Geography Reference
In-Depth Information
2001; Belussi et al. 2010; Cusmano et al. 2010; Ernst 2010). The types of
local spillovers which are likely to operate mean that the export (of prod-
ucts and knowledge) potential of uni-national (multiplant or not) firms
will be higher,
ceteris paribus
, in regions which are characterized by sub-
stantial MNE presence and embeddedness. Multinational firms are indeed
the primary conduits via which global knowledge flows operate and the
natural channels via which domestic firms can distribute their products.
As such, MNEs facilitate and provide for regional connectivity. This is
exactly what was found by Aitken et al. (1997) who demonstrated that
it is proximity to multinationals, and not proximity to other exporters,
which increases export propensities. Moreover, their finding was robust
to the inclusion of other measures such as the overall industrial activity of
the region, proximity to the capital city and border regions, and price and
costs variables. More recent evidence from Sweden shows that the export
propensities of non-MNEs is not only higher for those firms located in
larger and denser cities, but in addition is also correlated with the degree
of MNE activity in that city (Andersson 2009; Johansson and Loof 2009).
As such, as has been emphasized by sociologists and geographers working
on world city networks, it is clear that the urban scale is only part of the
story: global connectivity is also a critical part of the story, and one which
has been rather overlooked by urban economists, institutional economists,
and trade modellers.
7.6 CONCLUSIONS
The arguments developed in this chapter and in Chapter 6 suggest that in
terms of economic geography the institutional, technological and organi-
zational features of modern globalization are together making the world
more uneven and spikier, rather than flatter and more uniform. Yet, these
arguments do not entail that all developing nations and less advanced
regions are being left behind by globalization processes, but that conver-
gence and 'flatness' are far from being achieved. A first implication of our
discussion is that the economic growth of both developing economies and
lagging behind regions very much depends on the cities which already exist
in these countries and regions. Indeed, the emergence of many of the major
newly-industrializing countries is driven by the dominant cities, as wit-
nessed by the rising international importance of centres such as Shanghai,
Mumbai, Sao Paulo and Moscow. However, our arguments here also
imply that the spread effects to other parts of the developing world will
continue to be relatively restricted (Crafts 2004). The main point is that
the rapidly-growing economies in the newly-industrializing regions of the
