A darker side of knowledge transfer following international acquisitions

Taco Reus, BT Lamont, KM Ellis

Research output: Contribution to journalArticleAcademicpeer-review

49 Citations (Scopus)

Abstract

We consider a knowledge flow that dominates the international acquisition context but can actually harm foreign acquired firms' performance: non-location-specific knowledge transfer from acquirers to acquired firms ( N-LSKT). Considering its behavioral consequences, we argue that such knowledge transfer often may destabilize existing power structures in foreign acquired firms prompting conflict and power struggles, and as a result negatively affects their performance. We find support for this adverse knowledge transfer effect. Only at very high levels of N-LSKT, when acquirers are likely to extend their own capabilities and associated power structures more completely, do the performance effects improve. Further, predeal success of acquirers and post-deal functional integration amplify, while acquirers' strategic control over the acquired firm alleviates the generally negative effects of N-LSKT.
Original languageEnglish
Pages (from-to)932-944
Number of pages13
JournalStrategic Management Journal
Volume37
Issue number5
DOIs
Publication statusPublished - 2016

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