Knowledge is recognized as a crucial company asset and a competitive advantage both by classical and contemporary management and international business literature (Grant, 1996; Kogut & Zander, 1993; Rugman & Verbeke, 2001; Tallman & Phene, 2007; Tseng, 2009). In a time when physical resources are limited, approaches to increasing companies’ performance and efficiency depend on restructuring and reconfiguring companies’ technological processes and successful knowledge management. This is additionally driven by the development of global business activities. Effective knowledge management is thus currently a crucial concern of companies worldwide, and the topic of the thesis is one of its important elements, knowledge transfer, pertinent especially for multinational enterprises. As the study of knowledge is necessarily interdisciplinary, this doctoral thesis combines two research fields, business and human resource management, and presents the findings from both. Despite the fact that in real life these topics are highly intertwined, academic literature often presents them separately. Knowledge and innovations are placed high in the Republic of Croatia development strategy (Ministry of Economy, 2014), aiming to transform it into a knowledge based economy. Croatia is a small country with unfavorable infrastructure, which slows down the transition of Croatia to knowledge based economy and make it partly dependent on foreign involvement. In transition economies which lack own knowledge resources, foreign investments are usually accompanied by knowledge transfers. The thesis tried to establish the existence of a similar process in Croatia, looking specifically at expat managers of multinational enterprises as drivers of knowledge transfer. The thesis starts with an introduction, followed by a theoretical overview which sets the research framework, and is divided into three chapters. The second chapter deals with various definitions and taxonomies of knowledge, after establishing that there is no one definition of knowledge nor general agreement on the framework in which it should be studied. The working definition offered in this thesis, of knowledge as a precursor (Yang et al., 2008) to know-how and capabilities that refer to a firm’s capacity to deploy resources to affect a desired end, is explained. The third chapter focuses on multinational companies as knowledge repositories. It is explained why this thesis adopts the network perspective on the MNC, observing it as a set of different units operating around the world, where differentiation across units of the network allows them to achieve the goals of efficiency and innovation. According to this perspective, as argued by Yamin & Andersson (2011), MNCs’ knowledge resides in units’ internal and external network, and depends on the level of unit embeddedness. Knowledge bases of MNC units differ, which creates space for intra-organizational knowledge transfer. Knowledge flows in both directions: from parents to subsidiaries, as well as from subsidiaries to the parent; the latter type of knowledge transfer is usually termed the reverse knowledge transfer. Extensive overview of literature on expatriate managers, as well as factors affecting them while transferring knowledge, is provided in the fourth chapter. Bibliometric research on knowledge transfer using expatriate managers is discussed, and it is shown that last five years indicate a growing number of articles on knowledge transfer using expatriate managers. This thesis consists of two research questions elaborated through five hypotheses. The first research question arises from the network perspective on MNCs and tests the existence of a bi-directional knowledge flow. MNCs are observed as networks of geographically dispersed units where differentiation across units of the network allows them to achieve the goals of efficiency and innovation (Foss et al., 2012), which implies the necessity of mutual knowledge exchange. The second research question focuses on the role of expatriate managers as a mechanism of knowledge transfer. It is based on the `state of the art` approach in explaining intra-organizational knowledge flow, emphasizing international assignees’ competences (Chang et al., 2012) as a main instrument for increasing multinational companies’ global competence. While providing valuable insights into the reverse knowledge transfer process and the role of expatriate managers in it, this thesis also met some limitations. It looked at all MNC subsidiaries operating in the Republic of Croatia, disregarding the differences in industries in developing the measurement instrument. The number of expatriate managers in the Republic of Croatia is relatively small and decreasing, which affected the sample size. The methodological approach used in this thesis was cross-sectional, primarily due to the limitations in time and funding, while a longitudinal approach would be better suited for studying the knowledge transfer, which is a time consuming process. The thesis presents the first study of this type done in the Republic of Croatia and describing the relationship between expatriate managers competences, reverse knowledge transfer and knowledge characteristics. Using the model discussed above, it provides an extensive and comprehensive overview of the nature of expatriates assigned to the Republic of Croatia, as well as their role in knowledge flow in Croatian subsidiaries of multinational companies. The contribution of this thesis goes beyond the development and empirical research of a conceptual model of intra-organizational knowledge transfer. The research emphasizes the importance of globalization and standardization of knowledge market. In addition, subsidiaries are offered insight into expatriate managers’ importance, which provides basis for an appropriate strategy of efficient knowledge management in MNCs. Finally, this thesis opens up space for new research in the field of knowledge management in multinational companies not only in the Republic of Croatia, but also in transition countries in general.