Building Subsidiary Local Responsiveness: (When) Does the Directionality of Intrafirm Knowledge Transfers Matter?

The present study focuses on effects of subsidiary internal knowledge-based activities—knowledge transfer and reverse knowledge transfer—and absorptive capacity on local responsiveness. We also examine whether absorptive capacity, shared values, and psychological safety, representing constituents of the motivation-opportunity-ability model of behavior, moderate relationships of subsidiary internal knowledge-based activities with responsiveness. Based on a sample of 173 Chinese subsidiaries, the results suggest knowledge transfer and absorptive capacity facilitate local responsiveness. Shared values moderates positively and absorptive capacity negatively, the relationship between knowledge transfer and responsiveness. Psychological safety strengthens the link between reverse knowledge transfer and local responsiveness.