Thinking locally: Exploring the importance of a subsidiary-centered model of FDI-related spillovers in Brazil
Anabel Marin & Ionara Costa
#2009-008
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.
Keywords: FDI spillovers; subsidiaries; heterogeneity; localized
innovation; Brazil; productivity.
JEL codes: O3, O4, O1
UNU-MERIT Working Papers
ISSN 1871-9872