ABSTRACT
This chapter examines how internationalization affected the industrialization of the Spanish economy. First, we briefly review the overall changes in the structure of the Spanish economy particularly after the shift from an import substitution strategy to one which sought to integrate Spain into the international economy. Second, we concentrate on the relationship between domestic innovation activities and foreign direct investment (FDI) in this development process. Third, we analyse policy attempts to enhance domestic technological activities that would complement foreign technology imports.
