Title: MNE-subsidiaries' innovation capability building and learning in emerging economies: firm-level evidence from the ICT industry in Brazil

Authors: Paulo N. Figueiredo; Klauber N. Brito

Addresses: Brazilian School of Public and Business Administration (EBAPE), Getulio Vargas Foundation (FGV), Praia de Botafogo, 190 5th Floor, office 510; 22.253-900 Rio de Janeiro RJ, Brazil. ' Brazilian School of Public and Business Administration (EBAPE), Getulio Vargas Foundation (FGV), Praia de Botafogo, 190 5th Floor, office 510; 22.253-900 Rio de Janeiro RJ, Brazil

Abstract: This paper is concerned with innovation capability accumulation paths and the role of learning processes in MNE-subsidiaries in emerging economies. Drawing on evidence from subsidiaries of the ICT industry in Brazil (1996-2008) we found: 1) variability across the subsidiaries in terms of the manner in which they improved their innovation performance over time; 2) such differences reflected heterogeneity across the subsidiaries in terms of their learning efforts to acquire knowledge through inter-organisational knowledge links; 3) although all seven subsidiaries developed such links, they achieved differing levels of innovation performance; 4) innovative subsidiaries responded pro-actively to the incentives from the local industrial policy. The paper suggests that in order to accumulate capabilities to move from |initially imitative| into highly innovative subsidiaries, the international intra-MNE knowledge links cannot be handled independently from local knowledge links.

Keywords: multinational enterprises; MNEs; subsidiary companies; innovative subsidiaries; capability accumulation; knowledge links; innovative performance; emerging economies; ICT industry; Brazil; information technology; communications technology; performance variability; heterogeneity; inter-organisational links; incentives; industrial policies; local links; innovation; learning.

DOI: 10.1504/IJIL.2012.044327

International Journal of Innovation and Learning, 2012 Vol.11 No.1, pp.12 - 43

Available online: 08 Dec 2011 *

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