Corporate Diversification, Internationalization and Location of Technological Activities by MNCs in Europe

In our previous work (in common with much of the international business literature) we have tended to confine the use of the term ‘globalization’ to the recent transformation of capitalist structures — thus, Cantwell (1989a) refers to the ‘global capitalism’ that has emerged since 1945, having evolved from the earlier forms of merchant, then industrial and then finance capitalism. What was observed in the past, and in which process European firms (especially those from Britain, Germany, the Netherlands and Switzerland) were leading contributors, was better termed more simply as the internationalization of business. This took the form of the international dispersal of productive activity, mainly in the search for new resources or markets, and after around 1870 it was conducted increasingly within multinational corporations (MNCs). To facilitate the geographical spread of their production, MNCs also began quite early to internationalize their technological development efforts (Cantwell 1995). Since the motive for most investments was resource-seeking or market-seeking, the objective of undertaking localized corporate research was mainly to adapt products for local markets or to adapt processes and resource extraction methods to local production conditions.