Headquarters to subsidiary transfer effects on marketing strategy exploitation

The transfer of locally created marketing strategies worldwide represents a key competitive advantage for multinational corporations (MNCs). Although a research topic of much interest, empirical content of past studies is scarce. Absorptive capacity studies typically test direct effects of either the transfer capacity of the strategyʹs initiator or the recipientʹs ability to process and exploit the strategy on related learning outcomes. Mixed findings allow the possibility of more complex relationships. This study examines the relationships between MNC headquarters and marketing units located in subsidiary firms using a sample of 213 marketing managers. The study systematically explores linear, interaction, and quadratic effects within a structural equation modeling paradigm. The findings indicate that the relationship between a MNC headquartersʹ transfer capacity and a subsidiary marketing unitʹs processing capacity on the strategyʹs exploitation is one of mediation and moderation. The subsidiary marketing unitʹs processing capacity is a key mediating variable and headquartersʹ transfer capacity moderates the effects of this variable on the exploitation of the marketing strategy by the subsidiaryʹs unit.