Abstract
The increasing appreciation of the role of multinational corporations (MNCs) in the generation of technology across national boundaries has been facilitated by the recent trend for MNCs to establish internal and external networks for innovation. The development of cross-border corporate integration and intra-border inter-company sectoral integration makes it increasingly important to examine where and how innovative activity by MNCs is internationally dispersed and regionally concentrated. By using patents granted to the largest industrial firms for innovation located abroad-arranged by the host region-we test the nature of the relationship between the foreign-owned and the indigenous company profiles of technological specialisation in the Italian regions. We argue the MNC networks for innovation in Europe conform to a geographical hierarchy of regional centres. Accordingly, the technological specialisation of foreign-owned affiliates in different regional locations depends upon the position of the region in the hierarchy, i.e. whether the regional system is at the top of the hierarchy (higher order location) or is a lower order regional centre.