List of Figures List of Tables Notes on Contributors 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.Goerg 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 Globalization 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.Mannik & 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 Index