The impact of cross-border knowledge management on internationalizing Renminbi: lessons from the belt and road initiative

ABSTRACT

PurposeIn the process of Renminbi (RMB) internationalization, the heterogeneity and complexity in knowledge under the multicultural contexts have been considered as important factors that can have profound impacts on the cross-border flow of the RMB currency. Moreover, COVID-19, an exogenous shock, also triggers more in-depth reflection on the relationship between cross-border knowledge management and the financial risk governance. In addition, the needs to effectively respond to global risks and crises prompt the necessity in systematically establishing an effective cross-border knowledge management mechanism and innovatively solidifying the knowledge bases needed for the further internationalization of the RMB.Design/methodology/approachBased on the analysis on the current status of the RMB internationalization, this paper qualitatively explores some major challenges and difficulties encountered in the process of RMB internationalization from the perspectives of knowledge management and cross-cultural theories. To effectively mitigate these challenges and difficulties, discussions and recommendations centered on three main aspects cross-cultural management;cognition;and innovation for the further development of the RMB internationalization are also presented in this paper.FindingsBased on the analysis on the cross-border knowledge management and cross-cultural perspectives, this paper identifies three major challenges and difficulties that the RMB internationalization is encountering, including cultural heterogeneity and its adverse impacts on the communication amongst economic entities;the existence of knowledge iceberg;and the difficulty it presents to cognition and financial innovation. Meanwhile, the authors also present recommendations on the development of the cross-border knowledge management mechanism for furthering the progress of internationalizing the RMB currency.Research limitations/implicationsFrom the perspective of cross-border knowledge management, this study not only elaborates on the recommendations aimed at further promoting the RMB internationalization but also provides reference and guidance for the state, central banks and commercial banks to play better roles in furthering the RMB internationalization.Originality/valueThis paper creatively integrates the micro knowledge management into the macro process of RMB internationalization, thoroughly discusses two main challenges and difficulties encountered in the process of RMB internationalization from the unique perspective of cross-border knowledge management under the multicultural contexts and provides relevant recommendations for RMB’s further internationalization. This study also enriches the exploration of knowledge management outcome variables and further expands the research field of knowledge management.