The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0969-6474.htm

Knowledge transfer and the role

of local absorptive capability at
science and technology parks
Abd Hair Awang, Mohd Yusof Hussain and
Jalaluddin Abdul Malek
School of Social, Development and Environmental Studies,
Universiti Kebangsaan Malaysia, Selangor, Malaysia

Knowledge
transfer

291
Received 9 December 2011
Revised 14 April 2013
Accepted 20 May 2013

Abstract
Purpose This paper aims to investigate to what extent knowledge inflows have taken place among
professional Malaysian workforces and what the significant employee-related factors of knowledge
transfer are. The development of technology parks at Technology Park Malaysia (TPM), Kulim High
Tech Park (KHTP) and Multimedia Super Corridor (MSC) is the focus of the discussion.
Design/methodology/approach Data were collected through a self-administered survey to 300
local professionals; and 51 percent responded. A multiple regression was used to identify the
significant determinants of transfer of knowledge.
Findings Knowledge transfer from foreign expatriate, parent and peer subsidiary companies to
local professionals is at a moderate level. The overall multiple regression shows that workplace
learning, personal time management, symptom of replication, adaptation and innovation, and work
experience significantly contribute to the transferring of expertise to local professional employees.
Research limitations/implications The success of companies in todays competitive economy
lies more in their knowledge and intellectual capital rather than other resources. Therefore,
transferring new knowledge from foreign multinational corporations (MNCs) to local workforces is a
basic step for future sustainable competitive advantage. Empirical evidence from previous research
shows that information and communication technology can facilitate the transfer of knowledge. This
is not covered in this study.
Practical implications Training mechanisms must be designed in such a way to promote in-plant
training or employee attachment at the parent company or foreign peer subsidiaries.
Originality/value The paper shows that the success of knowledge transfer depends on the
absorptive capacity, the organizational learning climate and the willingness of foreign expatriates in
multinational corporations to transfer knowledge. This is an empirical indication of knowledge
inflows within Malaysian technology parks, which is a relatively new topic to be explored.
Keywords Knowledge management, Workplace learning, Employee behaviour, Learning organizations,
Multinational companies
Paper type Research paper

Introduction
Strong economic growth and continuous expansion of real per capita income are
Malaysias intention. In 1956, Solow introduced the production function, and most
This research was supported financially by the Ministry of Science, Technology and Innovation
Malaysia (MOSTI). The authors are grateful to research executives at Technology Park Malaysia
(TPM), Multimedia Super Corridor (MSC) and Kulim High-Tech Park Corporation (KHTPC) for
their valuable contributions.

The Learning Organization

Vol. 20 No. 4/5, 2013
pp. 291-307
q Emerald Group Publishing Limited
0969-6474
DOI 10.1108/TLO-12-2011-0059

TLO
20,4/5

292

economists have acknowledged the role of innovation in driving forward economic

growth. Empirical evidence and modern economic growth theories in support of
long-term economic growth are not solely driven by capital. Innovation also plays a
significant role (Juma, 2005). The knowledge economic growth model proposed by
Tapscott (1996, 1998) and Tapscott et al. (1998) noted the role of knowledge workers
and policies that stimulate innovation in science and technology. Innovation and
adaptation of technologies generated from investment in research and development
(R&D) are proven to generate economic advancement. The reliance of technology
transfer from developed to developing countries is slowly eroding. Economic growth
strategies have now shifted to the advancement of science and technology (National
Economy Advisory Council, 2009).
The intensity of research and technological development for the private sector in
Malaysia is relatively low compared to the public sector. The Sixth Malaysia Plan,
1991-1995 (RMK-6) showed that innovation activity is mostly focused on repair work
or minor modifications to meet local needs rather than the design and development of
new products and processes (Sixth Malaysia Plan, 1991). Investments in capital and
intensive technology with high value-added potential should be further developed in
Malaysia, especially in the industrial and service sectors. Malaysia should not rely on
building adaptive capacity and imported technology, but on developing new
technology locally (Seventh Malaysia Plan, 1996). However, the skills of local workers
in service negotiation, local design, and engineering are still limited (Sixth Malaysia
Plan, 1991). The use of foreign ownership innovation and technology is still occurring
(National Economy Advisory Council, 2009). In 1994, the government also introduced a
program to bring back Malaysian scientists and engineers who had been working
abroad. The Malaysian government also brought in foreign experts to enhance the
knowledge base of the local workforce (Seventh Malaysia Plan, 1996). Various
strategies were adopted. These included smart partnerships and strategic alliances
with local companies and multinational corporations. The object was to enable local
industries to benefit from advanced technology, penetrate new markets, and become
more competitive in the global arena (Seventh Malaysia Plan, 1996; Institute of
Strategic and International Studies, 2002; Tenth Malaysia Plan, 2010; National
Economy Advisory Council, 2009; Prime Ministers Department, 2011).
One of the main objectives in the establishment of science and technology parks is to
attract the worlds leading companies as well as local talent enterprises in the hope of
creating more local technology-intensive and knowledge-based industries. The first
technology park was established in the Sixth Malaysia Plan (RMK-6) to promote
private-sector participation in technology development and the growth of
technology-based companies (Sixth Malaysia Plan, 1991). The Composites Technology
City was established at Melaka, Subang Aerospace Industrial Park. The Avionics
Technology Park was established in Selangor; the Natural Resource Park in Sarawak;
the Science Park at Penang Island; and the State of Johor also planned to develop similar
parks (Seventh Malaysia Plan, 1996). In the Ninth Malaysia Plan (RMK-9), the years
2006-2010 saw emphasis on a technology incubator, which served as a catalyst for the
creation and facilitation of new technology-based entrepreneurs (Ninth Malaysia Plan,
2006). Various incentives were provided to stimulate the development of products and
processes in science and technology. The provision of basic infrastructures served as an
incentive to develop technological capabilities in product development and

