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This paper analyzes the innovation performance of foreign subsidiaries compared to domestic owned firms using a firm level dataset of Colombian manufacturing firms. The results show that foreign subsidiaries are superior in knowledge productionover domestic firms and this superiority is because they make a more intensive use of internal and external knowledge inputs. However, when foreign subsidiaries are compared with national exporting companies the gaps in innovation performance is not as wide. Our findings can be seen as a new contribution that hightlights how the links between innovation and firm’s internationalization define a relevant relationship, important also for developing contexts

A COMPARATIVE ANALYSIS OF THE INNOVATION PERFORMANCE BETWEEN FOREIGN SUBSIDIARIES AND OWNED DOMESTIC FIRMS IN COLOMBIAN MANUFACTURING SECTOR