Competitiveness of Spanish foreign subsidiaries

Purpose – The purpose of this study was to approach issues such as what type of value chain activities are carried on by the subsidiaries of multinationals located in Spain, where and how their resources and capabilities are generated and how these are transferred within the multinational. Creating resources and capabilities within a subsidiary of a multinational company enables it to gain competitiveness and therefore greater power of decision within the corporation. Design/methodology/approach – This research conducts a descriptive analysis of the value chain in Spanish subsidiaries. A population of 1,072 firms has been identified. To gather primary data, a questionnaire was designed based on international value chain and resources and capabilities literature. Findings – Analysis of the data gathered from 125 subsidiaries has enabled researchers to map out the profile of the value chain in these companies. The results indicate that the principal source of resources and capabilities is the subsidiary itself. Moreover, the experience built up over time is basic to the creation of skills in all the activities in the value chain. Practical implications – This is a matter of the subsidiaries identifying new opportunities to attain a new position or broaden their existing one. Social implications – Subsidiaries should benefit from favourable local policies to help them develop and strengthen their capabilities to obtain major international competitiveness. Originality/value – Although numerous studies assess the country's foreign direct investment flows, works concentrating on the presence of foreign capital in Spain are scarce. The growing interest in the international literature on the subsidiary as a unit of analysis makes this study interesting.