Unintentional, Unavoidable, and Beneficial Knowledge Leakage from the Multinational Enterprise

Knowledge leakage as an undesirable outcome for MNEs is an accepted view in IB literature. We challenge this view and argue that knowledge leakage is often unintentional, unavoidable, and beneficial for the MNE. In a highly networked and information-rich society, knowledge leakage from MNEs (1) happens naturally due to interfirm relationships, interactions, and socialization, (2) is unavoidable due to employee mobility, and (3) facilitates knowledge inflows due to the reciprocity nature of knowledge exchange and hence is beneficial for MNEs. In addition, the costs of protecting knowledge incurred by an MNE will often outweigh the benefits.