New insights on the role of location advantages in international innovation
This paper takes a closer look at the role of location advantages in the spatial distribution of MNE R&D activity. In doing so, we have returned to first principles by revisiting our understanding of L and O advantages and their interaction. We revisit the meaning of L advantages, and offer a succinct differentiation of L advantages. We emphasise the importance of institutions, and flesh out the concept of collocation L advantages, which play an important role at the industry and firm levels of analysis. Just because a country possesses certain L advantages when viewed at a macro-level, does not imply that these are available to all industries or all firms in that location without differential cost. When these are linked to the distinction between location-bound and non location-bound O advantages, and we distinguish between MNEs and subsidiaries it allows for a clearer understanding of the MNE's spatially distributed activities. These are discussed here in the context of R&D, which - in addition to the usual uncertainties faced by firms - must deal with the uncertainties associated with innovation. Although prior literature has sometimes framed the centralisation/decentralisation, spatial separation/collocation debates as a paradox facing firms, when viewed within the context of the cognitive limits to resources, the complexities of institutions, and the slow pace of the evolving specialisation of locations, these are in actuality trade-offs firms must make.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: P.O. Box 616, 6200 MD Maastricht|
Phone: (31) (0)43 3883875
Fax: (31) (0)43 3216518
Web page: http://www.merit.unu.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Juan Alcácer & Wilbur Chung, 2007. "Location Strategies and Knowledge Spillovers," Management Science, INFORMS, vol. 53(5), pages 760-776, May.
- John Cantwell & Grazia D. Santangelo, 2002. "special issue: The new geography of corporate research in Information and Communications Technology (ICT)," Journal of Evolutionary Economics, Springer, vol. 12(1), pages 163-197.
- Sjoerd Beugelsdijk & Philip McCann & Ram Mudambi, 2010. "Introduction: Place, space and organization-- economic geography and the multinational enterprise," Journal of Economic Geography, Oxford University Press, vol. 10(4), pages 485-493, July.
- Cantwell, John & Santangelo, Grazia D., 1999. "The frontier of international technology networks: sourcing abroad the most highly tacit capabilities," Information Economics and Policy, Elsevier, vol. 11(1), pages 101-123, March.
- John Cantwell & Grazia D. Santangelo, 2000. "Capitalism, profits and innovation in the new techno-economic paradigm," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 131-157.
- John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan, vol. 11(1), pages 9-31, March.
- Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-74, February.
- Blanc, Helene & Sierra, Christophe, 1999. "The Internationalisation of R&D by Multinationals: A Trade-off between External and Internal Proximity," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 187-206, March.
When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2011045. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ad Notten)
If references are entirely missing, you can add them using this form.