Geography Reference
In-Depth Information
a global scale. Third, there are global technological collaborations, facili-
tated by national and international agreements, and which involve both
private and public actors for the joint development of specific technologi-
cal discoveries. These categories are strongly interdependent and imply
both degrees of competition and collaboration among the main agents
(Archibugi and Iammarino 1999, 2002).
Although firms, and especially large ones, innovate and compete glo-
bally in all three different ways described by these categories, MNEs are
undoubtedly the most important actors in the worldwide cross-border
creation of new technical knowledge. The location of their innovative
activities is often linked to the location of their productive activity but,
however strong the correspondence between production and R&D activi-
ties may be, it is far from being unambiguous.
The question of how globalization affects the (macro-) geography of
technology and innovation and whether this fosters or constrains local
technological capabilities has been extensively addressed in the inter-
national business literature and, more generally, in the OLI framework
(e.g., Dunning 1993, Dunning and Lundan 2008), as well as in innova-
tion theory and the theory of the firm (Chandler et al. 1998; Chesbrough
2006). As already noted, traditional analyses of multinational activity
emphasized the centralized nature of the research and development efforts
of MNEs. The main advantages of the centralization of R&D services
in the location of origin of the parent company are basically connected
to economies of scale and scope in R&D, control over innovation, and
linkages with national business and non-business sectors (Pavitt and Patel
1991; Patel and Vega 1999). In this centralized structure the headquarters
of the MNE provides knowledge to the rest of the firm, which is to all
affiliates elsewhere located. However, as already highlighted in Chapter
2, many scholars have now argued the obsolescence of this thesis (e.g.,
Cantwell 1995; Birkinshaw and Hood 1998; Blanc and Sierra 1999; Frost
2001; Rugman and Verbeke 2003; Birkinshaw et al. 2005; Cantwell and
Mudambi 2005; Sullivan and Daniels 2008; Piscitello 2011), because such
advantages seem to be increasingly counterbalanced by the advantages
associated with decentralization or multiple geographical location of
MNE innovative and technological activities. The latter can be sum-
marized in terms of the linkages between innovative activity and local
production, markets, suppliers and clients, and the acquisition of foreign
knowledge and capabilities in technological fields of excellence of host
locations (Pearce and Singh 1992; Howells and Wood 1993; Miller 1994).
All these factors acquire a greater or lesser importance depending on inno-
vation systems' features, firm organization and strategy, products and
technologies involved both in the origin and host locations.
