In response to recent calls for more research on micro‐foundations, we seek to link human resource management (HRM) and knowledge transfer through individual‐level mechanisms, arguing that individual‐level conditions of action influence the extent to which employees engage in knowledge exchange. We examine four such conditions empirically using data from 811 employees in three Danish multinational corporations (MNCs). Our findings suggest that individual‐level perceptions of organizational commitment to knowledge sharing, and extrinsic motivation, directly influence the extent to which employees engage in firm‐internal knowledge exchange. We also find that intrinsic motivation and engagement in social interaction significantly mediate the relationship between perceived organizational commitment and knowledge exchange. Given that HRM can influence such conditions through an overall signaling effect and various practices, an understanding of these micro‐foundations will shed light on how organizations can effectively enhance knowledge transfer through HRM. © 2012 Wiley Periodicals, Inc.

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It is now well recognized that multinational enterprises (MNEs) are differentiated networks wherein subsidiaries vary in terms of their ability to create new knowledge and competencies for their parent groups. In much of this theory, it is taken for granted that subsidiary innovativeness has a positive correlation with the extent of reverse knowledge transfers to the parent MNE. Relying on the headquarterssubsidiary view of the MNE, we argue that, beyond a point, increasing subsidiary innovativeness will be associated with lower reverse knowledge transfers. Further, we argue that this relationship is sensitive to the subsidiary entry mode. Using data from a sample of 293 Italian subsidiaries, we find strong support for our hypotheses. In particular, our results confirm that the effect of subsidiary innovativeness on reverse knowledge transfers displays an inverted-U shape, and that the curvilinearity is greater for greenfield entries relative to acquisition entries. The U-shaped relationship between subsidiary innovativeness and reverse knowledge transfers, as well as the sensitivity of this result to entry mode are important new findings in the literature on the role of subsidiaries in competence creation.

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* This version of the article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the publisher's final version AKA Version of Record.

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