Are Foreign Subsidiaries Cooperating for Innovation With Local Partners?

Abstract

In this chapter, a sample of firms active in the Spanish information and communication technology sector during 2003-2014 is analyzed to assess whether foreign subsidiaries are more prone than domestic firms to cooperate for innovation with local partners and ascertain which type of partners they prefer. Results of an econometric model show that foreign subsidiaries are more likely than unaffiliated domestic firms to cooperate for innovation with local partners but not more likely than domestic business groups, even when the size of the firm, the obstacles it faces to innovate, and other factors that may influence cooperation are all controlled. Statistical tests show that foreign subsidiaries prefer partnerships across the value chain. This preference is compared to that of domestic companies.