Collaboration in Innovation between Foreign Firms and Local Organizations : A Comparative Analysis

This article investigates patterns of collaboration in innovation between foreign firms and local partners in eight Latin American countries and Spain. Using microdata from the harmonized Latin American Innovation Surveys dataset (LAIS) and the Spanish Technological Innovation Panel (PITEC), it considers factors at micro and macro-levels to identify knowledge flows between local and foreign firms in host countries. The empirical evidence shows that technological strategies of foreign subsidiaries and national contexts are key elements in shaping local innovation collaboration with foreign-owned firms. Results indicate that when foreign investment is focused on creating and increasing the technological capabilities of an MNE, collaboration can strengthen the likelihood of positive knowledge spillovers in local economies. In the Latin American context, differences emerge depending on the types of partners engaged in collaboration. National systems of innovation also come into play in influencing collaboration patterns of foreign-owned firms, especially in systems with greater technological capabilities. This cross-national comparative perspective provides new insights regarding attraction of foreign direct investment and innovation policies in developing regions and beyond