Geography Reference
In-Depth Information
explaining multinational behaviour. As discussed above, both Hymer's
and Vernon's pioneer works have strong micro-foundations, and as
such provide crucial connections between the structure and behaviour of
MNEs and the sub-national spatial organization of their economic activi-
ties. However, in spite of the relevance attributed to locational elements
in the original work of both authors, the subsequent literature on MNEs
has essentially privileged the traditional macroeconomic perspective of
international trade theory in treating countries as the main spatial units of
observation, where the firm is primarily regarded as merely the expression
of a certain nationality.
Thus, while the integration between O and I is so highly effective, the L
advantages are essentially attributed to either countries or firms in a rather
non-systematic and non-analytical manner by the different theoretical
approaches to the MNE (e.g., see Dunning 1993, p. 77). In general, the L
aspect of multinationalism has tended to be treated as a kind of exogenous
context variable conditioned on national features, and it is really only very
recently that the empirical literature in the OLI and economics tradition
has begun to actually address the locational strategies of MNEs at a more
fine-grained territorial perspective.
2.7.2
The Sources of Knowledge and the Centrality of the L
Part of the explanation for the surprising delay in acknowledging the role
of space in MNE behaviour lies in the fact that most of the international
economics and business emphasis has been, as we have seen above, on
either the macroeconomics of international production or on the charac-
teristics of the processes which are internal to the firm. As we will see in
later chapters, prior to the advent of the current era of globalization since
the 1990s, it is clear that both of these lines of enquiry were motivated
primarily by historical contingency (Dunning 2001), in the sense that
the priorities of the foreign investment decisions made by MNEs were
perceived of as being far more related to national and international differ-
ences rather than to (sub-national) regional differences. This accounts for
the fact that, while L is apparently central to the eclectic OLI paradigm, its
theoretical foundations and reliance on micro-meso interactions seem to
have been substantially understated.
Much of the available real world evidence regarding the current phase
of globalization points to a growing importance of new types of struc-
tures and new forms of economic coordination, that go well beyond the
traditional distinction between the firm and the market. These structures
include networks, value chains and quasi-market relationships of various
different kinds which have grown exponentially in importance (Guy
