Innovation Performance And Local Embeddedness Of MNE-Subsidiaries: Evidence From Brazil

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This paper examines the innovation performance of MNE subsidiaries and their embeddedness in sources of local knowledge and in a policy framework within the context of an emerging economy. Based on first-hand evidence from multiple case studies the authors found that: There was variability between the subsidiaries in terms of the cumulative manner and speed at which they improved their innovation performance over time. These differences in innovation performance improvement reflected heterogeneity between the subsidiaries in terms of the learning efforts made by them to acquire knowledge from local organisations; the varied frequency in which the subsidiaries developed such local relationships reflects their differing responses to a common industrial policy that makes use of tax incentives to stimulate such links.