) knowledge acquisition as a better predictor for human-resource related performance than the general and business performance (Lyles and Salk, 1996), 3) knowledge acquisition from parent firms has a significant positive effect on IJVs performance (Lane et al., 2001; Tsang et al., 2004), 4) explicit knowledge acquisition have a positive impact on IJVs performance (Dhanaraj et al., 2004), and 5) tacit knowledge about overseas information was positively related to new product development capacities (Subramaniam and Venkatraman, 2001). In addition, Yin and Bao (2006) found tacit knowledge acquisition had significantly affected local firms performance (LFP). Interestingly, Dhanaraj et al. (2004) found tacit knowledge was negatively related to IJVs performance. As indicated above, although many studies have acknowledged the significant effect of knowledge transfer on performance outcomes, nevertheless except for Yin and Bao (2006), studies which examine the effects of degree of technology transfer (TTDEG) on both local firms corporate (CPERF) and human resource (HRPERF) performances in inter-firm TT are still scarce. Moreover, the relationships between TTDEG and both CPERF and HRPERF of local firms could possibly be influenced by other established moderating factors such as size of MNCs, age of JV, MNCs country of origin, and MNCs types of industry. In other words the variations in CPERF and HRPERF could have been significantly influenced or explained by these variables. Thus, this work fills in the literature gaps by specifically examining the effect of MNCs country of origin (Western vs. Asian MNCs) as a moderating variable in the relationships between degree of technology transfer (TTDEG) and two distinct dimensions of local firms performance (LFP): corporate (CPERF) and human resource (HRPERF)
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performances. The primary objective is to provide new insights and information on the boundary conditions for TTDEG-LFP relationship (Aguinis, 2004).
DEGREE OF TECHNOLOGY TRANSFER, FIRMS PERFORMANCE AND MNCs COUNTRY OF ORIGIN

The current TT issue in developing countries revolves around the extent of degree of technologies that are transferred (TTDEG) by the suppliers to recipient partners (Pak and Park, 2004; Minbaeva, 2007). The question is no longer whether or not the MNCs are transferring technology to local firms; instead the focus in the literature has shifted to questions on 1) the level (sophistication) of the transferred technology, and 2) the stage where the transfer process has reached (Lai and Narayanan, 1997; Narayanan and Lai, 2000). Except for Pak and Park (2004) and Minbaeva (2007), not many studies in both intra and inter-firm TT have focused on TTDEG as independent or dependent variable. In general, bulk of the studies has focused more on technological knowledge and knowledge acquisition per se as the outcomes (dependant variables). For example, the technology transfer, knowledge transfer (KT) and strategic alliance literature have extensively examined the 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, 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., 2004), 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).
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Although the previous researchers have not specifically dealt with TTDEG as a variable, however, a number of studies have operationalized degree (amount) of technology transferred to the recipient firm in terms of the extent of type of technological knowledge that are transferred or acquired for instance 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; Liu and Vince, 1999; Lin, 2005), 9) 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 (Minbaeva, 2007). In the context of inter-firm technological knowledge transfer in IJVs, only Pak and Park (2004) have directly dealt with degree of knowledge transfer as the outcome (dependent variable) with respect to the transfer of new product development and manufacturing skills/techniques. The inter-firm TT and KT literature have also acknowledged that a substantial transfer of technology regardless whether tacit or explicit technology will positively 1) lead to a higher potentials of innovation performance/capabilities (Guan et al., 2006; Kotabe et al., 2007)), 2) increase technological capabilities (Kumar et al., 1999; Madanmohan et al., 2004), 3) enhance organizations competitive advantage (Liao and Hu, 2007; Rodriguez and Rodriguez, 2005), 4) enhance organizational learning effectiveness (Inkpen, 2000; Inkpen and Dinur, 1998), 5) improve productivity (Caves, 1974; Liu and Wang, 2003), 6) increase technological development of local industry (Markusen and Venables, 1999), and 7) improve the economic growth of the host country (Blomstrom, 1990). Many empirical studies have established that MNCCOO (nationality) has a significant impact on 1) the propensities of MNCs choice of global strategies, 2) organizational structures and control system (Bartlett and Ghoshal, 1989), 3) internal corporate cultures (Egelhoff, 1984; Porter, 1985), 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 the MNCs operate (Gupta and Govindarajan, 2000). Problems related to cultural differences, opinions, beliefs, and attitude tend to accelerate due to alliance/JV partners 219
nationality (Kale et al., 2000). The differences in culture, language, educational background and distance with cross national partners; which act as barriers to inter-organizational learning, impede the inter-partner learning and knowledge transfer (Mowery et al. 1996). However, Yin and Bao (2006) found nationality of alliance s partners (the U.S, Japan and Western firms) has no significant effect on the relationships between the supplier and recipient factors and tacit knowledge acquisition. H1: The relationship between degree of technology transfer and local firms corporate performance is moderated by the MNCs country of origin. H2: The relationship between degree of technology transfer and local firms human resource performance is moderated by the MNCs country of origin.

