R&D Investments in an Emerging Economy – an analysis on driving forces versus type of R&D in Brazil

Abstract

This paper aims to present an analysis of the relationship between the driving forces that directed and maintained R&D activities in subsidiaries of multinationals enterprises (MNE) in Brazil and their complexity. For this, we used two complementary lines of investigation in a multiple case study with 54 subsidiaries of foreign MNE. First, a crosssectional analysis is made between the complexity of R&D and the driving forces (market or technological) to choose those subsidiaries in which to allocate technological innovation functions. In the second line, a cross-sectional analysis is done between the driving forces and the type of product developed by the subsidiary, especially in relation to its geographic scope (local or global product). The results showed that the valorization of technologyoriented factors is inversely proportional to the complexity of R&D activities conducted by the subsidiary in the country. We also observed that subsidiaries which are product or technology owner in the corporation valued less technology-oriented factors and more market-oriented factors than the ones whose R&D is for local product development. The conclusion is that market is what attracted and maintained R&D at Brazilian subsidiaries with more competence created. They do not consider the technological potential installed at the local environment.