Abstract. Subsidiaries of multinational companies have played an important role as agents of industrialization processes in the state of Paraná, Brazil. Since the 1960s, more than 500 foreign companies have located in this state, mainly in the Curitiba metropolitan area. Their economic impact includes generation of employment, wealth, innovation, and technology diffusion. The purpose of this paper is to analyze the relationship between innovation and internationalization, and whether the subsidiaries of multinationals are innovative. The methodology employed in this study was the analysis of documents and interviews. The results demonstrate that at least one-third of these subsidiaries have innovated.