manufacturing process engineering (Ninth Malaysia Plan, 2006; Tenth Malaysia Plan,
2010; National Economy Advisory Council, 2009). In addition, the Eighth Malaysia Plan
(2001; RMK-8) of 2001-2005, infrastructure and environment designed to stimulate the
development of information and communication technology (ICT) in advancement of the
National IT agenda (NITA) were established. Incentives offered in the security bill in the
Eighth Malaysia Plan, 2001-2005 were also established. These incentives included
freedom to hold equity, unlimited recruitment of foreign skilled workers, and no limit on
the use of foreign capital. An income tax exemption for up to ten years or 100 percent
deduction of an investment tax allowance was offered, for a period of five years (Eighth
Malaysia Plan, 2001).
In 1988, Technology Park Malaysia (TPM) was established as an agency under the
Ministry of Science, Technology and Environment. It is now wholly owned by the
Ministry of Finance. Currently, 135 companies are located at TPM. The overall
building occupation rate is 95 percent. The tenants consist of 16.3 percent MNCs and
83.7 percent local companies. Sevent-seven percent of these company focus on
information and technology. Several companies focus on telecommunications and
electronics (5 percent), biotechnology (5 percent), engineering (5 percent), and
environmental technology and commercial (6 percent) (Technology Park Malaysia,
2008). At the same time, total investment in 2004 in Kulim Hi-Tech Park (KHTP)
reached RM2.3bn. The existence of KHTP has attracted local and foreign companies to
invest directly in situ. The numbers of foreign companies include some from the USA
(five), Japan (eight), Germany (two), and one each from Canada and the UK (Kulim
Hi-Tech Park, 2008). The number of companies involved in KHTP stands at 178. of
these, 90.4 percent are local companies, while 9.6 percent are foreign companies.
Meanwhile, the Multimedia Super Corridor (MSC) was established in 1996 as a global
test house of innovation activities, as well as incentives to attract the worlds leading
companies as a hub of ICT and to develop local SMEs (Eighth Malaysia Plan, 2001).
MSC has attracted a total of 825 companies, with 72.9 percent being local and 27.1
percent foreign MNCs (Multimedia Development Corporation, 2008). Thus more
employment opportunity was created for local workers, mainly professional in nature,
with this employment serving as a catalyst for economic growth. This study was
guided by two leading research questions:
(1) To what extent has the local professional workforce at foreign MNCs acquired
knowledge inflows:
(2) Is knowledge inflow in foreign MNCs affected by local absorptive capabilities?
An alternative hypothesis of this study is that local absorptive capabilities have a
significant impact on knowledge inflow. This paper explores the determinants of
knowledge transfer and the role of the absorptive capability of the bumiputera (local
native) professional workforce at science and technology parks in Malaysia.
Specifically, the focus of this study is:
.
to examine the inflows of knowledge from MNCs to the local professional
workforce; and
.
to analyze the significant contribution of the absorptive capability of the local
professional workforce on knowledge inflow.

Knowledge
transfer

293

TLO
20,4/5

294

Theoretical framework and literature review

Knowledge transfer is based on the collaboration of different stakeholders
(users/receivers and producers/senders) and how they mutually interact. Nonakas
(1994) dynamic theory of organizational knowledge was used as a theoretical backdrop
for this type of knowledge and transference process. Organizational learning theory,
outlined by Argyris and Schon (1978) and extended by Argote and Ingram (2000),
Argote (1999) and Nonaka and Takeuchi (1995), provides the nature and relevant
factors of transferring knowledge from foreign MNCs to the local workforce or from the
local workforce to their parent company and peer subsidiary company. Also referenced
in this paper are joint ventures and strategic alliances (Powell et al., 1996) and mergers
and acquisitions (Haunschild and Miner, 1997) as models of inter-organizational
knowledge transfer.
Knowledge transfer mechanisms include:
.
personnel movement;
.
guided learning by doing;
.
learning by observation;
.
in-house or off-house training;
.
replication and innovative activities, scientific publication and presentation;
.
interaction within employees mainly by teamwork;
.
working with expert/expatriate and coaches/mentoring; and
.
alliances and inter-organization relationships (Kao et al., 2006; Foss and
Pedersen, 2002).
Among the predictors of knowledge transfer are company rewards, promotion and
compensation systems, organizational learning culture, employees absorptive
capacity, and social capital (Chiang, 2007; Dayasindhu, 2002; Gopalakrisnan and
Santoro, 2004; Gupta and Govindarajan, 2000; Lubit, 2001; Lucas, 2006; Seidman and
McCauley, 2005; Ward, 2007). Local absorptive capability was introduced by Cohen
and Levinthal (1989, 1990) as a critical factor in terms of absorbing the inflow of
knowledge in order to spur innovation. Local absorptive capability in this study refers
to an employees capabilities in the acquisition, assimilation, transformation, and
exploitation of knowledge as mentioned by Cohen and Levinthal (1989, 1990) and
Zahra and George (2002). These capabilities are primarily a function of the recipients
level of prior related knowledge, skills, and attitude. Prior related knowledge, skills,
and attitude include learning at the workplace, optimum utilization of working hours,
passion for innovation, drive for self-development, shared language, and relevant
previous work experiences (Cohen and Levinthal, 1990; Szulanski, 2003, 1996). Sparkes
and Miyake (2000) showed empirical evidence reflecting that excellent human resource
development (HRD) was predominantly responsible for training that enriched
knowledge transfer among employees. Meanwhile, from a learning perspective,
Downes et al. (2000) justify that knowledge transfer occurs when a person learns and
shares knowledge with others, whether beyond the boundaries of space, time, or
hierarchy. According to Santoro and Gopalakrishnan (2000), in an atmosphere of trust,
firms are more willing to share their unique knowledge with others. Active
knowledge-transfer activities result in a built-up competitive advantage and

harmonized operations in different business environments (Kogut and Zander; cited in

