Geography Reference
In-Depth Information
important in terms of the relationships between a subsidiary establishment
and its local environment. However,
within
an individual MNE corporate
structure the relationships between the dispersed MNE establishments
must always
be arranged in a tightly organized manner, as represented by
the industrial complex. The tightly organized MPDE and MNE structure
permits strong control over the flows of knowledge, finance, goods and
people, between the individual MNE establishments, and the maintaining
of the control over these relationships is the job of the headquarters. Most
crucially for our purposes, all of the international business evidence sug-
gests that it is the very tightness of the headquarter control over the O and
I dimensions which itself allows the multinational firm to geographically
disperse its establishments across countries. As well as having clustered
establishments, the organizational and transactional forms represented
by the industrial complex model therefore also provides firms with a high
ability to disperse or relocate subsidiary and affiliate establishments to
areas which are distant, dispersed or not locally clustered. O and I are
strongly related to L via formal channels and via a formal logic which can
be readily analysed using models such as the Weber (1909) or the logistics-
costs models, both of which now become powerful analytical instruments
for thinking about the location and relocation behaviour of MNEs.
5.5
KNOWLEDGE, TECHNOLOGY AND THE
VARIETY OF SPATIAL CONFIGURATIONS
5.5.1
Variety and Dynamics of Industries and Spatial Systems
As seen in Chapter 4, the literature on industrial dynamics and technologi-
cal regimes has produced valuable stylized facts on both firm and industry
heterogeneity and characteristics and their impact on growth paths. Yet,
this literature has, until recently, largely neglected the spatial dimension
of innovation and technological processes.
5
On the other hand, the litera-
ture on innovation systems, with its strong emphasis on the links between
organizations and institutions, has discussed some of the main determi-
nants of system variety, including various levels of geography. However,
that literature has largely overlooked the evolution of spatial systems
themselves over time in response to innovation processes.
Following the evolutionary tradition, which aims to explain economic
growth in terms of technological and institutional change along with
firms' strategies and industry dynamics (Freeman 1982a; Perez 1983; von
Tunzelmann 1995; Verspagen, 2000), some key concepts can be adapted
from this literature in order to build an analytical framework for interpret-