The sample frame was taken from the IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs operating in Malaysia was 1038. Out of this, 850 IJVs 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 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC using a cover letter. After one month from the posting date the response was found not encouraging. By mid July 2008 there were only 70 responses 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 220
survey. After intensive efforts were made, 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 (Sekaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001). From 145 responses only 128 questionnaires were usable and 17 questionnaires were returned blank, returned incomplete, or replied but unable to participate in the study. The main research instrument in this study is the questionnaire. Building on the previous TT and KT studies, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm TT. Except for degree of technology transfer (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 was 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).
LOCAL FIRMS PERFORMANCE

This study operationalizes local firms performance (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 firm s performance (Lyles and Salk, 1996; Dess and Robinson, 1984; Geringer and Hebert, 1989, 1991). Thus, this study applies subjective measures 221
to measure LFP based on IJV s top management assessments using
a multi-dimensional
performance indicators . The CPERF, as the first dimension of LFP, is measured by a four (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). The Cronbach Alphas for CPERF and HRPERF were 0.926 and 0.97 respectively. The results of Cronbach Alpha were well above of Lyles and Salk (1996).

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
222
MNCs COUNTRY OF ORIGIN (MNCCOO)

Following the previous studies (Yin and Bao, 2006; Mowery et al., 1996; Kale et al., 2000), MNCCOO is measured by the nationality of the MNCs foreign JV partners based on item coded: 0 = Western MNCs (Unites States and European countries) and 1 = Asian MNCs (Japan and other Asian countries).
MODEL AND ANALYSIS

