This book develops a view of multinational firms as heterogeneous institutions that combine internal networks of subsidiaries with external networks of collaborative linkages, and connect geographically separate innovation systems. By so doing multinationals are affected by, and contribute to, the technological evolution of contexts in which they are active. From this perspective, not every foreign firm is a good source of externality, and not every domestic firm is equally well placed to benefit from, and generate advantages to, multinationals. It is shown that spillovers differ according to the technological profiles, embeddedness and linkage creation of both foreign and domestic firms active in local markets. To support this view, the book provides empirical evidence based on illustrative case studies, and on econometric analysis using extensive firm-level datasets on multinational activities, innovation and economic performances.