Managing knowledge flows in MNCs: Elastic Employment Contracts presents an original model for creating an internal mechanism to prevent knowledge "stickiness" and promote the internal flow of positive knowledge between the subsidiaries of a multi-national corporation. This model, "the Elastic Employment Contract" integrates well-known variables from the fields of international management, compensation and principal-agent theory. This study contributes to the literature on international management and to the research methods for studying international business. Its conclusions bring an interesting economic result to light and are very relevant for readers concerned with managerial compensation. The Elastic Employment Contract described in this book is an efficient internal mechanism for MNCs that want to promote a constant flow of knowledge with positive value between subsidiaries; it will help them design more effective employment contracts.