Absorptive Capacity and International HRM from an Emerging-market Economy Perspective.

This study extends an existing theoretical framework for absorptive capacity to an Asian emerging market economy context through an empirical investigation of knowledge transfer in a cross-section of automotive manufacturers (cars, motorcycles and autoparts). The results of two phases of qualitative data collection in Japan and Indonesia reveal that intensity of foreign ownership and involvement positively affects subsidiaries' absorptive capacity and HRM practices. These in turn have varying effects on the transformation and exploitation of Japanese systems of work in Indonesian subsidiaries. Inter-human relationships foster Japanese knowledge transfer by promoting inter- and intra- organizational knowledge inflows and an important characteristic of absorptive capacity. The level of foreign ownership and involvement and the length of foreign management presence also impact on both employees' abilities and motivation, and the use of organizational tools. [ABSTRACT FROM AUTHOR]