The moderated multiple regression (MMR) analysis is defined 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). Using the MMR analysis, the moderating effect of the variable (product term) was 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 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 , 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, Equation 1 below was used to represent the variables in the ordinary least-squares (OLS) model: Equation 1 (OLS model): Y = 0 + 1X+ 2Z + e
where, Y = local firms performance (CPERF and HRPERF as the dependent variables), X = degree of technology transfer (TCTDEG and EXPDEG), Z = a hypothesized binary grouping 223
moderator (MNCCOO; Western vs. Asian MNCs), X*Z = the product between the predictors (TTDEG*MNCCOO), 0 = the intercept of the line-of-best-of-fit which 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, 3 = the sample-base least-squares estimates of the population regression coefficient for the product term, and e = the error term. The moderating variable (product term) is a binary grouping moderator; where the moderating variable MNCCOO was coded using the dummy coding system; 0 = Western MNCs, and 1 = Asian MNCs. This was done because of its simplicity and ease of interpretation of results when making comparisons between different groups (Aguinis, 2004).
RESULTS
a. Predictors: (Constant), MNCCOO, TTDEG b. Predictors: (Constant), MNCCOO, TTDEG, TTDEG*MNCCOO c. Dependent Variable: CPERF
Table 1 above shows that for Model 1, R = .695, R = .482 and [F (2, 125) = 58.257, p = .0001]. This R means that 48.2% of the variance in the CPERF is explained by TTDEG scores and MNCCOO. Model 2 shows the results after the product term (TTDEG*MNCCOO) was included in the equation. Table 1 also indicates that the inclusion of the product term resulted in an R change of .018, [F (1, 124) = 7.796, p < 0.05]. The results support for the small presence of a significant moderating effect. To put it differently, the moderating effect of MNCCOO explains
224
1.8% variance in the CPERF above and beyond the variance by TTDEG scores and MNCCOO. Thus, it can reasonably be concluded that hypothesis H1 is supported. Table 2: Model Summary - Human Resource Performance
a. Predictors: (Constant), MNCCOO, TTDEG b. Predictors: (Constant), MNCCOO, TTDEG, TTDEG*MNCCOO c. Dependent Variable: HRPERF
Table 2 above shows that for Model 1, R = .772, R = .596 and [F (2, 125) = 92.373, p = .0001]. This R means that 59.6% of the variance in the HRPERF is explained by TTDEG scores and MNCCOO. Model 2 shows the results after the product term (TTDEG*MNCCOO) was included in the equation. Table 1 also indicates that the inclusion of the product term resulted in an R change of only .008, [F (1, 124) = 2.644, p > 0.05]. The results show no significant presence of moderating effect. To put it differently, the moderating effect of MNCCOO explains only 0.8% variance in the HRPERF above and beyond the variance by TTDEG scores and MNCCOO. Thus, it can safely be concluded that hypothesis H2 is not supported. The coefficients table for CPERF as shown in Table 3 below depicts the results of the regressions equation for Model 1 and Model 2. Table 3: Coefficients - Corporate Performance
Coefficientsa Unstandardized Coefficients B Std. Error .889 2.182 .428 .044 2.442 .932 -2.370 2.653 .496 .054 12.042 4.661 -.190 .090 Standardized Coefficients Beta .640 .172 .741 .849 -.716 95% Confidence Interval for B Lower Bound Upper Bound -3.428 5.207 .341 .515 .599 4.286 -7.621 2.881 .389 .603 2.817 21.268 -.369 -.011
Model 1
t .408 9.741 2.622 -.893 9.165 2.584 -2.101
(Constant) TTDEG MNCCOO (Constant) TTDEG MNCCOO TTDEG*MNCCOO
Sig. .684 .000 .010 .373 .000 .011 .038
Model 1 indicates that TTDEG was statistically significant (p < 0.001; Beta value = .640); and MNCCOO was also statistically significant (p < 0.01). Equation 3 below shows that for a 1-point 225
increase in TTDEG, the CPERF is predicted to have a difference by .428, given that the MNCCOO is held constant. The regression coefficient associated with MNCCOO means that the difference in CPERF between Western and Asian MNCs is 2.442, given that TTDEG is held constant.
Equation 3: CPERF = .889 + .428TTDEG + 2.442MNCCOO
The high-order of interaction effects of the MMR test was conducted to differentiate the extent of CPERF that was influenced by Western and Asian MNCs. Model 2 shows the results after the product term (TTDEG*MNCCOO) was included in the equation. As indicated in Table 1 the inclusion of product term resulted in an R change of .018, [F (1, 124) = 7.796, p < 0.05]. Model 2 shows TTDEG, MNCCOO and TTDEG*MNCCOO were significant (p < 0.001, Beta value = .741; p < 0.01, Beta value = .849; p < 0.05, Beta value = -.716, respectively). The results did support for the presence of a significant moderating effect. Table 3 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 4: CPERF = -2.370 + .496TTDEG + 12.042MNCCOO - .190TTDEG*MNCCOO
As indicated above, the interpretation of the regression coefficients is 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 the TTDEG, the CPERF is predicted to have a difference by .496, given that MNCCOO is held constant. The interpretation of the regression coefficients for the product term in Equation 4 is that there is a -.190 difference between the slope of CPERF on TTDEG between Western and Asian MNCs. In other words, the slope regressing CPERF on TTDEG is steeper for Asian MNCs as compared to Western MNCs. The TTDEG and CPERF relationship for Western and Asian MNCs is shown in Figure 1 below by creating a graph displaying the relationships for each of the groups (Aguinis, 2004). From the results of descriptive statistics, the value of the mean score for TTDEG is 6.19; and for the standard deviation (SD) is 1.30. Following Aguinis (2004), the value 1 SD above the mean is 7.49 and the value 1 SD below the mean is 4.89. Thus, using the value of 1 SD above and 1 SD below mean in Equation 4 yields the 226
graph shown in Figure 1. Results based on Equation 4 led to the conclusion that there was no significant moderating effect of MNCCOO. Figure 1 below shows that the TTDEG-CPERF relationship is stronger (i.e. steeper slope) for Asian MNCs as compared to Western MNCs. The coefficients table for HRPERF as shown in Table 4 below depicts the results of the regressions equation for Model 1 and Model 2. Table 4: Coefficients - Human Resource Performance
Coefficients a Unstandardized Coefficients B Std. Error 3.757 1.640 .392 .033 2.906 .700 1.848 2.008 .432 .041 8.530 3.528 -.111 .068 Standardized Coefficients Beta .688 .241 .758 .706 -.493 95% Confidence Interval for B Lower Bound Upper Bound .512 7.002 .326 .457 1.520 4.292 -2.127 5.823 .351 .513 1.547 15.513 -.247 .024
Model 1
(Constant) TTDEG MNCCOO (Constant) TTDEG MNCCOO TTDEG*MNCCOO
t 2.291 11.860 4.150 .920 10.534 2.418 -1.626
Sig. .024 .000 .000 .359 .000 .017 .106
Model 1 indicates that both TTDEG and MNCCOO were statistically significant (p < 0.001; Beta value = .688; p < 0.001, Beta value = .241, respectively); Equation 5 below shows that for a 1point increase in TTDEG, the HRPERF is predicted to have a difference by .392, given that the MNCCOO is held constant. The regression coefficient associated with MNCCOO means that the difference in HRPERF between Western and Asian MNCs is 2.906, given that TTDEG is held constant.
Equation 5:
= 3.757 + .392TTDEG + 2.906MNCCOO
Model 2 shows the results after the product term (TTDEG*MNCCOO) was included in the equation. As indicated in Table 2 the inclusion of product term resulted in an R change of .008, [F (1, 124) = 2.644, p > 0.05]. TTDEG and MNCCOO were found significant (p < 0.001, Beta value = .758; p < 0.01, Beta value = .706, respectively). However, TTDEG*MNCCOO was found insignificant (p > 0.05). The results show there was no presence of a significant moderating effect. Table 4 also reveals information on the regression coefficients after the inclusion of product term in the equation. The equation for Model 2 is as follows:
227
Equation 6: HRPERF = 1.848 + .432TTDEG + 8.530MNCCOO - .111TTDEG*MNCCOO
The result for Model 2 indicates that for a 1-point increase in the TTDEG, the HRPERF is predicted to have a difference by .432, given that MNCCOO is held constant. The interpretation of the regression coefficients for the product term in Equation 6 is that there was a -.111 difference between the slope of HRPERF on TTDEG between Western and Asian MNCs. The slope regressing HRPERF on TTDEG is steeper for Asian MNCs as compared to Western MNCs. The TTDEG-HRPERF relationship for Western and Asian MNCs is also shown in Figure 1 below. The value of the mean score for TTDEG is 6.19 and for the standard deviation (SD) is 1.30. The value 1 SD above the mean is 7.49, and the value 1 SD below the mean is 4.89. Thus, using the value of 1 SD above and 1 SD below mean in Equation 6 yields the graph shown in Figure 1. Results based on Equation 6 led to the conclusion that there was no significant moderating effect of MNCCOO. Although insignificant, Figure 1 below indicates that the TTDEG-HRPERF relationship is stronger (i.e. steeper slope) for Asian MNCs as compared to Western MNCs. Figure 1: Slopes for both CPERF and HRPERF on TTDEG for MNCCOO
30 25 20 15 10 5 0 -5
Low CPERF/ HRPERF (1 SD below mean) Asian MNCs (CPERF) Asian MNCs (HRPERF)
High CPERF / HRPERF (1 SD above mean) Western MNCs (CPERF) Western MNCs (HRPERF)
228

