Most countries have been keen on implementing policies in order to attract foreign multinationals, stimulate industrial clustering, and to foster innovation. This book links these extremely topical, and often related, issues. It examines the activities of multinational enterprises, their contribution to cluster development, how they stimulate linkages with domestic firms and contribute to innovation. New empirical evidence is provided on a variety of industries (biotechnology, automotive, molds) and country (China, Brazil, Eastern European countries, Scotland, Ireland) contexts. The efficiency, appropriateness and sufficiency of the policies under analysis is debated. A key feature of the book is the thorough policy discussion, grounded on sound empirical data, which leads to practical policy proposals and suggestions to improve the potential contribution of multinationals to host economies.