The innovative activity of foreign subsidiaries in the Spanish Innovation System: An evaluation of their impact from a sectoral taxonomy approach

The aim of this paper is to contribute to a better understanding of the impact multinational enterprises (MNEs) innovative strategies have on the countries they localised their activities, particularly the so-called "intermediate countries". By using micro-data of the 2003 Spanish Innovation Survey we investigate the situation in the manufacturing sector. A new perspective of that impact arises from the elaboration of a sectoral taxonomy of sectors by combining their revealed technological advantage with the evolution of their technological position in the world during 1993-2003, using for both purposes data of patents granted by the USPTO. We found MNEs subsidiaries show noticeable coincidences with domestic enterprises, after controlling most important fixed effects, in the way they organise their innovative activities. The importance of belonging to a group is absolutely clear and discriminates sharply between the relationships of the firms with the system and the impact they produce. As far as factors are concerned, the crucial role of size and some related aspects (notably, capability of integrating inner and outer sources of knowledge and human resources and funds availability) must be underlined. However, factors, which have to do more with the organisation of innovation more directly are less significant to differentiate the possible impact for the innovation system. The importance of sectoral categories reach in many estimations validate the taxonomy proposed as a way of better understanding the relationships of MNEs with the Spanish Innovation System. (C) 2008 Elsevier Ltd. All rights reserved.