The Location Behavior of the Multinational Enterprise: Some Analytical Issues

Posted: 3 May 2004

See all articles by Philip McCann

Philip McCann

University of Reading - Department of Economics

Ram Mudambi

Temple University - Department of Strategic Management

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. In this paper we argue 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, we argue 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, we will also argue here that this literature provides few, if any real answers to the problems set by the geographical behavior of the MNE. We conclude 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.

Keywords: Multinational firms, location, foreign direct investment

JEL Classification: F23, F21

Suggested Citation

McCann, Philip and Mudambi, Ram, The Location Behavior of the Multinational Enterprise: Some Analytical Issues. Available at SSRN: https://ssrn.com/abstract=539223

Philip McCann

University of Reading - Department of Economics ( email )

Reading, RG6 6AA
United Kingdom
+44 (0)118 9314074 (Phone)

HOME PAGE: http://www.rdg.ac.uk/IEAS/staff/McCann.htm

Ram Mudambi (Contact Author)

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-2099 (Phone)
215-204-8029 (Fax)

HOME PAGE: http://sbm.temple.edu/~rmudambi/index.html

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
1,159
PlumX Metrics