Signaling, spillover and learning effects of knowledge flows on division performance within related diversified firms

Purpose – This study aims to address the performance consequences of knowledge transfer within related diversified firms by distinguishing between knowledge outflows and knowledge inflows at the business division level. Design/methodology/approach – Questionnaire data from a sample of 118 business divisions were analyzed using stepwise linear regression. Findings – The results from a three-effect model for the analysis of knowledge transfer indicate that knowledge outflow improves division performance, while knowledge inflow damages it when absorptive capacity is weak. The overall effect of knowledge transfer is therefore beneficial with the exception of the cases of receiving divisions with low levels of absorptive capacity. Practical implications – These results indicate that knowledge transfer contributes to overall corporate performance, since knowledge outflow impacts positively on division performance in all cases and knowledge inflow impacts negatively on division performance only in some cases. Se...

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