Building on the underlying KBV and OL perspectives, this study has bridged the literature gaps by providing empirical evidence and new insights on the significant moderating effects of MNCs country of origin in the relationships between degree of inter-firm technology transfer and two dimensions of local firms performance: corporate and human resource performances using the Malaysia sample. In comparison, the results clearly suggest that the inclusion of MNCCOO (Western vs. Asian MNCs) in TTDEG-LFP relationship has significant moderating effects in changing only the local firms corporate performance (CPERF) (p < 0.05; R- squared change of 0.018) not human resource performance (HRPERF) (p > 0.05). The moderating effect of MNCCOO is shown to be capable of changing the nature of relationship and further explains under what conditions TTDEG causes CPERF. This means the presence of significant moderating effect of MNCCOO (Western and Asian MNCs) exceeded the linear relationship between TTDEG and CPERF. The results are consistent with literature which has strongly supported for the significant role of MNCs size (Bartlett and Ghoshal, 1989; Egelhoff, 1984; Porter, 1985). The results also suggest that MNCCOO; whether Western or Asian MNCs has been established to provide a significant moderating impact in TTDEG-HRPERF relationship in the IJVs; where the relationship was found stronger for Asian MNCs as compared to Western MNCs. The results further provide critical information in such that although a successful technology transfer in IJVs; which includes the transfer of substantial tacit and explicit knowledge could have significantly increased the corporate performance (CPERF) in terms of local firms business volume, market share, planned goals and profits, nevertheless, since the technologies which are transferred to local firms mostly originated from the sophisticated and competitive foreign MNCs, the outcome of the inter-firm technology transfer does not necessarily help to improve local firms corporate performance. The plausible reason is that, due to cultural differences (distances), attitudes towards outsiders (clannishness) and the fact that knowledge in Oriental cultures is more contextual than Western cultures, Asian MNCs in IJVs are relatively more protective of their technologies and knowledge as compared to Western MNCs; which are quite transparent and more open in facilitating knowledge assimilation and acquisition (Hamel, 1991). Since inter-firm technology transfer in IJVs is an organizational learning process 229
(Daghfous, 2004), the recipient partners absorptive capacity, intensity of effort and collaborative learning intent are not the only preconditions for a successful technology acquisition (Hamel, 1991). 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, their effects on local firms corporate performance could be very nominal. 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 (Liu and Vince, 1999; Danis and Parkhe, 2002). Since learning in IJVs is asymmetrical, Western MNCs view technological learning as solely the task of the knowledge-disadvantaged local partners (Lin, 2005). 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 (Porter, 1985; Barney, 1991; Peteraf, 1993; Wernerfelt, 1984; Pralahad and Hamel, 1990). The results further extend the empirical findings by Hamel (1991) who found Japanese JV partners were relatively less transparent in inter-firm organizational learning and knowledge transfer when compared to Western JV partners.
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13
MNCs Equity Ownership, Degree of Technology Transfer and Firms Performance
CHAPTER OUTLINE
Since the focus of inter-firm TT in developing countries has shifted to degree of technology transfer, organizations in developing countries are attempting to assess not only the significant role of technology transfer in strengthening their corporate and human resource performance but also the influence of other critical variables such as MNCs size, age of JVs, country of origin, MNCs equity ownership (MNCEQTY) and MNC s type of industries that could significantly moderate the relationship. This work fills in the literature gaps by specifically examining the effect of equity ownership of MNCs (50/50 equal ownership between MNCs and local JV partners vs. minor/majority ownership by MNCs) as a moderating variable in the relationships between degree of technology transfer (TTDEG) and two distinct dimensions of local firms performances. performance (LFP): corporate (CPERF) and human resource (HRPERF)
INTRODUCTION A review of literature reveals that

