Geography Reference
In-Depth Information
internal knowledge-generating capabilities. Moreover, as we have seen,
the internal and external knowledge capabilities of the MNE are regarded
as being increasingly interrelated, as manifested in new network forms
of global organization. However, the simple host-home dichotomy still
largely underpins many theoretical interpretations of firms and geography
in terms of uni-directional flows, represented as outflows from location
A which translates as inflows to location B. Further theoretical efforts
towards two-way flows thinking are therefore necessary to integrate con-
nectivity and bi-directional flows and spillovers into more mainstream
international trade and international business thinking. As we have seen,
the major locations of FDI outflows are also the same recipients of most
FDI inflows. Theory also needs to better examine the different levels of
geography in MNE operations. The different levels of geography often
relate to the whole range of activities and functions in the value chain, and
also intra-firm and inter-firm organization structures, and both theory
and empirics need to find a better specification beyond simply that of
the national unit, at both the supra-national level and, even more impor-
tantly, at the sub-national regional levels. The same multiple geographies
should be considered in the light of the fact that multinational firms
increasingly operate across technology and industry boundaries. Modern
globalization is increasingly associated with ever greater differences in
sectoral, functional and technological specialization across different firm
types such as SMEs or MNEs, as well as within individual multiplant and
multinational firms, as well as both across and within regions, cities and
local systems.
A reassessment of MNEs and geography through an inductive learning
process is, however, hampered by the extremely limited and fragmented
empirical evidence currently available regarding these issues. In particular,
there is a serious lack of comparable large censuses and surveys address-
ing MNEs and their sub-national location behaviour. The limited data
which is available mostly compares sub-national units of analysis within
one individual country. Even these limited data sources suggest, as shown
in this topic, that there are complex MNE patterns of differentiation,
patterns which produce spatial hierarchies of activities which reflect and
often reinforce existing territorial inequalities. Not only do MNEs appear
to have a highly skewed spatial distribution of their operations within each
of the main regional blocks of the European Union, North America and
Asia-Pacific, but the relationship between these three regions and the rest
of the world is also markedly uneven. As such, an increased focus on MNE
regional strategies amongst this triad of macro-regions at a detailed spatial
level may be more fruitful than focusing on global strategies (Rugman
2005).
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