Title: MNCs' subsidiaries in emerging countries driving internationalisation and innovation: a case study in Brazil

Authors: Renato Machado Costa; Marcos A.C. Bruno; Eduardo Vasconcellos; Luiz A.B. Da Silveira Junior

Addresses: Department of Business Administration at FEA/USP, University of São Paulo, Av. Prof. Luciano Gualberto, 908, 05508-900, São Paulo, Brazil ' SDA Bocconi School of Management, Bocconi University, Milan, Via Bocconi 8, I-20136, Italy; Department of Business Administration at FEA/USP, University of São Paulo, Av. Prof. Luciano Gualberto, 908, 05508-900, São Paulo, Brazil ' Department of Business Administration at FEA/USP, University of São Paulo, Av. Prof. Luciano Gualberto, 908, 05508-900, São Paulo, Brazil ' Department of Business Administration at FEA/USP, University of São Paulo, Av. Prof. Luciano Gualberto, 908, 05508-900, São Paulo, Brazil

Abstract: This research explores the emerging flows of knowledge and innovation in MNCs, and focuses on the new roles attributed to their foreign subsidiaries. The main goal of the research is to identify and analyse the factors that influence subsidiaries' roles in regards to business internationalisation and innovation management. A case study was conducted in an Italian auto parts MNC, whose focal subsidiary in Brazil has been leading innovation management and its international expansion to the USA, Italy, Poland, India and China, responding to the whole technology and knowledge transfer. It was found that the key factors determining the participation of this subsidiary in these processes were: technical excellence in core technologies; expertise in strategic partnership management; competence in organisational learning; and distinctive abilities in knowledge management and diffusion. This is an illustrative case of reverse innovation, presenting knowledge and innovation flows from the Brazilian subsidiary to the parent company as well as other subsidiaries.

Keywords: technological innovation; innovation management; MNC subsidiaries; reverse innovation; automobile industry; business internationalisation; Magneti Marelli Cofap; MM Cofap; emerging economies; Brazil; multinational corporations; automotive MNCs; knowledge flows; foreign subsidiaries; case study; Italy; automotive components; technology transfer; knowledge transfer; technical excellence; core technologies; strategic partnerships; strategic management; organisational learning; knowledge management; knowledge diffusion.

DOI: 10.1504/IJATM.2015.072881

International Journal of Automotive Technology and Management, 2015 Vol.15 No.4, pp.381 - 400

Received: 06 May 2014
Accepted: 28 May 2015

Published online: 05 Nov 2015 *

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