Geography Reference
In-Depth Information
economic geography, have in the past been far too scattered across dif-
ferent literatures and methodologies to be presented as a coherent whole.
As such, this topic has attempted neither to offer any new theories nor
any new data on these matters. Rather the objective of the topic has been
to assemble the currently-available arguments and evidence in a manner
which better allows for the image to appear. In order to do this we have
adopted a particular analytical lens through which we observe and inter-
pret these issues, namely that of knowledge and technology, and this
approach runs throughout the various chapters of the topic. This is not an
arbitrary choice, but reflects what we contend is the best approach for uni-
fying all of the currently-available arguments and evidence regarding the
two-way relationships between multinational corporations and economic
geography.
Chapter 2 reviewed the various international business theories which
have examined the rationale for multinationalism - in other words the
why
multinational?
question. The answers offered to this question are typically
based on Dunning's (1977) eclectic OLI paradigm which explains the why
multinationalism arises in terms of the ownership O advantages which
firms wish to exploit. Similarly, the answers to the questions regarding the
mode of multinationalism - in other words the
how multinational?
question
- are generally found in the various knowledge-internalization I explana-
tions evident in the international business literature and in neoclassical
trade theories. Moreover, the links between O and I are also examined in
managerial and sociological approaches such as the resource-based view
and the evolutionary theories of technological change. O and I are seen to
frequently co-evolve, such that
being
multinational can be regarded as a
stage within the evolutionary development of a firm.
If we consider the three pillars of the OLI paradigm, however, it is
clear that the major shortcoming of the literature on MNEs so far is the
issue of location L - in other words the
where multinational?
question. In
comparison to our understanding of O and I, and also of the interactions
between O and I, the progress made so far in understanding the economic
geography of the MNE has been very limited indeed. In part, the limited
progress on the L-location pillar in comparison to the O and I pillars was
related to the perceived lack of importance of any needed fine-grained
locational analyses during earlier decades when countries were still largely
closed entities. Now that countries are opening up to one another and
multinational firms make ever-more specific locational decisions, there is
now an increased urgency to understand these issues. Chapter 3 presented
some orthodox location arguments in order to foster discussion around
these issues, and what becomes evident is that very simple and classical
location models provide powerful insights into the behaviour of both mul-
