‘Globalization of the Spanish Corporate Sector in Latin America: Subsidiaries, Springboards, Innovation and Local Spillovers’

Fidel León Darder, Esther Sánchez Peinado, Cristina Villar García, Angels Dasí Coscollar, Fariza Achcaoucaou Lallouchen and  Esmeralda Linares Navarro, University of Valencia; Anoop Madkhok, York University; Torben Pedersen, Bocconi University; and Paloma Miravilles Matamoros, University of Barcelona.

The project looks in depth at investment to Latin America through Spanish-based subsidiaries of multinational companies acting as extra‐regional headquarters. These subsidiaries come to be value-added creators and possessors of unique network competences, enabling them to identify local sources of competitive advantages that can be harnessed to boost their global competitiveness. It will also explore the mechanisms whereby these springboard firms create or access the knowledge needed to improve innovation performance, while examining the positive spillovers this kind of investment might generate in local markets.

 The project not only brings numerous novelties to the recent literature on the parent-subsidiary relationship, drawing at times on the literature on economic geography, competence development and innovation, it also proposes improvements to multinationals’ entry strategies in host regions from a more applied, empirical approach, through the use of intermediate management structures. This is especially important in the case of entry to emerging markets, where firms from more developed countries must cope with largely unregulated institutions, exposing them to a greater risk of value deterioration. Further, analysis of spillovers from these investments in Latin America may improve the image and legitimacy of Spanish investments.

 In sum, the proposal addresses the significant economic and social problem of how best to integrate institutions, multinationals and local firms within a relational framework that unlocks mutual benefits while improving business practices and conferring greater legitimacy on foreign investment.