Minbaeva and Michailova, 2004). Knowledge transfer is also driven by competition and
searching for new resources that can be developed in any companys operations around
the world (Connelly et al., 2007). These trans-national strategies are constantly used to
help improve competitiveness (Connelly et al., 2007; Lubit, 2001). Thus, individual
replication, adaptation, and innovation initiation will drive the receipt of knowledge
transfer. Buckley et al. (2006) also pointed out that many factors contribute to the
process of transfer of knowledge. These factors include awareness and readiness for
self-development. Moreover, motivation for learning and observing capabilities
enhances the effectiveness of knowledge transfer among employees (Tang et al., 2008).
Research methodology
Data was collected through guided survey questionnaires, which in most cases were
self-administered in a survey of 300 bumiputera (local native) professionals (of whom
51 percent responded) at foreign MNCs in Bukit Jalil Technology Park Malaysia
(TPM), Kulim Hightech Park (KHTP), and the Multimedia Super Corridor (MSC),
Cyberjaya. The sample size was stratified equally (100 respondents) at each science
and technology park. The response rate was 73 percent at TPM, 38 percent at MSC,
and 43 percent at KHTP. These professionals (engineers, computer programmers,
scientists, and technicians) were involved in research and development at their
companies. The survey questionnaire was adapted from extensive reviews of relevant
research (Chua and Pan, 2008; Chiang, 2007; Foss and Pedersen, 2002; Gilbert and
Cordey-Hayes, 1996; Gray and Meister, 2006; Harzing and Noorderhaven, 2006; Kao
et al., 2006; Jassimuddin et al., 2005; Lin, 2007; Lubit, 2001; Lucas, 2006; Minbaeva and
Michailova, 2004; Tang et al., 2008; Vance and Paik, 2005) and blended with standard
instruments of organizational learning (Mikkelsen and Gronhaug, 1999). An expert
panel from TPM, KHTP, MSC, foreign MNCs, and the University of British Columbia,
Canada, reviewed and validated the survey questionnaire. Finally, 13 items (see the
Appendix) with high reliability were used to measure the inflow (a 0:90) of
knowledge. The respondents were asked to indicate on a five-point Likert scale ranging
from 1 (strongly disagree) to 5 (strongly agree) the extent to which they engaged in the
transfer of knowledge. The authors analyzed the data using descriptive statistics to
describe respondents background, innovation outputs, and knowledge-transfer
activities. Multiple regressions were used to identify significant predictors of
knowledge transfer. The overall knowledge inflows were calculated from 13 items to be
a single variable as a dependent variable. The predictor variables consisted of:
.
the organizational learning dimensions;
.
workplace learning;
.
personal time management;
.
symptoms of replication;
.
adaptation and innovation;
.
work experience;
.
passion for self-development; and
.
proficiency in foreign language.

Knowledge
transfer

295

TLO
20,4/5

The results of regression analysis and the variance inflation factor (VIF) scores
(varying from 1.09 to 3.169) estimated with the various models did not reveal any
serious multicollinearity. The VIF scores are well below 10, the critical value for a
serious problem of multicollinearity (Neter et al., 1983; Hair et al., 1998). The overall
model is also fit (F 17:139, p , 0:001). The overall selected variables explain 57
percent (R 2 0:57) of the variance in knowledge inflows.

296
Science and technology parks in Malaysia
This study highlights three science and technology parks in Malaysia, i.e. TPM, KHTP
and MSC. TPM aims to be a comprehensive center for technology innovation and the
latest in research and product development. KHTP aims to be the city of the future
science with a goal of integrating merger technology industries, especially in
advanced electronics, mechanical engineering, telecommunications, semiconductors,
optoelectronics, biotechnology, advanced materials, research and development, and the
production of new technology. The main objective of MSC is to be the strategic location
developer for innovative uses of ICT to enhance national economic growth and
competitiveness, as shown in Table I.
TPM is located on a site of more than 600 acres at Bukit Jalil, close to the capital city,
Kuala Lumpur. TPM sits in the heart of the Multimedia Super Corridor (MSC) and close
to the new Federal Government Administrative Center at Putrajaya, the intelligent city
Cyberjaya, and Kuala Lumpur International Airport (KLIA). TPM has a good
transportation network. The park is linked to the North-South highway, Port Klang,
Science and technology park

Objectives

Technology Park Malaysia (TPM)

Providing R & D and innovation facilities for the private

sector
Participating actively in the trade of products of research and
innovation
Facilitating partnerships between government and private
sector in technology development
Providing support and services in marketing, management,
and technology for tenant companies
Creating a conducive environment to promote knowledgebased society
Being an active participant in the creation of national wealth
through innovation and technology development

Kulim High Technology Park (KHTP) Attracting and incorporating high-technology industry
Establishing science cities in the future
Meeting high-technology manufacturing activities, training,
and R&D to meet modern, healthy lifestyles
Multimedia Super Corridor (MSC)

Table I.
Objective of science and
technology parks

Attracting global information and communication technology

(ICT) companies
Attracting export-focused companies that conduct research,
develop new products and technology

Sources: Multimedia Development Corporation (2008); Technology Park Malaysia (2008); Kulim HiTech Park (2008)

