A Dual Networks Perspective on Inter‐Organizational Transfer of R&D Capabilities: International Joint Ventures in the Chinese Automotive Industry*

ABSTRACT Acquisition of capabilities is both imperative and difficult in emerging economies. This study adopts a duel network perspective to examine how the source networks and recipient networks in which international joint venture (IJV) partners operate influence inter‐organizational transfer and diffusion of capabilities. We study multiple cases in the Chinese automotive industry to investigate how various factors of MNE source networks and the local recipient networks (business groups in China or qiye jituan) affect knowledge transfer from the MNE source networks into IJVs and knowledge diffusion from IJVs to their local recipient networks. The study suggests ways that the dual networks influence both types of knowledge transfer. We found both positive and negative effects of recipient and source networks on knowledge inflow to the IJVs and knowledge outflow from IJVs. The dual networks perspective is particularly relevant for emerging economies where the asymmetry between the knowledge, power and motivations of the recipient and source networks may significantly affect the knowledge transfer outcome.