1.1 Research Background

Knowledge is recognized as a key factor in shaping economic organizations. The volatility of the business environment has garnered focused attention on the view of knowledge as a dominant source of competitive advantage（Jansen et al.，2005）. In the innovation research field，a concept of knowledge transfer was firstly proposed in 1977 by American technology and innovation management scientist Teece（1997）. He believed that the international transfer of technology can help corporations to accumulate valuable knowledge and promote technology diffusion，so as to reduce the technology gap between regions.

Kogut and Zander（1992）thought that the ability of knowledge transfer is an important reason for the existence of corporations. Knowledge transfer is designed to absorb new knowledge and use new knowledge effectively. Szulanski（1996）believed that knowledge transfer within organizations is just like across the boundaries of knowledge sharing，namely transfers of best practice are thus seen as dyadic exchanges of organizational knowledge between a source and a recipient. Many evidences indicate that organizations which effectively utilize knowledge transfer will be more productive than those organizations which do not implement knowledge transfer.

MNCs’ competitive advantage depends increasingly on control over intangible resources，just like knowledge and relational capital. For example，MNCs’ headquarters（HQ）and subsidiaries are noted for systematically creating and storing knowledge in terms of the technology，skill，expertise，and experience，etc. in the process of business management and operation. Strategy and management scholars are in consensus that globally distributed networks of MNCs’ subsidiaries constitute a potentially important source of competitive advantage for MNCs（Ghoshal and Bartlett，1990；Birkinshaw and Hood，2001）. The ones to benefit from knowledge to speed up implementation of new ideas and technology can gain a competitive advantage. It is very important for MNCs to gain this competitive advantage. Many studies in the MNC literature，especially those focusing on the knowledge transfers between MNC units，have brought significant insight into the organizational requirements of knowledge transfer.

The conceptualization of MNCs as “differentiated network”（Hedlund，1986；Bartlett and Ghoshal，1999）has inspired a recent stream of researches on the creation，assimilation and diffusion of internal MNC knowledge. A common theme in this line of researches is that MNCs might develop knowledge in one location and then exploit it in other locations，implying internal transfer of knowledge by MNCs. Transfer of knowledge does not denote a full replication of the knowledge in the receiving units（just like overseas subsidiaries）. The key element in knowledge transfer is not the underlying（original）knowledge，but rather the extent to which the receiving subsidiary receives potentially useful knowledge and utilizes this knowledge in its own operations. Most of subsidiaries are set up in foreign countries，due to the difference of culture，language，even different communication level from HQ，they present different absorptive capacity. All these element will affect the level of internal knowledge transfer from MNCs’ HQ.

MNCs are no longer seen as repositories of their national imprint but rather as instruments whereby knowledge is transferred across subsidiaries，contributing to knowledge development（Holm and Pedersen，2000）. Argote et al.（2003）claimed that enterprise knowledge transfer is a process of organizing experience in order to affect an organization’s future actions. It means that knowledge changes the behavior of the one who receives that knowledge. He defined the knowledge transfer from the perspective of knowledge transfer results. Actually the change of knowledge or knowledge receiver’s behavior，both of them occur in the knowledge of cognitive stage by the one who receives that knowledge. Thus，the competitive advantage that MNCs enjoy is contingent upon their ability to facilitate and manage inter-subsidiary transfer of knowledge.

Prior researches on knowledge transfer within a MNC have attempted to identify similar factors that inhibit or facilitate knowledge transfer between MNC units. These are the absorptive capacity of the receiving unit and the motivation to acquire knowledge，while absorptive capacity has been treated mainly as a cognitive barrier distinct from motivational factors（Szulanski，1996；Gupta and Govindarajan，2000）. Motivational factors have most often been considered separately from absorptive capacity—for example，lack of motivation of the source and the recipient of knowledge in Szulanski（1996）and motivational disposition of the source and the target units in Gupta and Govindarajan（2000）. Two factors of particular importance to determine the transfer outcome stand out in the review of previous studies on knowledge transfer. Subsidiaries with motivated employees will be more interesting as exchange partners for MNC’s HQ，and they will also be better equipped to acquire and use the knowledge that they receive.

But then absorptive capacity and motivation reflect only internal factors in a process of knowledge transfer. It is also needed to deal with external factors such as culture and communication related factors. A study of 44 Swedish firms highlighted that the degree of codification has significant influence on the speed of knowledge transfer. The more time and cost are required to transfer；such transfer also highly depends on the face to face communication（Zander and Kogut，1995；Marcotte and Niosi，2000）. Hence，the differences of culture and communication between knowledge senders and receivers along with the transfer of tacit knowledge would make such transfers more complex.

Nowadays，international knowledge transfer has become a hot topic of theoretical researches，as one of the most important means to increase the competitiveness of MNCs. However，there are a number of gaps in our understanding of knowledge transfer within a MNC. First，we found that no work had attempted to examine the KTA framework（transfer actors，transfer content，transfer media，transfer context）in the level of international knowledge transfer. Second，although many explaining factors which affect the knowledge transfer within a MNC were dealt with in previous studies，most of them were actors-related factors（for example，absorptive capacity），no research has been done to explore or classify all factors related with international knowledge transfer（including transfer media or context specific factors）.