The explosion of multinational activities in recent decades is rapidly transforming the global landscape of industrial production. But are the emerging clusters of multinational production the rule or the exception? What drives the offshore agglomeration of multinational firms in comparison to the agglomeration of domestic firms? Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of pairwise-industry agglomeration and investigate the patterns and determinants underlying the global economic geography of multinational firms. Our analysis presents new stylized facts that suggest the emerging offshore clusters of multinationals are not a simple reflection of domestic industrial clusters. Agglomeration economies including capital-good market externality and technology diffusion play a more important role in the offshore agglomeration of multinationals than the agglomeration of domestic firms. These findings remain robust when we address potential reverse causality by exploring the regional pattern and process of agglomeration.

In this paper we characterize the topology of global multinational networks and examine the macro and micro patterns of multinational activity. We construct indices of network density at both pairwise industry and establishment level and measure agglomeration in a global and continuous metric space. These indices exhibit distinct advantages compared to traditional measures of agglomeration including the independence on the level of geographic aggregation. Estimating the indices using a new worldwide establishment dataset, we investigate both the significance and causes of multinational firm co-agglomeration. In contrast to the conventional emphasis of the literature on the role of input-output linkages, we assess the effect of various agglomeration economies. We find that, relative to counterfactuals, multinationals with greater factor-market externalities, knowledge spillovers, and vertical linkages exhibit significant co-agglomeration. The importance of these factors differs across headquarters, subsidiary, and employment networks, but knowledge spillovers and capital-market externalities, two traditionally under-emphasized forces, exert consistently strong effects. Within each macro network, there is a large heterogeneity across subsidiaries. Subsidiaries with greater size and higher productivity attract significantly more agglomeration than their counterfactuals and become the hubs of the network.

Pontus Braunerhjelm and Karolina Ekholm Over recent decades, foreign direct investment (FDI) has become a major force in the global economy. The geographical pattern of capital formation, trade and technological spillovers across countries and regions, are to an in creasing extent determined by the strategies chosen by multinational firms (MNFs). Between 1982 and 1994, the rate of growth of the global FDI stock was more than twice that of gross fixed capital formation, the growth of sales by foreign affiliates of multinational firms well exceeded that of world exports, and, by 1994, the MNFs accounted for approximately 6 percent of world output (United Nations, 1997, pp. xv-xvi). The overall mechanisms behind this rapid internationalization in terms of multinational produc tion have been attributed to the dismantling of trade barriers and the deregulation of capital markets, together with the advances in information technology that have facilitated the coordination and monitoring of inter nationally dispersed production. This development carries two important implications: First, firms operate in markets characterized by much tougher competition than only a decade ago, and, second, countries and regions are involved in competition for production to a much larger extent than before. This book addresses questions related to the location and geographical dispersion of the activities by multinational firms, a topic which has be come of increasing concern to policy-makers.

Multinationals exhibit distinct agglomeration patterns which have transformed the global transformed the global landscape of industrial production (Alfaro and Chen, 2014). Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of pairwise-industry agglomeration and investigate the patterns and determinants underlying the global economic geography of multinational firms. In particular, we run a horse-race between two distinct economic forces: location fundamentals and agglomeration economies. We find that location fundamentals including market access and comparative advantage and agglomeration economies including capital-good market externality and technology diffusion play a particularly important role in multinationals' economic geography. These findings remain robust when we use alternative measures of trade costs, address potential reverse causality, and explore regional patterns.

This volume presents the work of specialists on multinational strategy, addressing the main questions of globalization, competitiveness, the impact of regionalism, agglomeration, strategic location choice, and relocation and public aid.

The choice of location for the production plants of multinational firms is an important issue, not least because this decision is accompanied by so many fears brought into public debate. This book analyses how foreign direct investors choose their locations, whilst exploring the forces which shape international economic geography. Although these two issues are, to some extent, inter-related, researchers have only recently acknowledged the similarity of economic geography and international business approaches to the empirical assessment of likely causes of the degree of spatial concentration observed in many modern industries. Giving insight into the direction that future research should take, this book contains state-of-the-art papers on both theoretical and empirical levels. This original collection makes a particularly important contribution to our understanding of the existence and impact of home market effects. Introducing a welcome synthesis between two related and yet rarely integrated areas of study using case studies of firms in Europe, US MNEs and the Mexican automobile industry, this book will be welcomed by both academic and practising economists. Regional scientists and.