West Port, Kuala Lumpur Airport Cargo Terminal, and public transport facilities.
TPMs infrastructure is a creative blend of nature and structure with tropical
surroundings, enabling its tenants to work in a prestigious park setting environment
(Technology Park Malaysia, 2008). Currently, TPM features 12 distinct buildings
equipped with smart facilities, which include the use of solar energy to power its entire
network systems. Other support and recreation facilities include a gymnasium,
convenience stores, food outlets, banks, a clinic, kindergarten, and an engineering
college (Technology Park Malaysia, 2008). Special incentives and facilities are
provided to attract more investors, mainly from foreign multinational companies
(MNCs), as shown in Table II.
KHTP was founded in 1992 and opened officially in 1996. It is the first high-tech
park in Malaysia (Kulim Hi-Tech Park, 2008). It is located in Kulim, in the state of
Science and technology park

Incentives and advantages

Technology Park Malaysia (TPM)

Adjacent to the center of the federal government at Putrajaya,

the international airport, Port Klang and the North-South
expressway
Availability of retail space with complete basic infrastructures
Provides research laboratory facilities
Close to provider of expertise from universities and research
centers such as UKM, UPM, UNTEN, and MARDI
Supply of knowledge workers from colleges and universities,
mainly UKM, UPM and UNITEN

Knowledge
transfer

297

Kulim High Technology Park (KHTP) Provides modern basic physical infrastructure
Low land prices (RM18.00 per ft2), water tariffs (RM1.00 per
cubic meter) and proprietary-free lease for 60 years
Provides an effective one-stop center of local authorities
Availability of highly skilled labor, especially from USM, the
Malaysian Spanish Institute, the Japan Malaysia Institute, and
the Polytechnic Institute
Multimedia Super Corridor (MSC)

Provides a world-class physical and information

infrastructure
Provides an effective one-stop agency the MIDA and
Multimedia Development Corporation (MDeC)
Freedom of ownership and sourcing of global capital and
loans
No income tax or tax exemption of up to ten years on
investments and tax duty-free multimedia equipment
Protected by cyber law and intellectual property and no
internet screening
Allows unrestricted employment of foreign and local
knowledge workers
Availability of skilled manpower from Multimedia University,
Lim Kok Wing University, and nearby universities
Continuous improvement of high-skilled workers through inservice training

Sources: Multimedia Development Corporation (2008); Technology Park Malaysia (2008); Kulim
Hi-Tech Park (2008)

Table II.
Investment incentive and
advantages

TLO
20,4/5

298

Kedah, located on the west coast of Peninsular Malaysia and covers about 1,700
hectares (approximately 4,000 acres). KHTP is also strategically located 26 km from
North Container Butterworth Transport Terminal (NBCT) and about 36 km from
International Airport Bayan Lepas, Penang. It is also linked to the North-South and
East-West highways (Kulim Hi-Tech Park, 2008). The area is governed by the Kulim
Technology Parks Corporation, which is a subsidiary of the Kedah State Development
Corporation. The area of KHTP is also equipped with electricity, telecommunications,
water, natural gas, waste recovery, and a fiber-optic telecommunications system with
24 main lines, which can be upgraded up to 60,000 lines (Kulim Hi-Tech Park, 2008).
MSC is host to international foreign companies and local companies that focus on
multimedia and communications products, solutions, services, and research and
development. The Multimedia Super Corridor is an area about 15 50 km, across up to
the Petronas Twin Towers Kuala Lumpur International Airport (Multimedia
Development Corporation, 2008). MSC covers an area of 750 km2. It is bounded by
the North-South Highway in the East and the Coastal Highway in the West. This area
includes Cyberjaya (the technology center) and Putrajaya (the new federal government
administrative center). Overall, MSC will be equipped with a digital fiber-optic
network, 2.5-10 gigabit link that will directly and interactively connect with the
ASEAN countries, Japan, the USA, Europe, and other developing countries.
Results and discussion
Profile of employees and companies
This section presents the descriptive statistics and covers the background of the
respondents and companies of this study. Local professionals are male-dominated in
TPM (53.4 percent), MSC (52.6 percent), and KHTP (67.4 percent). Overall, 34.0 percent
of professional workers are aged 26-30 and 26.8 percent are aged 31-35 years.
Employees in the age range 26-30 dominate TPM (39.7 percent) and KHTP (34.9
percent), while in MSC professional workers aged 31-35 years dominate (40.5 percent).
Local professional knowledge workers are mostly young executives. Almost 80-90
percent of them are hold Bachelors degrees, with 9 percent holding a Masters degree.
On average, 66 percent graduated from local higher-learning institutions. A total 53.4
percent of professional workers in TPM and 46.5 percent of KHTP earn gross salaries
between RM2,001 and RM4,000 per month. However, in MSC, 27.0 percent are paid
between RM2,001 and RM4,000 per month, while 29.7 percent earn a monthly gross
salary of RM4001-RM6000. In terms of work experience, the majority at TPM (46.6
percent) have worked for less than four years; at MSC the majority have worked for 5-8
years (30.6 percent), and at KHTP the majority have worked for 9-12 years (34.1
percent). This shows that local professional knowledge workers at KTHP are relatively
more experienced in term of years employed than workers at TPM and KHTP.
Innovation output
In terms of output of innovation activities in the patent submitted, only 19.5 percent of
the bumiputera professionals were surveyed. The submission of patents is relatively
high at TPM (35.6 percent) as compared to MSC (2.6 percent) and KHTP (7.0 percent).
Registering intellectual property/innovations enables companies to expand their
manufacturing operations and protect the rights to their inventions. Among the
bumiputera professionals surveyed, only 7.0 percent had managed to patent their

