This study demonstrates how reverse knowledge transfer (RKT) explains inter-firm variations in productivity performance of multinational companies (MNCs) investing in foreign R&D. More specifically, it investigates the factors that influence the extent to which knowledge transfer from foreign units to parent companies (RKT) enhances the productivity performance of the MNC at home. Based on interviews and regression analyses using detailed firm data from Swiss manufacturing, we found evidence that (a) well integrated foreign units in the whole company through close management cooperation with their parent companies contribute in enhancing RKT process. (b) The effect of RKT is higher when parent companies have high technological capacities.