majority of empirical studies on inter-firm technology and
knowledge transfer in strategic alliance particularly IJVs are limiting their focus on the performance of the IJVs (for example Lyles and Salk, 1996; Lane et al., 2001; Tsang et al., 2004; Dhanaraj et al., 2004; Steensma and Lyles, 2000). On the other hand, the performance of the MNCs subsidiary and affiliate in the host countries has become the primary focus of intrafirm knowledge transfer literature (for example Chen, 1996; Chung, 2001; Cui et al., 2006; Lin, 2007). Most of the studies on strategic alliance and IJVs have recorded positive relationship between knowledge acquisition or transfer and IJVs performance for example 1) knowledge 235
acquisition has a positive impact on the IJVs human resource, general and business performance (Lyles and Salk, 1996), 2) knowledge acquisition as a better predictor for human-resource related performance than the general and business performance (Lyles and Salk, 1996), 3) knowledge acquisition from parent firms has a significant positive effect on IJVs performance (Lane et al., 2001; Tsang et al., 2004), 4) explicit knowledge acquisition have a positive impact on IJVs performance (Dhanaraj et al., 2004), and 5) tacit knowledge about overseas information was positively related to new product development capacities (Subramaniam and Venkatraman, 2001). In addition, Yin and Bao (2006) found tacit knowledge acquisition had significantly affected local firms performance (LFP). Interestingly, Dhanaraj et al. (2004) found tacit knowledge was negatively related to IJVs performance. As indicated above, although many studies have acknowledged the significant effect of knowledge transfer on performance outcomes, nevertheless except for Yin and Bao (2006), studies which examine the effects of degree of technology transfer (TTDEG) on both local firms corporate (CPERF) and human resource (HRPERF) performances in inter-firm TT are still scarce. Moreover, the relationships between TTDEG and both CPERF and HRPERF of local firms could possibly be influenced by other established moderating factors such as size of MNCs, age of JV, MNCs country of origin, MNCs equity ownership, and MNCs types of industry. In other words the variations in CPERF and HRPERF could have been significantly influenced or explained by these variables. Thus, this study fills in the literature gaps by specifically examining the effect of equity ownership of MNCs (50/50 equal ownership between MNCs and local JV partners vs. minor/majority ownership by MNCs) as a moderating variable in the relationships between degree of technology transfer (TTDEG) and two distinct dimensions of local firms performance (LFP): corporate (CPERF) and human resource (HRPERF) performances. The primary objective is to provide new insights and information on the boundary conditions for TTDEG-LFP relationship (Aguinis, 2004).
EQUITY OWNERSHIP, DEGREE FIRMS PERFORMANCE
OF
TECHNOLOGY TRANSFER
AND
LOCAL
The current TT issue in developing countries revolves around the extent of degree of technologies that are transferred (TTDEG) by the suppliers to recipient partners (Pak and Park,
236
2004; Minbaeva, 2007). The question is no longer whether or not the MNCs are transferring technology to local firms; instead the focus in the literature has shifted to questions on 1) the level (sophistication) of the transferred technology, and 2) the stage where the transfer process has reached (Lai and Narayanan, 1997; Narayanan and Lai, 2000). Except for Pak and Park (2004) and Minbaeva (2007), not many studies in both intra and inter-firm TT have focused on TTDEG as independent or dependent variable. In general, bulk of the studies has focused more on technological knowledge and knowledge acquisition per se as the outcomes (dependant variables). For example, the technology transfer, knowledge transfer (KT) and strategic alliance literature have extensively examined the 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, 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., 2004), 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). Although the previous researchers have not specifically dealt with TTDEG as a variable, however, a number of studies have operationalized degree (amount) of technology transferred to the recipient firm in terms of the extent of type of technological knowledge that are transferred or acquired for instance 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) managerial skills (Wong et al., 237
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 (Minbaeva, 2007). In the context of inter-firm technological knowledge transfer in IJVs, only Pak and Park (2004) have directly dealt with degree of knowledge transfer as the outcome (dependent variable) with respect to the transfer of new product development and manufacturing skills/techniques. The inter-firm TT and KT literature have also acknowledged that a substantial transfer of technology regardless whether tacit or explicit technology will positively 1) lead to a higher potentials of innovation performance/capabilities (Guan et al., 2006; Kotabe et al., 2007), 2) increase technological capabilities (Kumar et al., 1999; Madanmohan et al., 2004), 3) enhance organizations competitive advantage (Liao and Hu, 2007; Rodriguez and Rodriguez, 2005), 4) enhance organizational learning effectiveness (Inkpen, 2000; Inkpen and Dinur, 1998), 5) improve productivity (Caves, 1974; Liu and Wang, 2003), 6) increase technological development of local industry (Markusen and Venables, 1999), and 7) improve the economic growth of the host country (Blomstrom, 1990). Both knowledge acquisition and knowledge transfer literatures have argued that equity ownership in IJVs, particularly shared management IJVs; where the partners equity/share is split 50/50 between IJV partners, could significantly affect the success of knowledge acquisition in IJVs when 1) appropriate controls can facilitate the organizational learning process by managing the dynamic internal processes of IJVs such as a balanced bargaining power and different needconfigurations of partners (Makhija and Ganesh, 1997), 2) equity ownership enables the JV partners to interact and communicate easily thus creating opportunities to share and easy access to each partner s technologies, knowledge and competencies (Pak and Park, 2004), 3) shared management IJVs provides a strong strategic rationale of transferring and acquiring knowledge and skills of both partners (Salk, 1992), 4) acquiring tacit knowledge from a JV partner is less difficult through shared management as compared to simple contract-based relationship (Mowery et al., 1996), and 5) it determines the degree of resource commitment or equity interests as control is closely associated with the partners ability to influence systems, methods, and decisions (Anderson and Gatignon, 1986). Nevertheless, few other researchers have also stressed that if no single partner has dominant controls in IJVs, the 50/50 ownership structure could also 1) escalate difficulties when cultural differences are present (Killing, 1983), and 2) 238
create parental tensions (Killing, 1983; Salk, 1992). Pak and Park (2004) further argued that even if the local JV partners were to have 49% equity in IJVs that does not guarantee them to have higher influence in making decision related to major business operations; which include learning and acquiring new knowledge. On the other hand, quite often, a dominant equity ownership (more than 50% equity ownership) by local JV partners will only discourage higher resource commitment by foreign MNCs thus reducing the possibility for a higher technological knowledge transfer to local JV partners (Pak and Park, 2004). Studies have shown that equity ownership structure in IJVs has moderated 1) the relationships between cultural misunderstandings and written goal and knowledge acquisition from foreign parents (Lyles and Salk, 1996), and 2) articulated goal (Harrigan, 1986; Salk, 1992). H1: The equity ownership of MNCs moderates the relationship between degree of inter-firm technology transfer and local firms corporate performance. H2: The equity ownership of MNCs moderates the relationship between degree of inter-firm technology transfer and local firms human resource performance.

The sample frame was taken from the IJV companies registered with the Registrar of Companies (ROC). As at 1st January 2008, the number of IJVs operating in Malaysia was 1038. Out of this, 850 IJVs 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 IJVs were further eliminated from the population frame because only IJVs that have operated more than 2 years and have at least twenty percent (20%) of foreign 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, it was 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 self-administered questionnaire. The questionnaires were mailed to 850 active JV companies as listed with ROC 239
using a cover letter. After one month from the posting date the response was found not encouraging. By mid July 2008 there were only 70 responses 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, 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 (Sekaran, 2003). In the Malaysian context, however, a response rate of 15% to 25% is still being considered appropriate and acceptable (Mohammed, 1998; Rozhan, Rohayu and Rasidah, 2001). From 145 responses only 128 questionnaires were usable and 17 questionnaires were returned blank, returned incomplete, or replied but unable to participate in the study.

