Background: In nowadays economy, the only certainty is that knowledge is source of lasting competitive advantage. The increasing global competitive business environment triggers firms to establish inter-firm cooperation with cross-border partners possessing complementary assets. However, knowledge management is a difficult concept to put in practice. Knowledge integration is a complex process hindered by several sets of complications specific to knowledge and relations between partners. In addition, the cultural dimension seems to influence knowledge integration across borders. Cultural differences between partner-firms may have a considerable impact on the transfer and integration of knowledge.

Aim: Researchers have mainly focused on seeking out the outcome of developing knowledge integration, such as innovation or product development. However, the importance of contextual factors, such as culture, and their potential implications on knowledge integration across borders remain unexplored. The contribution of this study addresses the impact of culture on knowledge integration across borders. In addition, the model developed along this study provides a ground for future research. As a spin-off, the motive of this theoretical research is to raise awareness of cultural factors in cross-border cooperation.

Methodology: This thesis is based on a qualitative case study method that intends to build theory through iteration by analyzing literature and empirics following an inductive reasoning, in the specific context of Sino-Swedish cooperation. The research design builds upon the collection of primary data through interviews within the case company. Data analysis utilizes the open coding system; findings are presented through direct quotations, tables and models.

Results: The results show that knowledge integration – its nature and coordination within and between firms – is influenced by cultural factors. The study finds that the cultural dimension can affect the efficiency of knowledge integration. Although literature is aware of culture, specific cultural factors still impact on organizations involved in cross-border cooperation at different levels. This creates cultural distance between partner-firms, and provokes major implications on group work, which in turn can potentially affect cooperation performance.