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Thinking locally: Exploring the importance of a subsidiary-centered model of FDI-related spillovers in Brazil

Author

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  • Marin, Anabel

    (SPRU, University of Sussex)

  • Costa, Ionara

    (UNU-MERIT)

Abstract

This paper investigates FDI-related spillovers in Brazil for the period 1996-2005. In contrast to most previous recent studies, which have failed to identify any significant effects in emerging economies, we found that horizontal spillovers did arise in Brazil. However, they did not arise simply as a consequence of general FDI-mediated technology transfer from MNC headquarters, as the standard approach presumes. Nor were they associated with expected inter-industry differences in technological intensity, or with differences in domestic firms’ absorptive capability. Instead, spillovers were associated with the existence of particular kinds of localized knowledge-creation activities undertaken by subsidiaries. We discuss the theory and policy implications that emerge from these results.

Suggested Citation

  • Marin, Anabel & Costa, Ionara, 2009. "Thinking locally: Exploring the importance of a subsidiary-centered model of FDI-related spillovers in Brazil," MERIT Working Papers 2009-008, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2009008
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    Cited by:

    1. Moralles, Herick Fernando & Moreno, Rosina, 2020. "FDI productivity spillovers and absorptive capacity in Brazilian firms: A threshold regression analysis," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 257-272.
    2. Isabel Álvarez & John Cantwell, 2011. "International Integration and Mandates of Innovative Subsidiaries in Spain," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(3), pages 415-444, October.
    3. Anagaw Derseh Mebratie & Arjun S. Bedi, 2013. "Foreign direct investment, black economic empowerment and labour productivity in South Africa," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(1), pages 103-128, February.
    4. Sarker, Bibhuti & Serieux, John, 2022. "Foreign-invested and domestic firm attributes and spillover effects: Evidence from Brazil," Journal of Multinational Financial Management, Elsevier, vol. 63(C).

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    More about this item

    Keywords

    FDI spillovers; subsidiaries; heterogeneity; localized innovation; Brazil; productivity; innovation;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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