Two-way knowledge spillovers in the presence of heterogeneous foreign subsidiaries: evidence from an emerging country
International Journal of Emerging Markets
ISSN: 1746-8809
Article publication date: 10 August 2022
Issue publication date: 19 March 2024
Abstract
Purpose
This paper explains the mechanisms underlying the generation of two-way knowledge spillovers through the interaction of subsidiaries with differentiated local responsibilities and domestic firms.
Design/methodology/approach
The study is based on firm-level panel data from a census of Colombian manufacturing firms for the period 2003–2012. The estimation procedure involves two stages. In the first one, total factor productivity (TFP) of foreign and domestic firms is estimated. In a second step, we estimate conventional spillovers (from foreign-owned to local firms) and reverse spillovers (from local to foreign-owned firms) separately, using a random effect approach.
Findings
This study’s findings reveal that only locally creative subsidiaries enjoy positive and significant two-way knowledge spillover effects. The connectivity of subsidiaries to local and international networks is reinforced by reciprocal relationships among actors that enhance bidirectional knowledge flows, these being favored by the dynamics of clustering effects.
Originality/value
The paper contributes with new empirical evidence about the mechanism explaining how the technological heterogeneity of subsidiaries plays a determinant role in the generation of both knowledge flows from foreign to domestic firms and to the reverse, all integrated into the same framework.
Keywords
Citation
Albis Salas, N., Alvarez, I. and Cantwell, J. (2024), "Two-way knowledge spillovers in the presence of heterogeneous foreign subsidiaries: evidence from an emerging country", International Journal of Emerging Markets, Vol. 19 No. 4, pp. 895-920. https://doi.org/10.1108/IJOEM-11-2021-1690
Publisher
:Emerald Publishing Limited
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