The Location Behavior of the Multinational Enterprise: Some Analytical Issues
Article first published online: 22 OCT 2004
Growth and Change
Volume 35, Issue 4, pages 491–524, Fall 2004
How to Cite
McCann, P. and Mudambi, R. (2004), The Location Behavior of the Multinational Enterprise: Some Analytical Issues. Growth and Change, 35: 491–524. doi: 10.1111/j.1468-2257.2004.00259.x
- Issue published online: 22 OCT 2004
- Article first published online: 22 OCT 2004
- Submitted July 2003; revised Dec. 2003, March 2004.
ABSTRACT In the international business literature location behavior has traditionally been analyzed using Dunning's (1977) OLI framework, which focuses on the nature, role, and behavior of multinational enterprise (MNE). In this paper it is argued that this approach is now no longer appropriate for discussing the spatial behavior of MNEs, because of the fundamental changes which have taken place either in MNE organization or in the global and institutional environment for foreign direct investment (FDI). At the same time, the paper argues that current location theory from regional economics and economic geography is also largely unsuitable for discussing these issues, such that the spatial behavior of the MNE provides a set of difficult challenges to location analysts. There appears to have been some response to these issues from the international business and management literature, most notably the Porter literature on clusters. However, it is also argued here that this literature provides few, if any, real answers to the problems set by the geographical behavior of the MNE. It is concluded that a fusion of traditional economic geography approaches with a focus on the information and organizational aspects of the firm and the region under consideration may be a way forward for both theory and empirical analysis.