Multinationals, Innovation and Productivity: Old and New Paradigms and Implications for Industrial Dynamics

This article surveys the debate on the links between innovation, productivity and international production and draws some implications for the analysis of industrial dynamics. It is argued that international operations traditionally based on the exploitation of "ex ante" technological advantages tend to co-exist with cross-border activities which are aimed at learning and accumulating "ex post" advantages. The interaction between these two strategies entails a growing resort to a "double network" organisation of innovative activities, based on both internal linkages within multinationals and on the complementary development of external networks of relationships with foreign sources of knowledge. Moreover, this evolutionary pattern implies that multinationals accentuate their role as "bridging institutions" connecting different innovation systems.