Measuring the Effects of Relationship Quality and Mutual Trust on Degree of Inter-Firm Technology Transfer in International Joint Venture

Abstract

<p class="MsoNormal" style="text-align: justify; margin: 0in 0in 0pt;"><span style="font-family: Times New Roman;"><span style="font-size: 10pt;">The success of technology transfer (TT) within international joint ventures (IJVs) in the developing countries has frequently been measured by the degree of technology that is transferred to local partners. As compared to other formal technology transfer agents such as foreign direct investments (FDIs) and licensing, technology transfer through IJVs have been acknowledged by many studies as the most efficient mechanism to internalize the foreign partner’s technologies, knowledge and skills which are organizationally embedded. However, the transfer process has always involved a complex relationship between IJV partners which may cause direct impact on degree of technology transfer. The success of inter-firm TT requires a strong existence of a close and intense communications between the technology supplier and recipient. </span><span style="font-size: 10pt; mso-fareast-font-family: 'Times New Roman';">The main objective of this paper is to empirically examine the effects of two critical elements of relationship characteristics: relationship quality and mutual trust on two dimensions of degree of technology transfer: degree of tacit and explicit knowledge. </span><span style="font-size: 10pt;">Using the quantitative analytical approach, the theoretical model and hypotheses in this study were tested based on empirical data gathered from 128 joint venture companies registered with the Registrar of Companies of Malaysia (ROC). Data obtained from the survey questionnaires were analyzed using the correlation coefficients and multiple linear regressions. The results revealed that relationship quality, as the critical element of relationship characteristics, has a significant effect on both degrees of tacit and explicit knowledge; where the effect was slightly stronger on degree of explicit knowledge. Similarly, mutual trust between partners has shown consistent strong significant effects on both degrees of tacit and explicit knowledge; where its effect on degree of tacit knowledge was found slightly stronger than degree of explicit knowledge. The study has bridged the literature gaps in such that it offers empirical evidence on the effects of two generic relationship attributes: relationship quality and mutual trust on two dimensions of degree of inter-firm technology transfer: degree of tacit and explicit knowledge in IJVs.</span></span></p

Technology transfer in the construction industry

“…The terminology specific to this field has a certain degree of overlap with the field of economics because some management researchers have been trained as economists (e.g., Teece 2004). In addition to terminology related to the field of economics, management researchers commonly discuss interfirm (Wahab et al 2011) and intrafirm TT (Malik 2002), how technology can be transferred to a wholly-owned subsidiary (Arora and Fosfuri 2000) or joint venture (Wahab et al 2011), and the marketing, production and R&D associated with TT (Hu et al 2005). In light of globalisation, management research also has a strong focus on international TT, which describes transferring the capability and skills for manufacturing a certain product from a company in one country to companies in other countries (Baranson 1976;Chesnais 1986;and recently Teece 2017).…”

The Role of Strategic Technology Alliances (STA) Towards Organizational Performance in Manufacturing Industry: The Perspective of Developing Countries

“…Specifically, firms that lack resources have a higher need for alliances compared with firms who are well endowed (Ahuja, 2000b). It is known that many organizations in Malaysia lack R&D resources to develop and commercialize their own technologies and need to acquire such technologies, innovations, and capabilities externally (Wahab, Abdullah, & Rose, 2009). Therefore, the research proposes that:…”

“…These studies highlight that developing countries generally lack resources and capabilities in R&D to develop their own technologies (Lee & Tan, 2006). This inadequacy compels firms to acquire and adopt external technologies through STAs to compete in global markets (Wahab, Abdullah, & Rose, 2009). As such, the literature on STAs in developing countries warrants further empirical research (Wahab, Abdullah, & Rose, 2009 …”

“…This inadequacy compels firms to acquire and adopt external technologies through STAs to compete in global markets (Wahab, Abdullah, & Rose, 2009). As such, the literature on STAs in developing countries warrants further empirical research (Wahab, Abdullah, & Rose, 2009 …”

“…This research examines the STA initiatives of Malaysian manufacturers that lead to technology transfer and improved organizational performance. It is acknowledged that there are currently limited studies in the area of STAs in Malaysia (see, for example, Arshad, 2002;Wahab, Abdullah, & Rose, 2009). Past studies about Malaysia have focused on the impact of national culture on alliances (Bhaskaran & Gligorovska, 2009), factors affecting international joint ventures (Lyles et al, 1999;Sulaiman, Kechik, & Wafa, 1999), partner selection (Ghani & Subhan, 2005), and industry-university collaborations (See et al, 2007).…”