Regarding knowledge flow in MNEs, firms adopting the transnational strategy experience the highest knowledge interdependence while firms adopting the localization strategy experience the lowest.

Question

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This statement is true as firms adopting the transnational strategy aim to balance global integration and local responsiveness, leading to a high level of knowledge interdependence among different units and locations of the MNE. In contrast, firms adopting the localization strategy tend to focus on serving only local markets and may not have a strong need for cross-border knowledge sharing, resulting in lower knowledge interdependence. The transnational strategy involves a high level of coordination and knowledge sharing between different subsidiaries and headquarters, leading to a high degree of knowledge interdependence. In contrast, the localization strategy focuses on adapting to local markets and may limit knowledge sharing between subsidiaries, resulting in lower knowledge interdependence.

Regarding Knowledge Flow in MNEs, Firms Adopting the Transnational Strategy