Moderating Effect of MNCs’ Equity Ownership in the Relationship between Degree of Inter-Firm Technology Transfer and Local Firms’ Performance

The inter-firm technology transfers (TT) through international joint ventures (IJVs), among others, havesignificantly contributed to a higher degree of local innovation performance/capabilities, technologicalcapabilities, competitive advantage, organizational learning effectiveness, productivity, technologicaldevelopment of local industry, and the economic growth of the host country. Since the focus of inter-firm TT indeveloping countries has shifted to degree of technology transfer, organizations in developing countries areattempting to assess not only the significant role of technology transfer in strengthening their corporate andhuman resource performance but also the influence of other critical variables such as MNCs’ size, age of JVs,country of origin, MNCs’ equity ownership (MNCEQTY) and MNC’s type of industries that could significantlymoderate the relationship. Based on the underlying knowledge-based view (KBV) and organizational learning(OL) perspectives, the main objective of this paper is to empirically examine the moderating effect of equityownership of MNCs (50/50 equal ownership between MNCs and local JV partners vs. minor/majority ownershipby MNCs) in the relationships between degree of inter-firm technology transfer and two dimensions of localfirms’ performance: corporate (CPERF) and human resource (HEPERF) performances. Using the moderatedmultiple regression (MMR) analysis, the theoretical models and hypotheses in this study were tested based onempirical data gathered from 128 joint venture companies registered with the Registrar of Companies ofMalaysia (ROC). The results revealed that equity ownership of MNCs has been established to provide asignificant moderating effects in 1) TTDEG-CPERF relationship; where the relationship was found stronger forminor/majority ownership by MNCs as compared to 50/50 equal ownership between JV partners, and 2)TTDEG-HRPERF relationship; where the relationship was found stronger for 50/50 equal ownership betweenJV partners as compared to minor/majority ownership by MNCs. The study has bridged the literature gaps insuch that it offers empirical evidence and new insights on the significant moderating effects of equity ownershipof MNCs in the relationships between degree of inter-firm technology transfer and local firms’ performancetechnology using the Malaysian sample.