Title: Thinking locally: exploring the importance of a subsidiary-centred model of FDI-related spillovers in Brazil

Authors: Anabel Marin, Ionara Costa

Addresses: SPRU – Science and Technology Policy Research, University of Sussex, UK. ' UNU-MERIT, Rue Collinet 21, Vise 4600, Belgium

Abstract: This paper investigates FDI-related spillovers in Brazil. Contrasting to previous studies on other emerging economies, it found horizontal spillovers. However, spillovers did not arise simply as consequence of technology transfer from MNC headquarters as the standard approach presumes; nor were associated with differences in technological intensity across industries, in domestic firms| absorptive capability. Instead, spillovers were associated with particular kinds of localised knowledge-creation activities by subsidiaries. Those findings have both significant theory and policy implications. They help to make clear the explanatory limitations of the dominant |centrally-driven| perspectives, and point to the relevance of focusing on subsidiaries| technological behaviour in order to explain the existence or not of FDI-related spillovers. This implies that government policies aiming at simply attracting FDI do not ensure that FDI-related spillovers will automatically take place. Instead, effective policies on this matter should be concerned with the innovative behaviour of already established subsidiaries.

Keywords: FDI spillovers; subsidiaries; heterogeneity; localised innovation; Brazil; productivity; foreign direct investment; emerging economies; technology transfer; technological intensity; knowledge creation; policy.

DOI: 10.1504/IJTLID.2010.031055

International Journal of Technological Learning, Innovation and Development, 2010 Vol.3 No.1, pp.87 - 107

Published online: 19 Jan 2010 *

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