Cultural Distance and Knowledge Transfer within MNCs: the Case of the IT Industry in China

The purpose of this empirical study was to explore the moderating role of cultural distance on the relationship between knowledge transfer within MNCs and subsidiaries performance, using the IT industry in China as a study context. Data was collected through the implementation of a quantitative survey in China-based subsidiaries from 36 MNCs in the IT industry. The results, based on 1008 occurrences of knowledge transfer, across seven knowledge domains, to and from China-based subsidiaries, suggest that knowledge transfer is positively related to subsidiary performance. There is also an interactive effect on subsidiary performance between cultural distance, based on Hofstede (1993)'s cultural framework, and aggregate knowledge transfer within firms.