Firm innovation hinges on the ability to leverage geographically dispersed knowledge networks. While cross-border knowledge transfer enhances innovation, the interplay between cultural distance and knowledge transfer speed remains underexplored. This study bridges this gap by reframing cultural distance as a dynamic construct that can both hinder and enable innovation, depending on the pace of knowledge absorption. Drawing on the Knowledge-Based View (KBV), absorptive capacity, and dynamic capabilities literature, we propose that cultural distance fosters knowledge diversity, enriching firms’ innovation potential. However, its benefits are contingent upon rapid knowledge transfer, which mitigates risks associated with misalignment while enhancing the relevance and impact of knowledge. Using a sample of U.S.-based multinational corporations (MNCs) in technology-intensive industries from 2000–2015, we examine the impact of culturally distant reverse-knowledge transfer (RKT) on firm innovation. Controlling for firm age, size, R&D intensity, and slack resources, we find that rapid knowledge transfer amplifies innovation outcomes, as evidenced by higher forward citations for patents. Our findings challenge conventional wisdom that cultural distance primarily creates friction in knowledge transfer. Instead, we demonstrate that its complexities can be mitigated—and its advantages amplified—through accelerated absorption. This study contributes to theory by incorporating the temporal dimension of knowledge transfer into the KBV and absorptive capacity frameworks, highlighting the strategic importance of temporal agility in leveraging cultural diversity. These insights provide actionable implications for firms navigating global knowledge networks, emphasizing the need to prioritize speed in culturally distant knowledge absorption to foster high-quality innovation.