The main research instrument in this study is the questionnaire. Building on the previous TT and KT studies, the questionnaire adopts a multi-item scales which have been modified accordingly to suit the context of the study: inter-firm TT. Except for degree of technology transfer (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 was 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).
LOCAL FIRMS PERFORMANCE

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 240
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 firm s 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 IJV s top management assessments using a multi-dimensional performance indicators . The CPERF, as the first dimension of LFP, is measured by a four (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). The Cronbach Alphas for CPERF and HRPERF were 0.926 and 0.97 respectively. The results of Cronbach Alpha were well above of Lyles and Salk (1996).

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
241
EQUITY OWNERSHIP OF MNCs

Following the previous studies (Lyles and Salk, 1996; Pak and Park, 2004), MNCEQTY is measured by the ownership structure of the JVs companies that were registered with ROC based on items coded: 0 = 50/50 equal ownership between MNCs and local JV partners and 1 = minor/majority ownership by MNCs (Yin and Bao, 2006).
MODEL AND ANALYSIS

The moderated multiple regression (MMR) analysis is defined 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). Using the MMR analysis, the moderating effect of the variable (product term) was 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 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 , 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, Equation 1 below was used to represent the variables in the ordinary least-squares (OLS) model: Equation 1 (OLS model): Y = 0 + 1X+ 2Z + e
where, Y = local firms performance (CPERF and HRPERF as the dependent variables), X = degree of technology transfer, Z = a hypothesized binary grouping moderator (MNCEQTY: 50/50 242
equal ownership between MNCs and local JV partners vs. minor/majority ownership by MNCs), X*Z = the product between the predictors (TTDEG*MNCEQTY), 0 = the intercept of the line-ofbest-of-fit which 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, 3 = the sample-base least-squares estimates of the population regression coefficient for the product term, and e = the error term. The moderating variable (product term) is a binary grouping moderator; where the moderating variable MNCEQTY was coded using the dummy coding system; 0 = 50/50 equal ownership between JV partners and 1 = minor/majority ownership by MNCs. This was done because of its simplicity and ease of interpretation of results when making comparisons between different groups (Aguinis, 2004).
RESULTS
a. Predictors: (Constant), MNCEQTY, TTDEG b. Predictors: (Constant), MNCEQTY, TTDEG, TTDEG*MNCEQTY c. Dependent Variable: CPERF
Table 1 above shows that for Model 1, R = .674, R = .455 and [F (2, 125) = 52.137, p = .0001]. This R means that 45.5% of the variance in the CPERF is explained by TTDEG scores and MNCEQTY. Model 2 shows the results after the product term (TTDEG*MNCEQTY) was included in the equation. Table 1 also indicates that the inclusion of the product term resulted in an R change of .013, [F (1, 124) = 3.072, p < 0.10]. The results support for the presence of a small 243
significant moderating effect. To put it differently, the moderating effect of MNCEQTY explains only 1.3% variance in the CPERF above and beyond the variance by TTDEG scores and MNCEQTY. Thus, it can reasonably be concluded that hypothesis H1 is supported. Table 2: Model Summary - Human Resource Performance
a. Predictors: (Constant), MNCEQTY, TTDEG b. Predictors: (Constant), MNCEQTY, TTDEG, TTDEG*MNCEQTY c. Dependent Variable: HRPERF
Table 2 above shows that for Model 1, R = .736, R = .542 and [F (2, 125) = 73.995, p = .0001]. This R means that 54.2% of the variance in the HRPERF is explained by TTDEG scores and MNCEQTY. Model 2 also shows the results after the product term (TTDEG*MNCEQTY) was included in the equation. Table 2 above indicates that the inclusion of the product term resulted in an R change of .035, [F (1, 124) = 10.385, p < 0.01]. The results show a presence of significant moderating effect. To put it differently, the moderating effect of MNCEQTY explains 3.5% variance in the HRPERF above and beyond the variance by TTDEG scores and MNCEQTY. Thus, it can safely be concluded that hypothesis H2 is supported. The coefficients table for CPERF as shown in Table 3 below depicts the results of the regressions equation for Model 1 and Model 2. Table 3: Coefficients - Corporate Performance
Coefficientsa Unstandardized Coefficients B Std. Error .509 2.304 .445 .046 .145 .334 -10.042 6.439 .666 .134 2.873 1.591 -.056 .032 Standardized Coefficients Beta .665 .030 .995 .591 -.736 95% Confidence Interval for B Lower Bound Upper Bound -4.050 5.069 .354 .537 -.517 .807 -22.788 2.703 .401 .931 -.276 6.022 -.119 .007
Model 1
t .221 9.662 .435 -1.560 4.972 1.806 -1.753
(Constant) TTDEG MNCEQTY (Constant) TTDEG MNCEQTY TTDEG*MNCEQTY
Sig. .825 .000 .664 .121 .000 .073 .082
244
Model 1 indicates that TTDEG was statistically significant (p < 0.001; Beta value = .665); however MNCEQTY was not statistically significant (p > 0.05). Equation 3 below shows that for a 1-point increase in TTDEG, the CPERF is predicted to have a difference by .445, given that the MNCEQTY is held constant. The regression coefficient associated with MNCEQTY means that the difference in CPERF between 50/50 equal ownership between JV partners and minor/majority ownership by MNCs is .145, given that TTDEG is held constant.
Equation 3: CPERF = .509 + .445TTDEG + .145MNCEQTY
