Are ‘the best’ foreign subsidiaries cooperating for innovation with local partners? The case of an intermediate country

Abstract

We analyse a sample of firms that are representative of Spanish manufacturing industry, in order to understand the relationship between foreign status and local cooperation for innovation. We focus on foreign subsidiaries (FS) displaying innovation intensity, newness of technology or the ability to build complex networks with local innovators. Foreign status increases the probability of local cooperation for innovation. However, FS displaying these characteristics are not necessarily more prone to cooperate locally for innovation than similar affiliated domestic firms. The distribution of cooperative FS tends to be even across sectors and this is confirmed for advanced FS. This suggests that FS look for general capabilities in local partnerships, rather than for specific expertise. The strategies of domestic affiliated firms seem to influence the relationship between foreign status and local cooperation for innovation.