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To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-8551.2007.00513.x Byline: Ayse Saka-Helmhout ([dagger]) Abstract: This article explores the impact of institutional variation on the extent to which subsidiary firms learn from multinational corporations. Learning is conceptualized here as consisting of two aspects: knowledge flow and reinforcement of or change in routines to incorporate the behaviourist assumptions of learning into the international business field. The research is based on in-depth case studies that systematically compare the ways in which parent company knowledge diffuses to Polish, Turkish, Italian and German subsidiary firms in the chemical industry. The findings show that even though firms face the same global pressure to integrate and pursue the same international strategy, their learning outcomes are not the same. There is heterogeneous learning as a result of differences in the institutional context of home countries. Where institutional structures are not favourable to learning, the proactive or reactive orientation of actors to identifying future needs and modifying existing schemata - which highlight the importance of human agency - is significant in explaining learning. Author Affiliation: ([dagger])University of Groningen, Faculty of Management and Organization, Department of International Business and Management, PO Box 800, 9700 AV Groningen, The NetherlandsEmail:a.saka@rug.nl

Absorptive capacity is frequently highlighted as a key determinant of knowledge transfer within multinational enterprises. But how individual behaviour translates into absorptive capacity at the subsidiary level, and how this is contingent on subsidiaries' social context, remains under-addressed. This not only limits our understanding of the relationship between individual- and organizational-level absorptive capacity, but also hampers further research on potentially relevant managerial and organizational antecedents, and limits the implications we can draw for practitioners who seek to increase their organization's capacity to put new knowledge to use. To address this shortcoming we conduct an in-depth comparative case study of a headquarters-initiated knowledge transfer at two subsidiaries of the same multinational enterprise. The findings demonstrate that social interaction is a prerequisite for subsidiary absorptive capacity as it enables employees to participate in the transformation of new knowledge to the local context and the development of local applications. The findings also illustrate how organizational conditions at the subsidiary level can impact subsidiary absorptive capacity by enabling or constraining local interaction patterns. These insights contribute to the absorptive capacity literature by demonstrating the scale and scope of social interaction as a key link between individual- and organizational-level absorptive capacity. [ABSTRACT FROM AUTHOR]