The high-order of interaction effects of the MMR test was conducted to differentiate the extent of CPERF that was influenced by 50/50 equal ownership between JV partners and minor/majority ownership by MNCs. Model 2 shows the results after the product term (TTDEG*MNCEQTY) was included in the equation. As indicated in Table 1 the inclusion of product term resulted in an R change of .013, [F (1, 124) = 3.072, p < 0.10]. Model 2 shows TTDEG and MNCEQTY were significant (p < 0.001, Beta value = .995; p < 0.10, Beta value = .591, respectively). Similarly, TTDEG*MNCEQTY was also found to be significant (p < 0.10). The results did support for the presence of a small significant moderating effect. Table 3 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 4: CPERF = -10.042 + .666TTDEG + 2.873MNCEQTY - .056TTDEG*MNCEQTY
As indicated above, the interpretation of the regression coefficients is 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 the TTDEG, the CPERF is predicted to have a difference by .666, given that MNCEQTY is held constant. The interpretation of the regression coefficients for the product term in Equation 4 is that there is a -.056 difference between the slope of CPERF on TTDEG between 50/50 equal ownership between JV partners and minor/majority ownership by MNCs. In other words, the slope regressing CPERF on TTDEG is steeper for minor/majority ownership by MNCs as compared to 50/50 equal ownership between JV partners. The TTDEG and CPERF relationship for 50/50 equal ownership between MNCs and local JV partners and minor/majority 245
ownership by MNCs is shown in Figure 1 below by creating a graph displaying the relationships for each of the groups (Aguinis, 2004). From the results of descriptive statistics, the value of the mean score for TTDEG is 6.19; and for the standard deviation (SD) is 1.30. Following Aguinis (2004), the value 1 SD above the mean is 7.49 and the value 1 SD below the mean is 4.89. Thus, using the value of 1 SD above and 1 SD below mean in Equation 4 yields the graph shown in Figure 1. Results based on Equation 4 led to the conclusion that there was a small significant moderating effect of MNCEQTY. Figure 1 below shows that the TTDEG-CPERF relationship is stronger (i.e. steeper slope) for minor/majority ownership by MNCs as compared to 50/50 equal ownership between JV partners. The coefficients table for HRPERF as shown in Table 4 below depicts the results of the regressions equation for Model 1 and Model 2. Table 4: Coefficients - Human Resource Performance
Coefficientsa Unstandardized Coefficients B Std. Error 3.836 1.797 .425 .036 -.153 .261 -10.882 4.885 .733 .102 3.651 1.207 -.078 .024 Standardized Coefficients Beta .746 -.037 1.286 .883 -1.206 95% Confidence Interval for B Lower Bound Upper Bound .279 7.393 .354 .496 -.669 .364 -20.551 -1.213 .532 .934 1.262 6.040 -.126 -.030
Model 1
(Constant) TTDEG MNCEQTY (Constant) TTDEG MNCEQTY TTDEG*MNCEQTY
t 2.134 11.820 -.585 -2.228 7.212 3.025 -3.223
Sig. .035 .000 .559 .028 .000 .003 .002
Model 1 indicates that TTDEG was statistically significant (p < 0.001; Beta value = .746); however MNCEQTY was not statistically significant (p > 0.05). Equation 5 below shows that for a 1-point increase in TTDEG, the HRPERF is predicted to have a difference by .425, given that the MNCEQTY is held constant. The regression coefficient associated with MNCEQTY means that the difference in HRPERF between 50/50 equal ownership between MNCs and local JV partners and minor/majority ownership by MNCs is -.153, given that TTDEG is held constant.
Equation 5:
= 3.836 + .425TTDEG -.153MNCEQTY
246
Model 2 shows the results after the product term (TTDEG*MNCEQTY) was included in the equation. As indicated in Table 2 the inclusion of product term resulted in an R change of .035, [F (1, 124) = 10.385, p < 0.01]. TTDEG, MNCEQTY and TTDEG*MNCEQTY were found highly significant (p < 0.001, Beta value = 1.286; p < 0.05, Beta value = .883; p < 0.05, Beta value = 1.206, respectively). The results show the presence of a significant moderating effect. Table 4 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 6: HRPERF = -10.882 + .733TTDEG + 3.651MNCEQTY - .078TTDEG*MNCEQTY
The result for Model 2 indicates that for a 1-point increase in the TTDEG, the HRPERF is predicted to have a difference by .733, given that MNCEQTY is held constant. The interpretation of the regression coefficients for the product term in Equation 6 is that there was a -.078 difference between the slopes of HRPERF on TTDEG between 50/50 equal ownership between JV partners and minor/majority ownership by MNCs. The slope regressing HRPERF on TTDEG is steeper for minor/majority ownership by MNCs as compared to 50/50 equal ownership between JV partners. The TTDEG-HRPERF relationship for 50/50 equal ownership between JV partners and minor/majority ownership by MNC is also shown in Figure 1 below. The value of the mean score for TTDEG is 6.19 and for the standard deviation (SD) is 1.30. The value 1 SD above the mean is 7.49, and the value 1 SD below the mean is 4.89. Thus, using the value of 1 SD above and 1 SD below mean in Equation 6 yields the graph shown in Figure 1. Results based on Equation 6 led to the conclusion that there was a significant moderating effect of MNCEQTY. Figure 1 below indicates that the TTDEG-HRPERF relationship is stronger (i.e. steeper slope) for 50/50 equal ownership between JV partners as compared to minor/majority ownership by MNCs.
247
Figure 1: Slopes for both CPERF and HRPERF on TTDEG for MNCEQTY
30 25 20 15 10 5 0 -5 -10
Low CPERF / HRPERF (1 SD below mean) High CPERF / HRPERF (1 SD above mean) Minor/Majority ownership by MNCs (CPERF) 50/50 ownership by JV partners (CPERF) Minor/Majority ownership by MNCs (HRPERF) 50/50 ownership by JV partners (HRPERF)

