Geography Reference
In-Depth Information
MNE
Country A
Country B
Country C
L
A1
L
A2
L
B1
L
B2
L
B3
L
C1
L
C2
Figure 3.1
Hierarchical locational decision-making
confined to research within the urban and regional economics tradition
and also that of economic geography, both of which are research fields
which were largely isolated from the main research on MNEs. Today,
however, these differences are rapidly disappearing and research in these
various fields is converging following a rising and widespread interest in
the links between geography, trade and multinational investment. This
interest is not confined to any particular part of the world, although
the major emphasis of these discussions has tended to take place among
OECD countries. As we will see in later chapters, there are three main
reasons for the converging interest in the role which geography plays in
determining MNE behaviour; and these reasons are related to technologi-
cal progress, to institutional change, and to transformation in corporate
behaviours and strategies, most notably connected to outsourcing and
offshoring.
In terms of our hierarchical decision-making model described in
Figure 3.1, these technological, institutional and behavioural develop-
ments imply that MNE investment choices can and must be considered
in much greater detail than simply that of the first level of analysis - that
is, the country level - as has traditionally been the case. The two levels of
analysis - namely that of the country and then that of the city or regional
locality within the country - must be increasingly seen as part of the same
