The role played by trust in reverse knowledge transfer: the case of a Chinese acquisition in the UK

Purpose

This paper aims to examine the critical, yet underexplored, role played by trust in reverse knowledge transfer (KT) in the context of cross-border acquisitions undertaken by an emerging economy (Chinese) firm. It specifically explored the antecedents and impact of trust on reverse KT between the acquiring and target firms.

Design/methodology/approach

This paper involved an empirical investigation based on survey data collected from 103 employees of a Chinese acquiring firm and its British subsidiary.

Findings

The findings reveal that trust is positively influenced by distributive justice and negatively impacted by the psychic distance between the acquiring and target firms. Importantly, the negative effect of psychic distance on trust was found to diminish in the presence of high perceptions of procedural justice. Trust was found to significantly contribute to reverse KT by acting as a pivotal mechanism. Surprisingly, no direct relationship was found between the absorptive capacity of the acquiring firm and reverse KT. However, trust was found to moderate the relationship between absorptive capacity and reverse KT, highlighting its central role.

Originality/value

This study is among the first to perform an in-depth analysis of the interplay between trust, justice perceptions and KT in cross-border acquisitions undertaken by emerging economy (Chinese) multinationals. The findings specifically reveal the key mechanisms that facilitate reverse KT and offer practical implications for managers involved in cross-border acquisitions.