Active MNC ’ Subsidiaries and Technology Diffusion in Late Industrialising Countries: the cases of Argentina and India

ANABEL MARIN; SUBASH SASIDHARAN; IONARA COSTA

Kerala, India

Conferencia; GLOBELICS India 2006: Innovation Systems for Competitiveness and Shared Prosperity in Developing Countries; 2006

CENTRE FOR DEVELOPMENT STUDIES

This paper is about technological spillover effects from FDI. It questions some of the well-established assumptions of conventional views on this topic. In particular it questions the assumption that the main source of FDI-related spillovers derives from the technological assets created by parent companies. It follows earlier work by Marin and Bell (2006) in Argentina which indicated that, in contrast to much recent research, FDI-related spillovers did arise during the 1990s (Marin and Bell, 2006). However, this occurred under specific circumstances, not simply as a consequence of general FDI-mediated technology transfer from parent companies. We found that spillovers were strongly associated with the existence of significant knowledge-accumulation activities undertaken by local subsidiaries themselves, a relationship which has not often been previously recognised or explored. These results were however observed in one country and one set of circumstances: Argentina in the mid 1990s. Our purpose in this paper is to extend and deepen the analysis, to another country and another set of circumstances. This allows us to both control for country-specific characteristics and exploit and explore relevant differences across countries and periods of time.