Geography Reference
In-Depth Information
the greatest rewards could be reaped by firms which either operated as,
or developed into, multinationals. In terms of economic geography, the
arguments in this topic regarding the importance of the knowledge and
technological capabilities of MNEs in shaping globalization therefore also
imply that the geographical distribution of such assets across the global
economy will increasingly depend on the location behaviour of multina-
tional firms.
Such a rapidly changing global environment has implications for
theory, empirical analysis and policy making. As discussed in the intro-
ductory chapter, a problem often indicated in the general literature on
MNEs has been the lack of any holistic theoretical approach to multina-
tional behaviour. We have shown in this topic that such a universal frame-
work is neither indispensable nor, in fact, at present, really conceivable.
The MNE represents, ultimately, a certain stage in the evolution of an
important economic agent, the business firm. Such a stage is not inevita-
ble in a firm's growth path, nor is it predetermined: MNEs take different
forms, and are highly sensitive to the changes in the external environment
over time. Following Cantwell and Narula (2001), we have argued that the
OLI eclectic framework continues to provide effective broad guidelines as
to our economic understanding of MNEs. However, the constantly chang-
ing global economic context in which MNEs operate and thrive implies
not only the ongoing adaptation of each of the OLI Ownership, Location
and Internalization advantages to the new temporal, geographical and
institutional settings, but also the reconsideration of their reciprocal
influences. As we have seen in this topic, the L has gained enormously in
importance over recent years due to the transformations brought about by
the current phase of globalization. Its status in the triadic set of explana-
tions for multinationality has risen so much so that the typical treatment
of L as being largely exogenous can no longer be justified. MNEs' location
decisions are becoming increasingly complex and dependant on the
variety
and
quality
of highly localized assets. The heterogeneity of advantages
across locations, both within and across national boundaries, is always
intertwined with decisions regarding the internalization of particular L
advantages and/or their externalization in networks via outsourcing or
offshoring, and thus with the organization and structure of the MNE
itself. As explained by Dunning, “With the gradual geographic dispersion
of created assets, and as firms become more multinational by deepening
or widening their cross-border value chains, then, . . . the structure and
content of the location portfolio of firms becomes more critical to their
global competitive positions” (Dunning 2003b, p. 63).
As we have endeavoured to demonstrate in this topic the analysis of the
specific multi-level geography of MNE activities, and therefore the search
