A NETWORK APPROACH FOR THE INFLUENCES OF TRUST ON KNOWLEDGE INFLOWS/OUTFLOWS ON INNOVATION

Recently, many studies have discussed that MNC subsidiary operations rely not solely on their parent company’s knowledge instillation but their own generation from combining local experience and knowledge inflows. And this new knowledge will then trigger further innovation. Our model for this study is aimed at testing the impacts of knowledge inflows/outflows on subsidiaries’ innovation, as well as the moderating effect of trust on the above relationship. According to the results of this study, several conclusions were made as followings: (1) For MNC’s subsidiaries, not only knowledge inflows from parent firms or peer firms but also knowledge outflows to parent firms or peer firms did have significantly positive impact on subsidiaries’ innovation. (2) It was also found that trust did not show significant moderating effects on the interrelationship between knowledge inflows/outflows and MNC’s innovation.