innovation activities. However, of the bumiputera professionals at MSC, none had

received a registered patent, as shown in Table III.
The talent of local professionals in the private sector as a consultant is further
highlighted. The study found that only 18.4 percent of bumiputera professionals have
been invited to be local or international innovation consultants. Those attaining this
status are relatively fewer at MSC (2.6 percent) and KHTP (2.3 percent) in comparison
to TPM. National and international recognition of innovation activities may stimulate
professional innovation. Among the bumiputera professionals, only 16.2 percent had
received invention awards. However, none of the professionals at MSC and KHTP had
received invention awards. In terms of writing about invention in the form of articles
presented at seminars, workshops, and science and technology expositions, which
highlight the capabilities of local inventors in the world and regional arena, no articles
had been presented by professionals at KHTP, while articles had been presented by 2.6
percent of professionals at MSC and 38.4 percent at TPM. Publishing scientific articles
in internationally recognized journals was dominated by developing nations (Juma,
2005). The publication of an article will spread innovation findings and generate new
knowledge. This activity seems more prevalent at TPM. In terms of articles published
by bumiputera professionals at TPM, the figure is 16.2 percent, while no articles were
published by professionals at either MSC or KHTP.

Knowledge
transfer

299

Transfer of knowledge
Table IV shows that the overall knowledge transfer is at a moderate level. However,
expatriates play a substantial role at TPM, with most of the items measured being
classified as high level. Foreign experts were able and willing to transfer their expertise
through the sharing of work experience (M 3:6104, SD 0:9025) and holding
discussions to solve work-related problems (M 3:6364, SD 0:9553). Local
professionals also gained a better knowledge through observation of foreign experts
(M 3:6364, SD 0:9756) doing their job, and referring the job to foreign experts
(M 3:5779, SD 0:9059) to solve job-related tasks. Local professionals also refer to
reading material (M 3:4740, SD 0:9915) and task-related documents (M 3:3701,
SD 1:0350) written by foreign experts. In term of transferring production technology
from the parent company, the mean score is classified as being high at TPM, and
moderate at both KHTP and MSC, but the differences are insignificant. Among the

Number of patents

TPM

None
1-2
3-4
5-6
7-8
Over 10
Total

64.4
26.0
8.2
1.4

100.0

Patents submitted
MSC
KHTP
97.4

2.6

100.0

Note: Figures shown are percentages

Source: Fieldwork, 2008-2009

93.0

7.0

100.0

Total

TPM

Patents granted
MSC
KHTP

Total

80.5
12.3
6.5
0.6

100.0

74.0
16.4
5.4
1.4
1.4
1.4
100.0

100.0

100.0

85.7
9.0
3.5
0.6
0.6
0.6
100.0

93.0
4.7
2.3

100.0

Table III.
New patent submissions
and patents granted 2007

TLO
20,4/5

300

Table IV.
Knowledge inflows from
foreign expert, parent,
and peer subsidiary
company

Discuss with foreign experts to solve tasks

Observe foreign expert
Share work experience with foreign expert
Refer foreign expert within my company
Parent company general information
Parent company production technology
Useful written materials by foreign expert
Guidance from foreign expert
Refer documents written by foreign expert
Peer subsidiary company general information
Parent company provides strategy
Peer subsidiary company production technology
Peer subsidiary company strategy
Overall knowledge inflow

Mean

SD

3.6364
3.6364
3.6104
3.5779
3.5195
3.5130
3.4740
3.4286
3.3701
3.3636
3.3312
3.3182
3.2208
3.4615

0.9553
0.9756
0.9025
0.9059
0.9982
0.9983
0.9915
0.9624
1.0350
1.0530
0.9971
1.0707
1.0981
0.71913

Levela
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate

Note: aMean classification: 1:00-2:33 low, 2:34-3:67 moderate, 3:68-5:00 high

Source: Fieldwork, 2008-2009

lowest-ranked knowledge-transfer activities is transferring company strategy from the

parent and peer foreign subsidiary companies to challenge competitors.
Table V indicates that overall inflows of knowledge from foreign experts, parent
companies, and peer subsidiaries are at a moderate level (M 3:4615, SD 0:71913).
ANOVA showed a significant difference between the groups (F2; 151 10:756,
p , 0:001). TPM showed significantly higher inflows of foreign expertise compared to
the other two science parks. The knowledge inflows in MSC and KHTP are considered
to be at a moderate level. Table VI shows that companies from Australia, China, India,
and Norway have a high level transfer of knowledge to local professionals, whereas
multinational companies from Germany, Singapore, and Switzerland feature among
the lowest-ranked knowledge inflows.
Determinants of knowledge inflow
The authors used a multiple regression to determine which of the variables in
employee absorptive capability were predictive of knowledge inflow. The overall
model shows that workplace learning (b 0:323, p , 0:001), personal time
management (b 0:478, p , 0:001), symptoms of replication, adaptation and

Table V.
Comparative knowledge
transfer

Science and technology parks

Mean

Technology Park Malaysia (TPM)

Multimedia Super Corridor (MSC)
Kulim High Technology Park (KHTP)
Total

3.7281
3.2267
3.2165
3.4615

Knowledge inflowa
SD
0.51171
0.85264
0.74811
0.71913

Levelb
High
Moderate
Moderate
Moderate

Notes: aF2; 151
10:756, p , :001; bmean classification: 1:00-2:33 low, 2:34-3:67 moderate;
3:68-5:00 high
Source: Fieldwork, 2008-2009

Country

Mean

SD

Australia
China
India
Norway
USA
Finland
UK
Sweden
Japan
France
Switzerland
Singapore
Germany