Building on the underlying KBV and OL perspectives, this study has bridged the literature gaps by providing empirical evidence and new insights on the significant moderating effects of MNCs equity ownership in the relationships between degree of inter-firm technology transfer and two dimensions of local firms performance: corporate and human resource performances using the Malaysia sample. In comparison, the results suggest that the inclusion of MNCEQTY (50/50 equal ownership between MNCs and local JV partners vs. minor/majority ownership by MNCs) in TTDEG-LFP relationship has similar significant moderating effects in changing both local firms corporate performance (CPERF) (p < 0.10; R- squared change of 0.013) and local firms human resource performance (HRPERF) (p < 0.01; R- squared change of 0.035). The moderating effect of MNCEQTY is shown to be capable of changing the nature of relationship and further explains under what conditions TTDEG causes CPERF and HRPERF. This means the 248
presence of significant moderating effect of MNCEQTY (50/50 equal ownership between JV partners and minor/majority ownership by MNCs) exceeded the linear relationship between TTDEG and both CPERF and HRPERF. The results are consistent with literature which has strongly supported the significant role of MNCEQTY (Lyles and Salk, 1996; Harrigan, 1986; Salk, 1992). The results also suggest that MNCEQTY; whether 50/50 equal ownership between MNCs and local JV partners or minor/majority ownership by MNCs, has been established to provide a significant moderating effect in 1) TTDEG-CPERF relationship; where the relationship was found stronger for minor/majority ownership by MNCs as compared to 50/50 equal ownership between JV partners, and 2) TTDEG-HRPERF relationship; where the relationship was found stronger for 50/50 equal ownership between JV partners. The results provide critical information in such that although a successful technology transfer in IJVs; which includes the transfer of substantial tacit and explicit knowledge could have significantly increased 1) the corporate performance in terms the local firms business volume, market share, planned goals and profits, and 2) the human resource performance in terms of local firms product/service quality, employees productivity, managerial techniques/skills and
operational efficiency, nevertheless, organizational learning and acquiring new technological knowledge in JVs with shared management is rather difficult when there is no clear dominant control by any partner in the decision making process especially on the day-to-day managerial affairs and management of assets and resources. The IJVs with shared management are more likely to encounter difficulties when cultural differences are present. The differences in culture, language, educational background and distance with cross national partners could act as barriers to inter-organizational learning thus impeding knowledge transfer in IJVs (Mowery et al. 1996). Due to these cultural distances, a shared management IJVs is more 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 conflicts; which are most likely to arise from cultural differences, inhibit the transfer process. On the other hand, the MNCs with minor equity ownership in IJVs will normally become cautious and selective to transfer their 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); especially when they have less control/ability to 249
influence the systems, methods and decisions; which is frequently associated with higher resources commitment and equity interests. In this circumstance, as technology flows are strictly restricted and controlled, therefore even if technologies are intentionally transferred their effects on local firms corporate and human resource performances could be very nominal. In comparison, due to their technology superiority , the MNCs with majority equity ownership in IJVs have frequently perceived that their JVs as one-way learning processes thus having little to share with local partners (Liu and Vince, 1999; Danis and Parkhe, 2002). Since learning in IJVs is asymmetrical, the MNCs with majority equity ownership view organizational learning as solely the task of the knowledge-disadvantaged local partners (Lin, 2005). By limiting the flows of their valuable technologies, the local JV partners might not have much to learn thus resulting in no significant improvement on local firms corporate and human resource performances. The results further extend the findings made by Lyles and Salk (1996) and Pak and Park (2004) by empirically establishing that MNCEQTY has significantly influenced the relationship between degree of inter-firm technology transfer and local firms performance.
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Sazali A.W, Raduan C.

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

THE HANDBOOK OF INTER-FIRM TECHNOLOGY TRANSFER - AN INTEGRATED PERSPECTIVE

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

THE HANDBOOK OF INTER-FIRM TECHNOLOGY TRANSFER - AN INTEGRATED PERSPECTIVE

SAZALI ABDUL WAHAB AND RADUAN CHE ROSE

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Part II - Technology Transfer Characteristics and Degree of Technology Transfer

5 - The Effects of Knowledge Characteristics on Degree of Inter-Firm Technology Transfer

7 - The Effects of Technology Recipients Characteristics on Degree of Inter-Firm Technology Transfer

12 - MNCs Country of Origin, Degree Technology Transfer and Firms Performance

13 - MNCs Equity Ownership, Degree of Technology Transfer and Firms Performance

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

competitiveness, technological and innovation capabilities, and productivity.

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali Abdul Wahab National Defence University of Malaysia

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

1 - Technology and Technology Transfer: Defining the Concepts

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

THE TECHNOLOGY CONCEPT

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

DEFINING THE CONCEPT OF TECHNOLOGY TRANSFER

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

TECHNOLOGY TRANSFER AND KNOWLEDGE TRANSFER

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective

Sazali A.W, Raduan C.R

The Handbook of Inter-Firm Technology Transfer - An Integrated Perspective