Geography Reference
In-Depth Information
social globalization. In turn globalization, while facilitating the circula-
tion of people, goods, capital and above all, ideas and knowledge, allows
for the sustenance of a historically unprecedented rate of technological
change (Archibugi and Iammarino 2002).
As we have discussed above and in the previous chapters, MNEs are
in many respects the most important actors in globalization processes.
Yet, the relationship between multinational firms and globalization is a
difficult one to analyse. This is because the intra-firm connections and
inter-firm relationships which constitute the essence of multinationals
represent simultaneously both complementary and interdependent ways
of allocating and organizing resources and assets across national borders,
thereby contributing at the same time to the growth and change of both
the firm and the external world. The problem here is thus to disentangle
what should be considered exogenous from what is indeed endogenous to
the firm. The traditional perspective on the 'home' and the 'host' countries
of the multinational corporation implies a 'sectioning' of the firm, which
divides its multifaceted nature and impact and separates it from the overall
context of its activity as a multinational firm (Wilkins 1994, 2001). In what
follows we will present a picture of the historical trends in globalization
as a series of inter-reliant economic and technological
activities
carried
out across borders, keeping in mind that the main agents performing such
activities are multinational
firms
, which are the focus in this topic. Such a
historical overview is helpful in order to understand how firms, activities
and their geographical locations
co- evolve
over time.
6.2
THE 'FLAT WORLD' THESIS
The view of globalization which focuses primarily on technological
changes such as the Internet, mobile phones, and thereby also sees the
world as rapidly becoming a global village, has been the focus of increas-
ing popular discussion in recent years. This view of globalization was given
an enormous boost with the publication in 2005 of Thomas Friedman's
influential bestselling topic
The World is Flat
, and subsequently updated
editions (Box 6.1).
Even though it is never explicitly stated in his topic, the motivation for
Friedman's argument is actually primarily an economic geography argu-
ment. The idea that technology is making the world flat derives from the
notion that geographical space and location are becoming increasingly
irrelevant as arbiters of economic and social activity. The implicit belief
underlying the general argument that the world is becoming flatter is
essentially that of a dramatic fall of the transactions costs associated with