'The world economy is subject to a rapidly increasing globalization, and multinational enterprises are their major driving force. This brand new book on multinationals and economic geography by two world leading economic geographers is a landmark that provides an integrated and dynamic perspective on the economic geography of the multinational enterprise. To fully understand this process of globalization, the book explains forcefully and persuasively that one needs a dynamic perspective on multinational enterprises that brings together disparate literatures on economic geography, knowledge and innovation, global network cities, and international business and management. Embedding it in modern theory of innovation and geography, the book provides not only a state-of-the-art of theories and empirics on the location of multinationals, but goes far beyond that. This book is an absolute "must-read" for any scholar and any student that is interested in multinationals and their location.' – Ron Boschma, Utrecht University, The Netherlands and Lund University, Sweden 'Despite often playing second fiddle to clusters in the economic geography literature, multinationals are fundamental drivers of economic development. As generators and diffusers of knowledge they have played an essential role in shaping the new world economic order. No book captures this better than Simona Iammarino and Philip McCann's Multinationals and Economic Geography, a must read for anyone eager to fully understand the new economic geography of globalisation.' – Andrés Rodríguez-Pose, London School of Economics, UK After more than fifty years of systematic research on multinational enterprises (MNEs) what is apparent is that there is, as yet, no unified or dominant theory of the MNE. The objective of this book is to bring into focus one particular dimension of MNE behaviour and activity that has been relatively under-researched – namely the geography of the multinational enterprise – as understood through the lens of innovation and technological change. The authors clearly demonstrate that geography is becoming increasingly important for MNEs and, in turn, MNEs are becoming progressively more important for economic geography. The pivot on which this vital relationship turns is the creation, diffusion and management of new knowledge. This unique book will prove a fascinating read for academics, students and researchers across a broad range of areas including geography, economic geography, regional science, international business and management, innovation studies, economic development. Professionals such as corporate managers and policymakers in these fields would also find this book to be of great interest.

This contributed volume studies and explains the effect of agglomeration on a firm’s innovation and performance. It presents new cases as well as new topics within the agglomeration phenomenon, exploring also their role under the Great Recession. Beyond the analysis of regions or clusters, this volume focuses on firms within agglomerations and captures this phenomenon from different perspectives, contexts and diverse literatures. Specifically, it looks at the question under what circumstances exert generate benefits on firms’ performance, and how those gains are generated and distributed, usually asymmetrically, across agglomerated firms. In this context, the book addresses topics such as networks, collocation, labor mobility, firm’s strategies, innovation, competitiveness and collective actions across a diverse set of literatures, including economic geography, business economics, management, social networks, industrial districts, international business, sociology or industry dynamics.

How multinationals contribute, or don't, to global prosperity Globalization and multinational corporations have long seemed partners in the enterprise of economic growth: globalization-led prosperity was the goal, and giant corporations spanning the globe would help achieve it. In recent years, however, the notion that all economies, both developed and developing, can prosper from globalization has been called into question by political figures and has fueled a populist backlash around the world against globalization and the corporations that made it possible. In an effort to elevate the sometimes contentious public debate over the conduct and operation of multinational corporations, this edited volume examines key questions about their role, both in their home countries and in the rest of the world where they do business. Is their multinational nature an essential driver of their profits? Do U.S. and European multinationals contribute to home country employment? Do multinational firms exploit foreign workers? How do multinationals influence foreign policy? How will the rise of the digital economy and digital trade in services affect multinationals? In addressing these and similar questions, the book also examines the role that multinational corporations play in the outcomes that policymakers care about most: economic growth, jobs, inequality, and tax fairness.

The issues addressed in this thesis concern the implications of factor mobility through multinational firms on a country's specialization and comparative advantage.