The Heterogeneity of MNC’ Subsidiaries and Technology Spillovers: Explaining positive and negative effects in emerging economies

Marin, Anabel and Sasidharan, Subash (2008). The Heterogeneity of MNC’ Subsidiaries and Technology Spillovers: Explaining positive and negative effects in emerging economies. UNU-MERIT.

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  • Author Marin, Anabel
    Sasidharan, Subash
    Title The Heterogeneity of MNC’ Subsidiaries and Technology Spillovers: Explaining positive and negative effects in emerging economies
    Publication Date 2008
    Publisher UNU-MERIT
    Abstract Conventional models of multinational corporation (MNC) related spillovers in host economies assume that they derive from the technological assets created at the headquarters. Subsidiaries’ activities in the host economy are not given any role in this process. In this paper, drawing on recent advances in MNC literature, we propose an alternative model. In this alternative model the local innovative activity of subsidiaries plays a critical role in accounting for both the possibility of positive or negative effects. More specifically, we distinguish between three types of subsidiaries: ‘competence creating’, ‘competence exploiting’ and passive; and explore conceptually and empirically the spillover effects of each type. Our results confirm our predictions that, in less advanced contexts such as India, only creative subsidiaries have a positive effect on host country firms; that competence exploiting subsidiaries generate negative effects when domestic firms are more advanced; and passive subsidiaries have no effects. The implications for theory and policy are discussed.
    Keyword Technological spillovers
    MNCs
    Emerging economies
    Subsidiaries heterogeneity
    JEL O3
    O4
    O1
    Copyright Holder UNU-MERIT
    Copyright Year 2008
    ISSN 1871-9872
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    Created: Wed, 11 Dec 2013, 16:23:46 JST