Although MNCs from developing and transition countries (called hereafter southern MNCs) are increasingly investing in European advan ced economies, we have an incomplete and inconsistent understanding of wh ether, and under what conditions, this investment may benefit the local economy. Our paper addresses this issue by examining whether Swiss local firms may benefit from the entry and the presence of southern MNCs in services construction industry. Relying on spillover literature, we argue that an alyzing spillovers from southern MNCs needs to distinguish these effects according to the ways they occur as well as the technological characteristics of local knowle dge receivers. We show that local firms need to upgrade their human capital to take benefit from the entry and presence of southern MN Cs in their industry; otherwise the presence of southern MNCs reduces the productivity of local services construction firms in Switzerland. No benefit is found from competition effects. Moreover, interactions between different technological capacities of local firms and the ways they benefit from spillovers from southern MNCs provide differences in spillover results.