4.1282
3.9385
3.7863
3.6923
3.6731
3.6603
3.5923
3.4103
3.3549
3.2821
2.9385
2.6923
2.5812

0.5187
0.2139
0.2821
0.3264
0.5684
0.3478
0.7173
0.5688
0.6816
0.4555
0.4121
0.9959
1.2139

Levela
High
High
High
High
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate

Note: Mean classification: 1:00-2:33 low, 2:34hyphen; 3:67 moderate, 3:68hyphen; 5:00 high
Source: Fieldwork, 2008-2009

innovation (b 0:147, p , 0:10), and work experience (b 2 0:015, p , 0:10)

contribute significantly to the transfer of expertise to local professional employees.
However, work experience has an inverse relationship to the transfer of foreign
expertise. This means that young professionals are more likely to acquire and absorb
foreign expertise than senior employees. Employee learning in the workplace is
consistently significant at TPM and MSC. Appropriate time for innovation activity is a
significant predictor at TPM (b 0:404, p , 0:001) and KHTP (b 0:483, p , 0:05)
compared to other science and technology parks, while opportunities for
self-development are also dominant in self-absorbed foreign expertise, especially
within TPM (b 0:242, p , :05). Professionals who are proficient in the English
language (b 0:073, p , 0:05) and the Mandarin language (b 0:110, p , 0:05)
seem to have a better potential to absorb technology and innovation in the future,
especially at TPM. Meanwhile, local professionals with proficiency in the Japanese
language are able to absorb foreign expertise, mainly at Japanese MNCs at KHTP.
However, those who are proficient only in Malay have a negative effect on knowledge
inflow (see Table VII).
Conclusion and recommendation
Knowledge transfer taking place at science and technology parks in Malaysia
generates advantages for foreign MNCs and the local professional workforce. However,
knowledge-based outputs (patents) among the local professional workforce are still in
their infancy. On average, 20 percent of local professionals are able to submit their
inventions for patents, receive invention awards, and be consulted on innovation.
However, less than 10 percent of them actually earned a patent or published scientific
articles about their inventions. Comparatively, TPM is better in terms of innovation
output and knowledge transfer activities than MSC and KHTP. The researchers data
reveal that organizational training systems and personal time management are
influential and consistent factors for knowledge inflows within the two science
technology parks. Overall, these two factors have high significant coefficients. Local
Malaysian professionals prefer the transfer of knowledge to occur in a workplace

Knowledge
transfer

301

Table VI.
Comparative knowledge
inflows by country of
origin

Table VII.
Determinants of
knowledge inflows at
each science and
technology park
0.450
0.286 * * *
0.404 * * *
2 0.076
0.242 * *
2 0.143 *
0.173 * *
0.110 * *
0.036
0.030
2 0.087
2 0.012
0.721
14.348 * * *
73

0.405
0.078
0.083
0.086
0.098
0.074
0.072
0.035
0.068
0.057
0.084
0.008

Model 1
Error

b
1.218
0.237
0.266
0.188
0.282
0.166
0.208
0.104
0.154
0.183
0.289
0.018

Model 2
Error

21.355
1.766
0.597 * *
1.797
0.363
2.605
0.319
2.383
0.059
1.751
0.054
1.966 20.236
1.307
0.076
1.612
0.165
1.506
0.046
1.974 20.348
1.218
0.019
0.694
5.359 * * *
38

VIF

1.040
0.233
0.219
0.192
0.242
0.201
0.168
0.161
0.096
0.137
0.196
0.021

Model 3
Error

2 0.685
2.604
0.344
1.727
0.483 * *
2.429
0.038
2.051
0.127
1.518
0.139
1.437
0.034
1.415 2 0.317 *
1.534
0.188 *
1.790
0.145
2.039
0.280
1.187 2 0.038 *
0.597
4.174 * * *
43

VIF

Notes: Model 1, TPM; Model 2, MSC; Model 3, KHTP; *p , 0:10; * *p , 0:05; * * *p , 0:001

Constant
Workplace learning
Time management
Replication, adaptation, and innovation
Opportunities for self-development
Proficiency in Malay
Proficiency in English
Proficiency in Mandarin
Proficiency in Japanese
Proficiency in Arabic
Proficiency in German
Work experience
R2
F
n

0.418
0.087
0.088
0.084
0.107
0.076
0.075
0.043
0.051
0.063
0.087
0.008

Overall
Error
20.862
3.169
0.323 * * *
1.366
0.478 * * *
2.328
0.147 *
2.337
0.142
1.249
0.077
1.254
0.023
1.365
0.068
1.618
0.065
1.495
0.078
1.771 20.017
1.484 20.015 *
0.570
17.139 * * *
154

