Bridging Knowledge Gaps: Returnees and Reverse Knowledge Spillovers from Chinese Local Firms to Foreign Firms

Abstract

Adopting a knowledge-based perspective and embeddedness theory, this study examines the impact of reverse knowledge spillovers from local Chinese firms to foreign firms using a sample of high-tech firms in Zhongguancun Science Park in China. It also investigates whether returnees in foreign firms help bridge knowledge gaps between local firms and foreign firms. The results show that the presence of returnee CEOs and returnee employees enhances the impact of reverse technological and marketing spillovers on the innovation and financial performance of foreign firms. The findings call for more studies on the social dimensions of knowledge spillovers across international boundaries and have important theoretical and practical implications.