Geography Reference
In-Depth Information
multinational companies (Cantwell and Fai 1999). Indeed, while during
the nineteenth century the early profile of technological accumulation and
corporate leadership in the most advanced economies was still, at least
partially, mirroring national resource endowments (for example, US large
firms showed advantages in woodworking and oil-related technology; UK
firms in metal working and coal-related technology; German firms in arti-
ficial dyestuffs), at the turn of the twentieth century technological accumu-
lation in large business companies started to follow a less predictable path,
showing ever-weaker links with the natural resource assets of the country
of origin (Rosenberg 1976; Cantwell 1989; Cantwell and Fai 1999).
Yet, in this changed economic scenario, it is largely incorrect to assume
the (still nowadays) common view that the internationalization of pro-
duction activities from firms originating in countries other than the UK
and the US was a post-Second World War event (Jones and Schroeter
1993; Wilkins 2001). The evolution of the
modern
multinational corpora-
tion dates back to the last decades of the nineteenth century, although
multinational firms from earlier times showed in some cases very similar
characteristics to the modern MNE. Many continental European com-
panies - a significant share of them representing still today the European
version of the twenty-first century multinational corporation - had been
active in international production well before the outbreak of the First
World War (Franko 1974). These companies, operating mainly in chemi-
cal, pharmaceutical, electrical equipment and food processing industries,
were primarily German (e.g., Siemens, AEG, BASF, Hoechst, Bayer) and
Swiss (e.g., Ciba, Geigy, Brown-Boveri, Nestlé), locating their foreign
operations principally, but not exclusively, in other European countries. In
the period between 1870 and 1914 the ranking of the countries headquar-
tering larger numbers of companies conducting business abroad saw the
UK in the first position, followed by Germany and the US. Immediately
after these three leaders there were several European economies compet-
ing for the next position, including France, Sweden, Belgium, Switzerland,
and the Netherlands, while further down in the rankings were Canada,
Austria-Hungary, Italy and Russia (Wilkins 1998). In the inter-war period
MNEs with headquarters in European countries further strengthened their
presence on the global business scene (Franko 1974).
One of the major impacts of the scale economies generated by mass
production was that the role which large companies, and in particular
large US companies, played in globalization processes, started to change.
In the early decades of the twentieth century multiplant investment in
manufacturing evolved from being confined within a broadly colonial type
of transnational system, to one with a more genuinely international nature
(Jones 1996; Chandler and Mazlish 2005). At the same time, the growing
