Geography Reference
In-Depth Information
location behaviour of MNEs. Firstly, under this much broader logistics-
costs framework, the simple Weber and Moses-type results can be shown
to be no more than specific cases, which only hold for establishments
where the value-added at the establishment is zero, such as in the case of
a distribution warehouse or of a retail facility (McCann 1998). Indeed, it
is somewhat ironic that most models of firm location are actually models
of warehouse or store location. However, given that much of modern day
globalization is about changes in the geography of distribution as well as
production the models are still very applicable.
Secondly, the general insights of the logistics costs model can also be
shown to hold for the movements of people (McCann 2007; McCann et
al. 2010) across a range of knowledge-related transactions decisions. In
particular, the overall schema mapped out by the logistics costs model
(McCann 1998) is seen to largely hold for the movements of knowledge
embodied in human capital, as is typical of service industries. Much of
modern day globalization is also related to the interactions between key
knowledge workers, and this is particularly critical for service industries
or the knowledge-related activities within manufacturing, extraction or
distribution sectors. As such, these broad logistics costs-type arguments
are more or less equally applicable to service industries as well as to the
manufacturing and distribution sectors.
Thirdly, as we will see in Chapters 6 and 7, one of the key features of
modern globalization is an increase in consumer and producer prefer-
ence for timeliness of delivery and speed of shipment, in response to a
range product and service quality demands. These trends increase the
optimum shipment frequencies, reduce the optimum shipment sizes,
and consequently also increase the economic costs of distance, for any
cartographical definition of distance (McCann and Fingleton 1996).
These changes have profound implications for the emerging relation-
ships between economic geography and contemporary globalization,
implications which can be neatly captured on the basis of a logistics
costs model.
3.4
MARKET AREA ANALYSIS: SPATIAL
MONOPOLY POWER
As we mentioned at the beginning of the chapter, in terms of multinational
firms the location behaviour characterized by these various Weber-type
models is indicative of
resource seeking
strategies, and in particular of
those MNEs aiming at host locations' physical resources and cheap labour
(e.g.,
general asset seekers
); though such models can be easily extended
