Firms from emerging countries are increasingly expanding their global presence by directly investing abroad and becoming multinationals on their own right. Those so-called emerging multinationals (E-MNCs) are gaining space in the global business arena, largely dominated by multinationals from the triadic countries. Studies so far have focused on the factors driving E-MNCs to engage in foreign direct investment. A central issue is whether the E-MNCs possess competitive advantages that can be exploited abroad, or if they are in fact seeking for acquiring and developing such advantages overseas. This research proposal intends to bridge a gap in the research on E-MNCs by focusing on the European subsidiaries of Latin American MNCs (LA-MNCs). It addresses the question of how multinationalisation of developing countries’ firms affects innovation and knowledge flows within them, and between them and their host economies. Our objective is to identify the patterns of knowledge flows to and from the European subsidiaries of LA-MNCs by analyzing the exchange of knowledge between them and: 1) their headquarters, and 2) host economies. The main expected outcome of this study is the understanding of to what extent the European subsidiaries of LA-MNCs: 1) send knowledge to and receive knowledge from their parent headquarters in Latin America; and 2) source in and contribute with positive spillovers to the knowledge base of their European hosts. This research proposal deals with highly complex phenomena, innovation and multinational corporations; it is interdisciplinary and multidisciplinary in essence, and integrates concepts and methods from several fields of economics and international business. The methodological approach combines different methods and sources of information. We will carry out both a survey of headquarter of LA-MNCs and multi-case studies of European subsidiaries of LA-MNCs; and rely on both primary and secondary sources of quantitative and qualitative data.
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