MNCs' subsidiaries in emerging countries driving internationalisation and innovation: a case study in Brazil

This research explores the emerging flows of knowledge and innovation in MNCs, and focuses on the new roles attributed to their foreign subsidiaries. The main goal of the research is to identify and analyse the factors that influence subsidiaries' roles in regards to business internationalisation and innovation management. A case study was conducted in an Italian auto parts MNC, whose focal subsidiary in Brazil has been leading innovation management and its international expansion to the USA, Italy, Poland, India and China, responding to the whole technology and knowledge transfer. It was found that the key factors determining the participation of this subsidiary in these processes were: technical excellence in core technologies; expertise in strategic partnership management; competence in organisational learning; and distinctive abilities in knowledge management and diffusion. This is an illustrative case of reverse innovation, presenting knowledge and innovation flows from the Brazilian subsidiary to the parent company as well as other subsidiaries.