Geography Reference
In-Depth Information
tion and spillovers. This spatial boundedness is a major explanation for
the emergence and reinforcement of core-periphery forces and regional
divergence, especially in the face of processes of economic integration
and globalization (e.g., Fagerberg et al. 1997; Rodríguez-Pose 1994, 1998;
Caniëls 2000; Verspagen and Caniëls 2001; Rodríguez-Pose and Crescenzi
2008; Crescenzi and Rodríguez-Pose 2009; Paci and Usai 2009). Indeed,
the spatial proximity of firms and people within individual urban areas
becomes over time relatively more important as a source of knowledge
spillovers and agglomeration economies. Moreover, dominant agglomera-
tions also appear to become more specialized within the global economic
system (Gordon 2002), such that different localities are likely to be pro-
gressively more differentiated in terms of their competitive advantages.
The importance of specific geographies also renders problematic the
traditional scholarly separation between the questions regarding the
causes and impacts of multinationality (Ietto-Gillies 2005). The valuation
of MNE effects is inherently connected to the determinants of the MNE
existence, the why, how and where the multinational firm operates. As
we will see later, in spite of some ground-breaking insights provided by
Vernon and, in particular, by Hymer, the international business theory has
not explicitly distinguished between the different geographies of MNEs
activity, whether with respect to the process of becoming multinational, or
with reference to the effects of foreign investment (McCann and Mudambi
2004). Moreover, the national geographical units of study which are still
the exclusive focus of international data and statistics have tended far too
often to be too general for any meaningful level of spatial analysis. Such
a lack of geographical specificity has also therefore precluded any coher-
ent analysis of the changing dynamics of spatial industrial configurations
under the pressures of globalization. Yet, these dynamics narrow the scope
of the relationships between MNEs and technological and innovation
processes, and many aspects of these relationships which, by definition,
are often highly embedded in specific geographical settings. The specifi-
city of MNE geography-knowledge-technology interactions is increasing,
while new developments in theory and data lag far behind.
At the same time, these developments also provide for the possibility of
more sophisticated, subtle and imaginative solutions on the part of MNE
strategies, as well as for places. Geography can thus be viewed as a power-
ful selection mechanism that may (or not) provide conditions favourable
to meet the requirements of institutional, organizational and technologi-
cal change under globalization (Cohen and Levinthal 1990; Lambooy and
Boschma 2001; Boschma 2005). Geography will become ever more impor-
tant as a competitive consideration for international businesses, and all
the available evidence suggests that in many ways MNEs will increasingly
