Measuring the Effects of Relationship Quality and Mutual Trust on Degree of Inter-Firm Technology Transfer in International Joint Venture

Sazali Abdul Wahab, Raduan Che Rose, Suzana Idayu Wati Osman


The success of technology transfer (TT) within international joint ventures (IJVs) in the developing countries has frequently been measured by the degree of technology that is transferred to local partners. As compared to other formal technology transfer agents such as foreign direct investments (FDIs) and licensing, technology transfer through IJVs have been acknowledged by many studies as the most efficient mechanism to internalize the foreign partner’s technologies, knowledge and skills which are organizationally embedded. However, the transfer process has always involved a complex relationship between IJV partners which may cause direct impact on degree of technology transfer. The success of inter-firm TT requires a strong existence of a close and intense communications between the technology supplier and recipient. The main objective of this paper is to empirically examine the effects of two critical elements of relationship characteristics: relationship quality and mutual trust on two dimensions of degree of technology transfer: degree of tacit and explicit knowledge. Using the quantitative analytical approach, the theoretical model and hypotheses in this study were tested based on empirical data gathered from 128 joint venture companies registered with the Registrar of Companies of Malaysia (ROC). Data obtained from the survey questionnaires were analyzed using the correlation coefficients and multiple linear regressions. The results revealed that relationship quality, as the critical element of relationship characteristics, has a significant effect on both degrees of tacit and explicit knowledge; where the effect was slightly stronger on degree of explicit knowledge. Similarly, mutual trust between partners has shown consistent strong significant effects on both degrees of tacit and explicit knowledge; where its effect on degree of tacit knowledge was found slightly stronger than degree of explicit knowledge. The study has bridged the literature gaps in such that it offers empirical evidence on the effects of two generic relationship attributes: relationship quality and mutual trust on two dimensions of degree of inter-firm technology transfer: degree of tacit and explicit knowledge in IJVs.

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International Business Research  ISSN 1913-9004 (Print), ISSN 1913-9012 (Online)

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