VIF

302

Independent variable

1.892
1.415
2.109
2.005
1.341
1.442
1.223
1.192
1.383
1.496
1.091

VIF

TLO
20,4/5

setting, which occurs via teamwork and individual learning. Teamwork consists of
local professionals working with the inventor of the technology, coupled with input
from other countries. The team is responsible for carrying out research projects, either
within the company or their parent company. Research projects funded jointly between
the company and government should be initiated to enhance local inventions. This
scheme could also happen with local university researchers. In the initial stages, the
company identifies potential teamwork to be guided and trained as an inventor. In
addition, appropriate time and activities for replication, adaptation, and innovation are
accepted as significant factors, as mentioned in previous studies. However, indicators
related to the replication, adaptation, and innovation activities affected only the overall
inflows of knowledge. Similarly, factors in self-development opportunities are
significantly affected only within TPM.
Several studies have accepted that foreign language proficiency has a substantial
impact on knowledge inflow, mainly from the parent company and peer subsidiary
companies that operate abroad. Japanese language proficiency had a significantly
effect only within MSC, while English was significant within TPM. This shows the
dominance of the country of origin of foreign direct investment in a particular location
and the utilization of a certain language. Proficiency in the local language alone does
not provide an advantage in terms of inflow of knowledge. Therefore, local
professionals need to gain mastery of international languages, especially those young
professionals who yearn for new expertise from abroad. Thus, an absorptive capacity
is the primary transmission mechanism of knowledge inflow to local professionals to
assimilate and replicate new knowledge gained from external sources. Hence,
collaboration with foreign experts within the firm will facilitate effective knowledge
transfer. Formally, this can be operationalized by working in teams with foreign
experts to optimize access to specific knowledge and expertise, mainly concerning the
most recent technological developments. These activities allow information exchange
among and between foreign experts and local professionals. For knowledge transfer to
succeed, companies must prepare their employees with skills and a positive attitude
that implies that the company is not only allowing them to learn, but also to teach other
company employees. Greater training incentives must be designed in such a way to
promote in-plant training or employee attachment at the parent company or foreign
peer subsidiaries. Therefore, local professional workforces will gain better knowledge,
international experience, and the latest technology development from MNCs. Empirical
evidence from previous research shows that information and communication
technology can facilitate the transfer of knowledge, but that topic is not covered in
this study. Communication, teamwork, and work autonomy are also among the
predictors that should be expanded in a future study of sustained knowledge transfer.
References
Argote, L. (1999), Organizational Learning: Creating, Retaining and Transferring Knowledge,
Kluwer Academic, Norwall, MA.
Argote, L. and Ingram, P. (2000), Knowledge transfer: a basis for competitive advantage in
firms, Organizational Behavior and Human Decision Processes, Vol. 82 No. 1, pp. 150-169.
Argyris, C. and Schon, D. (1978), Organizational Learning: A Theory of Action Perspective,
Addison-Wesley, Reading, MA.

Knowledge
transfer

303

TLO
20,4/5

304

Buckley, P.J., Clegg, J. and Tan, H. (2006), The Art of Knowledge Transfer: Secondary and
Reverse Transfer in Chinas Telecommunications Manufacturing Industry, Palgrave
Macmillan, Basingstoke.
Chiang, J.C.H. (2007), Subsidiary performance in MNCs: the influences of absorptive capacity
and social capital on knowledge transfer, doctoral dissertation, Nova Southern
University, Fort Lauderdale, FL.
Chua, A.L. and Pan, S.L. (2008), Knowledge transfer and organizational learning in IS offshore
sourcing, Omega, Vol. 36, pp. 267-281.
Cohen, W.M. and Levinthal, D.A. (1989), Innovation and learning: the two faces of R&D,
Economic Journal, Vol. 99 No. 397, pp. 569-596.
Cohen, W.M. and Levinthal, D.A. (1990), Absorptive capacity: a new perspective on learning and
innovation, Administrative Science Quarterly, Vol. 35 No. 1, pp. 128-152.
Connelly, B., Hitt, M.A., DeNisi, A.S. and Ireland, R.D. (2007), Expatriate and corporate-level
international strategy: governing with the knowledge contract, Management Decision,
Vol. 45 No. 3, pp. 564-581.
Dayasindhu, N. (2002), Embeddedness, knowledge transfer, industry clusters and global
competitiveness: a case of the Indian software industry, Technovation, Vol. 22,
pp. 551-560.
Downes, M., Thomas, A.S. and McLarney, C. (2000), The cyclical effect of expatriate satisfaction
on organizational performance: the role of firm international orientation, The Learning
Organization, Vol. 7 No. 3, pp. 122-134.
Eighth Malaysia Plan (2001), Eighth Malaysia Plan 2001-2005, National Printing Bhd, Kuala
Lumpur.
Foss, N.J. and Pedersen, T. (2002), Transferring knowledge in MNCs: the role of sources of
subsidiary knowledge and organizational context, Journal of International Management,
Vol. 8, pp. 49-67.
Gilbert, M. and Cordey-Hayes, M. (1996), Understanding the process of knowledge transfer to
achieve successful technological innovation, Technovation, Vol. 16 No. 6, pp. 301-312.
Gopalakrisnan, S. and Santoro, M.D. (2004), Distinguishing between knowledge transfer and
technology transfer activities: the role of key organizational factors, IEEE Transactions
on Engineering Management, Vol. 51 No. 1, pp. 57-69.
Gray, P.H. and Meister, D.B. (2006), Knowledge sourcing methods, Information and
Management, Vol. 43, pp. 142-156.
Gupta, A.K. and Govindarajan, V. (2000), Knowledge flows within multinational corporations,
Strategic Management Journal, Vol. 2, pp. 473-496.
Hair, J.F., Anderson, R.E., Tatham, R.L. and Black, W.C. (1998), Multivariate Data Analysis,
Prentice Hall, Englewood Cliffs, NJ.
Harzing, A.W. and Noorderhaven, N. (2006), Knowledge flows in MNCs: an empirical test and
extension of Gupta and Govindarajans typology of subsidiary roles, International
Business Review, Vol. 15, pp. 195-214.
Haunschild, P. and Miner, A.S. (1997), Modes of inter-organizational imitation: the effects of
outcome salience and uncertainty, Administrative Science Quarterly, Vol. 42, pp. 472-499.
Institute of Strategic and International Studies (2002), Knowledge-based Economy Master Plan,
Institute of Strategic and International Studies, Kuala Lumpur.
Jassimuddin, S.M., Klein, J.H. and Connell, C. (2005), The paradox of using tacit and explicit
knowledge: strategies to face dilemmas, Management Decision, Vol. 43 No. 1, pp. 102-112.

