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

Paulo N. Figueiredo and Klauber N. Brito

International Journal of Innovation and Learning, 2012, vol. 11, issue 1, 12-43

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. (search for similar items in EconPapers)
Date: 2012
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