Study On The Mechanism Of Knowledge Transfer During Chinese Enterprise Transnational M&A

As the arrival of the era of knowledge economy, knowledge is graduallyreplacing the traditional production factors, and becomes a crucial factor in promotingeconomic development, social progress and enterprise growth. Based on theimplementation of the strategy of "going out", more and more Chinese enterprises tryto make overseas mergers and acquisitions, joint ventures, new construction, etc. toget advanced knowledge and technologies, so as to speed up industrial upgrading andexpand the existing market share, which finally improve their core competitivenessrapidly. And the reasonable utilization, effective transfer and independent innovationof knowledge, impact the competitive advantage and market position of an enterprise,so become its source for sustainable healthy development. Subsidiary companysystem, through is a complex system of organization, is an unavoidable internalcompany relationships that comes up during the development of modern multinationalenterprise. Under the function of the network system within parent-subsidiarycompanies, the diversification of member companies forms the knowledgeheterogeneity among each other companies, which provides a valuable opportunity forproducing synergies among enterprises and also become effective vector forknowledge dissemination and transfer. Therefore, the efficient knowledge transferbetween parent company and subsidiary during cross border mergers acquisitions（M&A） now becomes as an absolute focal point for Chinese enterprises.It was found that the knowledge transfer during transnational M&A is always ahot issue in foreign direct investment. The existing research indicating that most ofthe scholars focused on the influencing factors, Model Constructions, corporateperformance, and so on, during the knowledge transfer of cross border M&A,regardless of the impacts from parent company and subsidiary themselves,particularly the corresponding theoretical evidence from developing or transitioncountries, such as the mechanisms of the knowledge transfer during Chineseenterprises transnational M&A. After combining multiple research methods, such as the paper reviews,theoretical discussion, case studies, empirical research, and so on, together withanalyzing the specific development practice of transnational M&A of Chineseenterprises, this study analysis and organized the mechanism of the knowledgetransfer during Chinese enterprises transnational M&A, so as to provide theoreticalbasis and practice guidelines for effective knowledge transfer during transnationalM&A of Chinese enterprises. Through the multi-case study method, eight well-knownand famous for knowledge transposition international enterprises are selected for theintensive analysis of the Cross-border Mergers Acquisitions behavior and thecomparison of the cased effect before and after Knowledge transposition. Theanalysis indicates three important characteristics: Firstly, the main intention of drivinginternational enterprises in China to merge parents and subsidiary companies is toreduce difficulties, costs, and risks as entering overseas markets, and to earn moremutual distribution channels, the good of competitive skills, the strategic resources,and the awareness of leading brands from overseas subsidiary companies. Secondly,the three main ways of knowledge transposition during the international mergencefrom the enterprises in China include primary, further, and informal transposition.Lastly, financial, operational, non-financial and human related performances can testthe effects of knowledge transposition from overseas parent and subsidiarycompanies.Based on reviewing and summarizing professional papers which focus on theknowledge transfer during the transnational M&A, the mode of knowledge transferbetween parent and subsidiary companies in their cross-border M&A was constructedout, where the characteristics of knowledge, properties of organization and situation,features of recipients and imparters are labeled as independent variables, whiletransferred method is considered as an intervening variable, and successful knowledgetransfer works as a dependent variable. Then raise theoretical and logic hypothesesbased on relationships among all these variables. By retrieving146validquestionnaires, this study first preprocessed sample data for confirming the validityand reliability of this survey, using SPSS12.0and STATA11.0software. Then it ensured the reasonability of the questionnaire design and the quality of the datathrough running the correlation analysis and multiple linear testing. In addition, tomake sure the theoretic and logical validities of the Model, this study analyzed therelationships between observed variables and latent variables using confirmatoryfactor analysis.Based on the size model analysis, this study quantified the knowledge transferwithin the parent company and subsidiary, and ultimately demonstrates the roles ofinfluencing factors in successful knowledge transfer and their workingmechanisms. Conclusions as follows:（1） Knowledge distance, transfer wishes,import ability, primary transfer, and further transfer, all of which work directly andsignificantly on the success of knowledge transfer, lead to positive effects; whilegeographic distance, which also works directly and significantly on the knowledgetransfer, results in negative effects; implicit knowledge, knowledge embedding,relational distance, systematic distance, learning wishes, and absorptive capacity, andfurther transfer, all of which work directly but non-significantly on the success ofknowledge transfer.（2） Absorptive capacity and import ability are mediated bytransferred method, and play indirect but significant positive effects on successfulknowledge transfer.（3） The overall significant levels of knowledge distancedramatically decreased, and the significant level of geographic distance even dropsignificantly as not notable, while the overall impact of the transfer wishes and importability slightly increased.Based on results above, in order to better facilitate knowledge transfer effect,here concluded several suggestions for Chinese enterprises that are executing orplanning knowledge transfer within parent company and subsidiary during theirtransnational M&A:（1）Improve the transfer efficiency of the main subjects;（2）Construct a appropriate platform for knowledge transfer;（3）Enhance risk preventionof knowledge transfer;（4）Pay attention to the cultural exchange and integration afterknowledge transfer. However, the limitation in both sample data and variableassumption may influence making conclusions. Future studies can focus on the following three aspects:（1）Reasonable metrics used in the evaluation system ofknowledge transfer;（2）knowledge transfer within the network architecture;（3）Positive effects on knowledge innovation triggered by knowledge transfer.