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Heterogeneous MNC subsidiaries and technological spillovers: Explaining positive and negative effects in India

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  • Marin, Anabel
  • Sasidharan, Subash

Abstract

One of the most intriguing aspects of the recent empirical literature on FDI-related spillover effects is the increasing identification of mixed results. A few studies, particularly in advanced countries have found positive effects; however, a more common scenario in recent studies is the prevalence of insignificant or even negative effects. This is despite the fact that theory predicts substantial positive effects in association with a supposed technological superiority of MNCs relative to domestic firms, particularly in the context of less advanced countries. In this paper, by distinguishing subsidiaries according to their orientation to carry out creative vs. exploitation activities in the host economy, we are able to distinguish situations with positive and negative spillover effects, and we explain why they may be emerging. More specifically, we find that only subsidiaries that are oriented to technologically creative activities have a significantly positive effect in India. In contrast, subsidiaries oriented mostly to technologically exploitative activities generate negative effects in some circumstances. The implications for theory and policy are discussed.

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  • Marin, Anabel & Sasidharan, Subash, 2010. "Heterogeneous MNC subsidiaries and technological spillovers: Explaining positive and negative effects in India," Research Policy, Elsevier, vol. 39(9), pages 1227-1241, November.
  • Handle: RePEc:eee:respol:v:39:y:2010:i:9:p:1227-1241
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    More about this item

    Keywords

    Technological spillovers MNCs Emerging economies Subsidiaries Heterogeneity;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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