The Effect of Quantity, Quality and Timing of Headquarters-initiated Knowledge Flows on Subsidiary Performance

This paper develops and tests a model that explains how the quality, quantity and timing of knowledge flows from headquarters influence subsidiary performance. It extends recent research on vertical knowledge flows between global headquarters and international subsidiaries. We find a positive quality/performance relationship and a curvilinear quantity/performance relationship, indicating that too much knowledge sharing can be detrimental to the receiving subsidiary. Most importantly, we show that the timing of a knowledge flow significantly affects subsidiary sales performance.