SOAS Research Online

Abstract

International joint ventures (IJVs) have been a significant vehicle of knowledge transfer between multinational enterprises (MNEs) and firms in emerging markets. In this study, we build on dynamic capabilities and external knowledge search from open innovation literature to study how inter-organisational relations, external knowledge and dynamic capabilities interact with each other over time to influence knowledge transfer via IJVs in the low carbon technology sector. Low carbon technologies refer to technical solutions and innovations that help to minimise greenhouse gas (GHG) emissions, especially carbon dioxide (CO2) in order to mitigate climate change. It covers renewable energy generation, nuclear power, more efficient fossil-based energy generation, and energy-efficient end use technologies. Based on longitudinal multiple case studies of three IJVs, involving 66 semi-structured interviews from two rounds of fieldwork in 2018 and 2020, we find that knowledge transfer processes in IJVs reside within the outset of the IJV-parent relationship and IJV-local relationships. Local partners play an increasing role in complementing transferred knowledge from parents across phases. During the absorption phase, IJVs search for external technical knowledge from supply chain partners and standardisation bodies to facilitate the absorption of transferred knowledge through business service. During the implementation phase, IJVs searched for market and technical knowledge from supply chain partners, standardisation bodies, and industrial associations through joint implementation to better practice transferred knowledge in the market. During the innovation phase, IJVs searched for technical and market knowledge from supply chain partners, standardisation bodies, industrial associations, research institutes and innovation promotion bureaus to launch new products, services and processes. Furthermore, departing from the traditional wisdom on organisational learning to promote firm performance as a final outcome, we highlight the role of interactions between dynamic capabilities and external knowledge in influencing two dimensions of knowledge transfer efficacy: speed and comprehension. We argue that sensing capabilities explore, identify and access external knowledge, facilitating the speed of knowledge transfer across absorption, implementation and innovation phases. Meanwhile, assimilation capabilities integrate complementary external knowledge with existing knowledge to facilitate comprehension in knowledge transfer across phases. Transformation capabilities learn from substitutional external knowledge to reuse, renew, and reconfigure existing knowledge to deepen comprehension in knowledge transfer across phases. Overall, the interaction between dynamic capabilities and external knowledge across phases builds up a sustainable competitive advantage in operating in the domestic market and approaching international markets.