THE INTERPLAY OF EXPATRIATES' PSYCHOLOGICAL AND SOCIAL CAPITAL FOR KNOWLEDGE TRANSFER 1

Expatriate managers are recognised as fundamentally important stakeholders in the process of transferring knowledge between headquarters and subsidiaries in multinational corporations (MNCs). This paper's goal is to determine how expatriates' personal capital (i.e. positive psychological capital and social capital) facilitates conventional and reverse knowledge transfer where there are language, cultural and geographical differences between headquarters and subsidiaries. A qualitative multiple case study approach was used to analyse the data, obtained by in-depth interviews with expatriates and managers from three MNCs. The findings suggest that psychological capital supports knowledge transfers in MNCs in two ways: first, directly and, second, through the creation of expatriates' social capital. This study shows that positive psychological capital dimensions of expatriates (efficacy, resilience and optimism) represent individual level antecedents of knowledge transfer between HQ and subsidiaries, thereby contributing to the literature on expatriates' boundary spanning role in MNCs. The results also indicate that psychological capital dimensions support creation of structural and relational dimensions of social capital, further enhancing knowledge transfer in MNCs, thereby advancing the literature on the role of expatriates' social capital in knowledge flows. By observing the relationships in different subsidiary types, this study also provides valuable implications for international knowledge management.