Juma, C. (2005), UN Millennium Project: Task Force on Science, Technology and Innovation,
Earthscan, London.
Kao, H., Kao, P.-H. and Mazzuchi, T.A. (2006), Taiwanese executive practice knowledge
management in Mainland China and Southeast Asia (Malaysia), Journal Information and
Knowledge Management System, Vol. 36 No. 3, pp. 341-352.
Kulim Hi-Tech Park (2008), KHTP investment guide, Kulim Hi-Tech Park Malaysia, Kulim.
Lin, W.B. (2007), Factors affecting the correlation between interactive mechanism of strategic
alliance and technological knowledge transfer performance, Journal High Technology
Management Research, Vol. 17, pp. 139-155.
Lubit, R. (2001), Tacit knowledge and knowledge management: the keys to sustainable
competitive advantage, Organizational Dynamics, Vol. 29 No. 4, pp. 164-178.
Lucas, L.M. (2006), The role of culture on knowledge transfer: the case of the multinational
corporation, The Learning Organization, Vol. 13 No. 3, pp. 257-275.
Mikkelsen, A. and Gronhaug, K. (1999), Measuring organizational learning climate:
a cross-national replication and instrument validation study among public sector
employees, Review of Public Personnel Administration, Vol. 19 No. 4, pp. 31-44.
Minbaeva, D.B. and Michailova, S. (2004), Knowledge transfer and expatriation in multinational
corporations, Employee Relations, Vol. 26 No. 6, pp. 663-679.
Multimedia Development Corporation (2008), K-workers, Multimedia Development
Corporation, Cyberjaya.
National Economy Advisory Council (2009), New economic model for Malaysia, Percetakan
Nasional Malaysia Berhad, Putrajaya.
Neter, J., Wasserman, W. and Kutner, M.H. (1983), Applied Linear Statistical Models, Richard
D. Irwin, Homewood, IL.
Ninth Malaysia Plan (2006), Ninth Malaysia Plan 2001-2005, National Printing Bhd, Kuala
Lumpur.
Nonaka, I. (1994), A dynamic theory of organizational knowledge creation, Organization
Science, Vol. 5 No. 1, pp. 14-37.
Nonaka, I. and Takeuchi, H. (1995), The Knowledge Creating Company, Oxford University Press,
New York, NY.
Powell, W.W., Koput, K.W. and Smith-Doerr, L. (1996), Inter-organizational collaboration and
the locus of innovation: networks of learning in biotechnology, Administrative Science
Quarterly, Vol. 41, pp. 116-145.
Prime Ministers Department (2011), Economic Transformation Programme: A Roadmap for
Malaysia, Performance Management and Delivery Unit, Prime Ministers Department,
Putrajaya.
Santoro, M. and Gopalakrishnan, S. (2000), The institutionalization of knowledge transfer
activities within industry-university collaborative ventures, Journal of Engineering
Technology Management, Vol. 17, pp. 299-319.
Seidman, W. and McCauley, M. (2005), Optimizing Knowledge Transfer and Use, Cerebyte Inc.,
Lake Oswego, OR.
Seventh Malaysia Plan (1996), Seventh Malaysia Plan 1996-2000, National Printing Bhd, Kuala
Lumpur.
Sixth Malaysia Plan (1991), Sixth Malaysia Plan 1991-1995, National Printing Bhd, Kuala
Lumpur.

Knowledge
transfer

305

TLO
20,4/5

306

Sparkes, J.R. and Miyake, M. (2000), Knowledge transfer and human resource development
practices Japanese firms in Brazil and Mexico, International Business Review, Vol. 9,
pp. 599-612.
Szulanski, G. (1996), Exploring internal stickiness: impediments to the transfer of best practice
within the firm, Strategic Management Journal, Vol. 17, pp. 27-43.
Szulanski, G. (2003), Sticky Knowledge: Barriers to Knowing in the Firm, Sage Publications,
London.
Tang, F.C., Mu, J.F. and MacLachlan, D.L. (2008), Implication of network size and structure on
organizations knowledge transfer, Expert Systems with Applications, Vol. 34,
pp. 1109-1114.
Tapscott, D. (1996), The Digital Economy: Promise and Peril in the Age of Networked Intelligence,
McGraw-Hill, New York, NY.
Tapscott, D. (1998), Growing up Digital: The Rise of the Next Generation, McGraw-Hill, New
York, NY.
Tapscott, D., Lowy, A. and Ticoll, D. (1998), Blueprint to the Digital Economy: Creating Wealth in
the Era of E-Business, McGraw-Hill, New York, NY.
Tenth Malaysia Plan (2010), Tenth Malaysia Plan 2011-2015, Economic Planning Unit,
Putrajaya.
Technology Park Malaysia (2008), Technology Park Malaysia, available at: www.tpm.com.my/
about.htm (accessed 2 July 2008).
Vance, C.M. and Paik, Y. (2005), Forms of the host-country national learning for enhanced MNC
absorptive capacity, Journal of Managerial Psychology, Vol. 20 No. 7, pp. 590-606.
Ward, M. (2007), How knowledge companies succeed, Journal Knowledge Management, Vol. 11
No. 6, pp. 16-27.
Zahra, S.A. and George, G. (2002), Absorptive capacity: a review and reconceptualization, and
extension, Academy of Management Review, Vol. 27 No. 2, pp. 185-203.
Further reading
Multimedia Development Corporation (2004), Annual report 2003, Multimedia Development
Corporation, Cyberjaya.

Appendix

Knowledge
transfer

307

Figure A1.
Knowledge inflows
questionnaire

Corresponding author
Abd Hair Awang can be contacted at: hair@ukm.my

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints

Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.