Geography Reference
In-Depth Information
institution is not, and cannot be, encompassed in a single governing theo-
retical scheme.
The aim of this topic is not to propose a new theory of the MNE or an
alternative set of explanations of MNE behaviour. Rather, our objective is
to bring into focus one particular dimension of MNE behaviour and activ-
ity which has been under-researched in comparison with other aspects of
the MNE; namely the
geography
of the multinational enterprise. Indeed,
the intersections of the study of MNEs with both geography and innova-
tion are nowadays widely recognized as being very important, but they are
still seriously underexplored.
In this topic we work with a set of selected theories and conceptual
frameworks which, in our view, together help explain much of the spatial
behaviour of the modern MNE. These theories and frameworks explain
the spatial behaviour of the MNE with reference to both the internal
processes of the firm's decision-making and operating structures, and also
with reference to its connections and interactions with the outside world,
and thus with geography. In the international business and management
literature the giant, multidivisional, highly integrated multinational
firm
has been put at the centre of the analysis, and this is often treated as an
abstract type of economic agent of unique importance. However, it is
more useful, for our purpose here, to follow the view of Edith Penrose and
treat the MNE as just a special case of the general firm, or even better, as
a stage in its evolution, with the stage -
being
multinational - itself subject
to change over time. Indeed, the incredible pace with which the number
of internationalized and network-connected firms has grown in the recent
years seems to indicate that many large, and even medium and small sized
companies, are going through a metamorphosis that will lead to different
paths of openness and interdependence, and eventually to different forms
of multinationality itself (Box 1.1).
In marked contrast to the international business and management
literatures, other fields such as innovation studies and the economics
of technological change have mostly considered the uni-national, uni-
located, mono-activity
firm
as the main object of the analysis, thereby
marginalizing the MNE in the investigation of causes and effects of learn-
ing and innovation processes. Likewise, traditional economic geography
and location theory, and even the most recent developments in both new
trade theory and new economic geography, have tended to concentrate on
the
activities
carried out by the multinational firm, mostly defined, if not
exclusively so, in terms of foreign direct investment (FDI). Analyses here
have tended to emphasize the firm's location choices for plants or estab-
lishments in the same area, or alternatively the firm's decisions to replicate
production capacity in other far away sites, without paying much atten-