Abstract
This article explores the globalization of knowledge-based services and their impact on host-country firms’ organizational capabilities. Two drivers of such globalization—foreign aid and foreign direct investment coming from the United States—contributed to the development of engineering consulting in Spain in the beginning of the new global economy. The largest Spanish engineering firms have been able to integrate imported knowledge into their own organizational capabilities, enabling them to compete successfully in international markets. This imported knowledge was disseminated in two ways: through private companies, via affiliates and strategic alliances between locals and foreigners; and through the technical and military aid the U.S. government provided during the Cold War.
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