The literature review of foreign direct investment (FDI) in Portugal has not yet paid much attention to the importance of the innovation being created locally by foreign subsidiaries. To study this phenomenon, a list of foreign subsidiaries located in Portugal was cross-matched with public programs that support R&D activities. A combined total of 132 subsidiaries (total of 262 projects, with 929.4 million € of elegible expenses and 377.8 million € of incentives) had projects approved. A case-study was performed to understand how one subsidiary (Bosch Car Multimedia) has engaged in knowledge creation and transfer processes with local partners (University of Minho), as well as understanding the impact of this relationship on the Portuguese economy. The absorptive capacity, the knowledge stock of each partner and their history of interactions contributed to the establishment of the partnership. The innovation funnel of the company, together with inputs from the local partner, were decisive factors in the identification, analysis and validation of the project ideas. Having human resources with the ideal mind-set, an adequate governance model, along with the geographical proximity, that enabled frequent and broad-band communication, and local fiscal policies were key factors towards the success of an industry-university innovation project. The Portuguese economy benefited, exports have increased, fresh talent from universities is retained locally, local levels of employment rose and innovation was created leading to a positive image of the country as a prime R&D location.
- Multinationals
- Foreign subsidiaries
- Host countries
- Innovation
- Local knowledge creation and transfer
- Economic impact
- Mestrado em Economia Empresarial
Foreign subsidiaries and innovation: evidence from Portugal
Choupina, H. M. P. (Student). 30 Jun 2017
Student thesis: Master's Thesis