Geography Reference
In-Depth Information
The scope of such GPNs, however, is still clearly macro-regional,
and the operations of most MNEs are concentrated in super-regions
(Dunning et al. 2007; Osegowitsch and Sammartino 2008; Rugman and
Verbeke, 2004b, 2007, 2008a, b; Cantwell 2009). The GPNs managed by
large MNEs were highly facilitated by the reduction, or even the almost
complete removal in super-regions such as the EU, of trade barriers
(Guy 2009). For example, the foreign operations and assets of Japanese
MNEs are overwhelmingly located in the East Asia region. Global firms
in the automotive industry, such as Ford, General Motors, Volkswagen
and Nissan-Renault, organize most of their manufacturing activities
on a macro-regional basis to serve the respective 'local' or rather super/
macro-regional markets. And, although there are Mexican
maquiladoras
associated with Japanese or Korean MNEs (Kenney and Florida 1994),
far more are in fact connected to US corporations (Guy 2010). What once
took place within national borders now takes place within super-regions
such as the EU, NAFTA, Mercosur, and ASEAN - or within China or
India, each with a larger population than any of such regional areas (Guy
2010).
The clearest example of the power of modern multinationals in driving
economic growth comes from recent data on US multinationals. Although
the 2270 current US multinational enterprises account for less than 1 per
cent of US firms, they account for 23 per cent of US GDP. More impor-
tantly, they account for 31 per cent of total US economic growth between
1990 and 2007, and 11 per cent of total US employment growth during this
period (MGI 2010a). The impact of multinationals on modern aggregate
economic growth is enormous.
As discussed in the various chapters of this topic, the dynamic perform-
ance of multinationals is reflected in various dimensions. For example,
US multinational firms displayed a 41 per cent increase in labour produc-
tivity between 1990 and 2007 (which is more than twice that of US non-
multinational domestic firms over the same period), and an annual growth
in value added which was 45 per cent higher than that of domestic firms
(MGI 2010a). As already argued in this topic, the productivity perform-
ance of US multinationals was largely due to the knowledge investments
made by these firms, whose R&D expenditure accounts for 74 per cent of
all US private sector R&D (MGI 2010a). These huge knowledge invest-
ments allow these firms to operate and successfully compete in global
markets. US multinational firms accounted for 37 per cent of all US
imports and 48 per cent of all US exports in 2007 (MGI 2010a), and they
therefore display a much more favourable trade balance than other types
of firms in the US economy.
Obviously, following our previous arguments, the international success
