Policies to Attract R&D-related FDI in Small Emerging Countries: Aligning Incentives With Local Linkages and Absorptive Capacities in Chile

Research output: Contribution to journalArticle


Over the last decade we have witnessed an unprecedented growth in the number of cross-border R&D investments towards large emerging countries such as China and India. However, small middle-income countries have played a marginal role as recipients of R&D-related FDI despite increasing policy efforts. In particular, several Latin American countries have recently launched new policy programs with the aim of attracting this kind of investments, but it remains uncertain whether public incentives can be useful to compensate for other locational disadvantages. The case of Chile provides an interesting empirical setting to explore these issues because during the last decade its government has been actively promoting R&D-related FDI through a new policy mix. This article suggests that for national innovation systems to benefit from the attraction of internationally-mobile R&D it is critical for public policies to ensure that appropriate linkages are established with local actors that hold absorptive capacities. Equally important for a small emerging economy like Chile is to prioritize R&D-related FDI in strategic technology niches where the country can realistically attain critical mass.


External organisations
  • Autonomous University of Madrid
  • Production Development Corporation (CORFO)
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economic History
  • Economic Geography
Original languageEnglish
Pages (from-to)165-178
JournalJournal of International Management
Issue number2
Publication statusPublished - 2018
Publication categoryResearch