Geography Reference
In-Depth Information
foster interactive learning. Therefore, understanding the interactive learn-
ing process as a combination of geographical, sectoral and technological
systems should lead to a more effective synthesis between the theoreti-
cal and empirical work aimed at explaining the dynamics of innovation
systems (Lundvall et al. 2002; Chaminade and Edquist 2006). Indeed, the
notion of sectoral systems of production and innovation may actually
complement both geographical and technological systems of innovation
(Breschi and Malerba 1997), as interdependence and complementarity
define the real boundaries of a system at all levels of analysis. One can
observe a strong overlap between geographical, technological and sectoral
systems of innovation, particularly when considering industry boundaries
as being multidimensional, integrated and dynamic. Most importantly, it
is precisely such interdependence between systems of innovation that has
been incorporated within modern multinational firms, thereby changing
their structure and strategies and, at the same time, being influenced by
their behaviour.
4.6
TECHNOLOGICAL ACCUMULATION, MNEs
AND KNOWLEDGE NETWORKS
4.6.1
Research-intensity and International Expansion
As discussed above, firm heterogeneity is a crucial variable which affects
economic growth and performance. Indeed, the observation of heteroge-
neity is all the more important when analysing MNEs organization and
behaviour. This is because, following also the Alchian argument discussed
in Chapter 3, the size of large MNEs means that their behaviour often has
some bearing even on industry overall structures. In the words of Nelson
'One cannot study the computer industry sensitively without paying atten-
tion to the peculiarities of IBM. The recent history of the automobile
industry cannot be understood without understanding Toyota and GM'
(Nelson 1994, p. 254). A major cause of firm heterogeneity lies in the dif-
ferences between firms in terms of their knowledge, innovation, technol-
ogy and R&D. As exemplified in the innovation patterns illustrated by
the Schumpeter Mark II type of regime, historical evidence shows that the
institutionalization of R&D, particularly in large multinational firms, has
been one of the most important drivers in the contemporary patterns of
industrial competition (Freeman 1982a; Mowery 1985).
As has long been acknowledged in the international business literature,
a tight link exists between multinational expansion and the innovativeness
of firms, and authors from different theoretical backgrounds have pointed
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