Most countries adopt policies in order to attract foreign multinationals, stimulate industrial clustering and to foster innovation. This book links these topical issues. It examines the activities of multinational enterprises, their contribution to cluster development, how they stimulate linkages with domestic firms and contribute to innovation. The efficiency, appropriateness and sufficiency of these policies is discussed, and practical proposals made throughout the volume. New empirical evidence is provided on a variety of industries and country contexts.

ANA TERESA TAVARES is Assistant Professor at the University of Porto (CEMPRE, Faculty of Economics), Portugal. She has been a Visiting Professor in several international universities. Her areas of specialization include multinational subsidiaries' strategies and evolution, the impact of multinationals on host economies, and FDI-related policies. She has published widely on these topics in international journals and books, and has been a consultant to various institutions on regional development and on FDI policy.

AURORA TEIXEIRA is Assistant Professor at the University of Porto (CEMPRE, Faculty of Economics), Portugal. Her areas of interest include innovation policy, human capital and growth-related policies. She has published on these topics in international journals and has a prize winning book on the role of human capital and innovation on Portuguese long-term economic growth.

Introduction--A.Teixeira & A.T.Tavares * PART ONE: MULTINATIONALS AND INNOVATION * Knowledge Flows Between Multinational Enterprises and National Innovation Systems: The Case Of Austria--B.Dachs & B.Ebersberger * Do External Knowledge Spillovers Induce Firms' Innovations?: Evidence from Slovenia--J.P.Damijan, A.Jaklic, M.Rojec * Product Innovation as a Source of FDI Spillovers?: The Case of Chinese State-Owned Enterprises--S.Girma, Y.Gong & H.Görg * Obstacles to Innovation and Multinational Firms in the Italian Regions: Firm-Level Evidence from the Third Community Innovation Survey--S.Iammarino, F.Sanna-Randaccio & M.Savona * PART TWO: CLUSTERS AND INDUSTRIAL DEVELOPMENT * Evolution of Industry Clusters Through Spin-offs and the Role of Flagship Firms--M.P.Ferreira, A.T.Tavares & W.Hesterly * Promoting Industrial Clusters: Evidence from Ireland--A.M.Gleeson, F.Ruane & J.Sutherland * Emerging Business Models for Biotechnology Firms and Clusters: Policy Responses in Peripheral Regions of the EU--E.Peters & S.Young * PART THREE: LINKAGES BETWEEN MULTINATIONALS AND LOCAL FIRMS * Determining Factors of Subsidiary Development--T.Pedersen * Subsidiaries, Knowledge Development and MNE Re-Investments--U.Andersson & M.Persson * Is Government Support Really Worth It?: Developing Local Supply Linkages in Malaysia--A.Giroud * PART FOUR: INNOVATIONS AND LINKAGES * Globalisation of Innovative Capabilities in the Late-Industrialising Context: Evidence from Local Firms and TNC Subsidiaries in Brazil--P.N.Figueiredo * Assessing Value Creation and Backward Linkages in Foreign Investment: A Combination of Macro and Micro Tools--T.Morais da Costa, A.Videira & F.Veloso * International Buyer-Supplier Relationships, Transfer of Knowledge and Local Suppliers Capability--C.A.Varum * PART FIVE: POLICY ISSUES * Multinational Subsidiaries and Innovation Policy in Central and Eastern Europe: Alignment and Autonomy--K.Männik & N.von Tunzelmann * Effective Tax Rates as a Determinant of Foreign Direct Investment in Central and Eastern European Countries: A Panel Analysis--C.Bellak & M.Leibrecht * Multinationals and National Systems of Innovation: Strategy and Policy Issues--R.Pearce & M.Papanastassiou * Conclusions and Policy Issues--A.T.Tavares & A.Teixeira

Introduction--A.Teixeira & A.T.Tavares * PART ONE: MULTINATIONALS AND INNOVATION * Knowledge Flows Between Multinational Enterprises and National Innovation Systems: The Case Of Austria--B.Dachs & B.Ebersberger * Do External Knowledge Spillovers Induce Firms' Innovations?: Evidence from Slovenia--J.P.Damijan, A.Jaklic, M.Rojec * Product Innovation as a Source of FDI Spillovers?: The Case of Chinese State-Owned Enterprises--S.Girma, Y.Gong & H.Görg * Obstacles to Innovation and Multinational Firms in the Italian Regions: Firm-Level Evidence from the Third Community Innovation Survey--S.Iammarino, F.Sanna-Randaccio & M.Savona * PART TWO: CLUSTERS AND INDUSTRIAL DEVELOPMENT * Evolution of Industry Clusters Through Spin-offs and the Role of Flagship Firms--M.P.Ferreira, A.T.Tavares & W.Hesterly * Promoting Industrial Clusters: Evidence from Ireland--A.M.Gleeson, F.Ruane & J.Sutherland * Emerging Business Models for Biotechnology Firms and Clusters: Policy Responses in Peripheral Regions of the EU--E.Peters & S.Young * PART THREE: LINKAGES BETWEEN MULTINATIONALS AND LOCAL FIRMS * Determining Factors of Subsidiary Development--T.Pedersen * Subsidiaries, Knowledge Development and MNE Re-Investments--U.Andersson & M.Persson * Is Government Support Really Worth It?: Developing Local Supply Linkages in Malaysia--A.Giroud * PART FOUR: INNOVATIONS AND LINKAGES * Globalisation of Innovative Capabilities in the Late-Industrialising Context: Evidence from Local Firms and TNC Subsidiaries in Brazil--P.N.Figueiredo * Assessing Value Creation and Backward Linkages in Foreign Investment: A Combination of Macro and Micro Tools--T.Morais da Costa, A.Videira & F.Veloso * International Buyer-Supplier Relationships, Transfer of Knowledge and Local Suppliers Capability--C.A.Varum * PART FIVE: POLICY ISSUES * Multinational Subsidiaries and Innovation Policy in Central and Eastern Europe: Alignment and Autonomy--K.Männik & N.von Tunzelmann * Effective Tax Rates as a Determinant of Foreign Direct Investment in Central and Eastern European Countries: A Panel Analysis--C.Bellak & M.Leibrecht * Multinationals and National Systems of Innovation: Strategy and Policy Issues--R.Pearce & M.Papanastassiou * Conclusions and Policy Issues--A.T.Tavares & A.Teixeira

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