Geography Reference
In-Depth Information
contribute to making the world a more uneven and more differentiated
place (McCann 2008).
1.3
THE STRUCTURE OF THE TOPIC
This topic proposes an integrated perspective in which knowledge and
innovation are regarded as the driving forces underlying the competi-
tive advantage of firms, and location and space provide the platforms to
access the requisite knowledge and technology generating that competi-
tive advantage. This perspective is based on a synthesis and integration of
rapidly growing and disparate literatures in the fields of economic geog-
raphy and location theory, innovation and technological change, and
international business and management.
The topic is divided into two Parts. Part I - Multinationals, location
and innovation: foundations and extensions - includes Chapters 2 to 4,
and is intended to provide an overview of the theoretical and conceptual
building blocks that, combined together, can offer a sound analytical
framework for looking at the economic geography of the multinational
enterprise.
Chapter 2 briefly reviews some of the main interpretations provided by
both economics and international business studies on the determinants and
effects of multinational enterprises' activities, with a specific and highly
selective focus on those that, directly or indirectly, offer more insights to
the issues of geography and location. Here we argue that although the
Ownership- Location- Internalization (OLI) eclectic paradigm proposed
by John Dunning has demonstrated great usefulness and versatility for
over almost four decades since its original formulation in the mid-1970s,
its Achilles heel has lain in the weakness of the 'L'. The theoretical roots of
the L advantage in the OLI have been identified either in the trade domain
(e.g., Hirsch 1979; Beckman and Thisse 1986; Brainard 1993), or in the new
economic geography (e.g., Krugman 1991b; Fujita et al. 1999). In these
approaches, as well as in the OLI, the geographical element is more virtual
than real, with space occupying a sort of 'black box' which is rarely helpful
for elucidating the variety of spatial industrial configurations. More
importantly, innovation and technological processes, which are central to
the transformation of MNE's structure and behaviour over time, are left
somehow outside the L, even though from widespread empirical evidence
we know that many aspects of knowledge, information and technology
are highly geographically specific. The models discussed in Chapter 2
are all well-known to international business and management scholars,
but much less so to many economic geographers or economists analysing
