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Knowledge flows within emerging multinationals: the case of subsidiaries of Latin multinationals in Europe

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Examining the emergence of Latin American multinationals in Europe

Part of the success of emerging economies depends on whether their multinationals are able to manage knowledge flows across borders. An EU initiative explored how multinationalisation of developing countries' so-called emerging multinationals affects innovation and knowledge flows within and between them and their host economies.

Industrial Technologies icon Industrial Technologies

The rise of multilatinas – a group of emerging multinationals domestically run and based out of Latin America – is putting the business world on notice. Yet, very few studies have focused on the phenomenon of Latin American multinationals (LA-MNCs). With EU funding, the KNOWLEDGE FLOWS (Knowledge flows within emerging multinationals: The case of subsidiaries of Latin multinationals in Europe) project set out to identify knowledge flows to and from European subsidiaries of LA-MNCs by analysing knowledge exchange between them, their headquarters and host economies. To achieve its goals, the KNOWLEDGE FLOWS team conducted surveys at LA-MNC headquarters, performed case studies of European subsidiaries, and gathered primary and secondary data sources. Work began with the selection of 124 LA-MNCs that represented industries such as mining and commodities, pharmaceutical, cosmetics, automotive and aerospace. Financial, retail, telecommunication, media and transportation LA-MNCs were excluded. The rate of knowledge flow was analysed among 58 European subsidiaries of LA-MNCs. Results showed that subsidiaries exchange knowledge with their headquarters in both directions. Both conventional and reverse knowledge flows took place in over 70 % of the cases. They also revealed that knowledge exchange between subsidiaries and headquarters occurs more often than product exchange. LA-MNCs are benefiting from a European knowledge base and also bringing knowledge into European subsidiaries. Trade between affiliates of companies located in different countries is key to the transfer of knowledge, especially from Europe to Latin America. KNOWLEDGE FLOWS provided much-needed insight into the knowledge flows of LA-MNCs. In doing so, it uncovered factors that determine their success or failure. LA-MNCs possess knowledge-based competitive advantages that can be exploited in Europe, and this bodes well for both regions.


Latin American multinationals, knowledge flows, emerging multinationals, multilatinas, subsidiaries

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