Location and Dispersion of Multinationals in Iberoamerica

Topic

The rise of the city as a magnet of economic activity and hub of trade and investment has attracted the agglomeration of business firms and particularly multinational companies.  Global cities today project their economic and political power across borders making them important economic agents in the global economy (Sassen, 1991).  A few of these cities located in Latin America are creating business and economic conditions that rival those of some countries in the region. Increased agglomeration also brings negative conditions such as crime, violence, traffic congestion and pollution that come with increased urbanization. On a smaller scale, agglomeration spreads within a country, creating significant hubs to attract business that in turn generates a sub-national cycle of prosperity and urban malaise.  Cities have coped with the opportunities and problems in many different ways and create their particular sets of regulations, legal frameworks and norms. In some cities, corruption and inefficiency have plagued city governance.  The efficiency and quality of these normative sets and their implementation is referred to as the quality of institutions (North, 1990; Glaeser et. al, 2004; La Porta et. al 1999).  In very large cities, sub-city governance emerges as the more specific context that explains location decisions. Municipalities, city districts add a layer of regulations but also deal with their own social problems.

This special issue focuses on understanding how the quality of the institutional environment of an Iberoamerican city shapes the location decision of multinational franchises. For instance, why would Starbucks populate Santiago, Chile with a large network of stores while it would have few stores in Caracas, Venezuela?

Economic theory has focused on the study of the economic advantages of co-location and externalities (Krugman, 1991).  International business theory has focused on how multinationals internalize the location advantages offered by host countries. These local advantages can be leveraged with firm specific advantages to gain local competitive advantage (Cantwell, 2009; Dunning, 1998).  The literature in International Business has analyzed this decision at the region and country level (Alcacer, 2013; Alfaro and Chen, 2014; Flores, et. al 2013; Tan and Meyer, 2011). Economic geography focuses on the spatial characteristics that can favor an agglomeration of economic activities.  The integration of International Business Theory and Economic Geography views on the location decision has drawn the attention of researchers to the location decisions of multinationals (Beugeldsjik, 2010; Beugeldsjik et. al 2013).  The Institutional Theory perspective on location decisions of multinationals is more recent.  Using the perspective that institutions matter opens up a promising research avenue.   The focus of research using an institutional approach has been at the regional and national level (Ali et. al, 2010; Du and Tao, 2008; Mengistu and Adhikary, 2011).  Research focusing on any of these three perspectives at the city level is scant despite the fact that most location decisions take place at this level (Goerzen, et. al 2013). Furthermore, research on agglomeration and location decisions about Iberoamerica is rare (Korez-Vide, et.al 2014) and at the city level non-existent.

The objective of this special issue is to integrate the International Business, Economic Geography and Institutional perspectives to generate better insights on the importance of institutional quality on the location and agglomeration of multinational and national companies at the city level.

Examples of research questions of contributions to the special issue include, but are not limited to, the following:

• Does the institutional quality of a city moderate the location decision of a multinational?
• Does the agglomeration and geographic spread of multinationals differ between foreign-owned or nationally owned business networks?
• What factors explain the agglomeration of business in general and multinationals in Latin American cities?
• How to measure the institutional quality of Iberoamerican cities?
• How do regional, country and city factors explain the agglomeration of multinationals in Iberoamerica?

 We invite contributions using various methodologies to address these questions. These contributions could use a multilevel (region, country, city and district (community).  Methodological contributions on how to better measure and validate city institutional quality and agglomeration are also welcome; case studies and descriptive studies are not.

Guest Editor: Dr. Fernando Robles, School of Business, The George Washington University. roblesf@gwu.edu

Submission Process

The submission process will be as follows.

Step 1- Full papers should be submitted through ScholarOne Manuscripts page of Management Research (https://mc.manuscriptcentral.com/mrjiam) no later than August 31st, 2016. Manuscripts should have a maximum of 8000 words, and must include a structured abstract (http://www.emeraldgrouppublishing.com/authors/guides/write/abstracts.htm).

 Do not forget to select this special issue once you login into the system.

 Step 2 - After the blind review recommendations, the guest editor will announce acceptance / rejection decisions by November 31st, 2016.

 Step 3 - Authors of accepted papers will have until December 31st, 2016 to submit their manuscripts incorporating the reviewers’ suggestions.

 Expected publication of accepted papers will be in the second half of 2017.

References

Alcacer, J. (2013). Location strategies for agglomeration economics. Strategic Management Journal, 35, 1749-1761.

Alfaro, L. and Chen, M.Y. (2014). The global agglomeration of multinational firms. Journal of International Economics, 94, 263-276.

Ali, F.A., Fiess, N. and MacDonald, R. (2010). Do institutions matter for Foreign Direct Investment? Open Economic Review, 21, 201‐209.  

Beugeldsjik S., Mumdabi, R., Anderson, U. and Zaheer S.  (2013). The multinational in geographic space- Special Issue. Journal of International Business Studies, 44, 413-546.

Beugelsdijk, S., McCann, P., and Mudambi, R. 2010. Place, space and organization; economic geography and the multinational enterprise. Journal of Economic Geography, 10, 485-493.

Cantwell, J.A. 2009. Location and the multinational enterprise. Journal of International Business Studies, 40, 35-41.

Du, J., Lu, Y. and Tao, Z. (2008). FDI Location choice: Agglomeration vs. institutions. International Journal of Finance and Economy, 13.92-107.  

Dunning, J. H. (1998). Location and the multinational enterprise: A neglected factor? Journal of International Business Studies, 29, 45-66.  

Flores, R., Aguilera, R. Mahdian, A. and Vaaler, P. (2013). How well supranational regional grouping schemes fit international business research models? Journal of International Business Studies, 44, 451-474.

Glaeser, E.L., Porta, R.L., Lopez-­‐de-­‐Silanes, F. and Shleifer, A. (2004). Do institutions cause growth? Journal of Economic Growth, 9, 271-303.  

Goerzen, A., Asmussen, C.G., and Nielsen, B. (2013). Global cities and multinational enterprise location strategy. Journal of International Business Studies, 44, 427- 450.  

Korez-Vide, R., Voller, P. and Bobek V. (2014). German and Austrian foreign direct investment in Brazilian regions: Which are the location choice factors? Journal of Management and Strategy, 5, 68-81.

Krugman, P. (1991). Increasing returns and economic geography. Journal of Political Economy, 99, 483-499.

La Porta, R. Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. (1999). The quality of government. Journal of Law, Economics and Organization, 15, 222-279.

Mengistu, A.A. and Adhikary, B. (2011). Does good governance matter for FDI inflows? Evidence from Asian economies. Asia Pacific Business Review, 17 (3), 281-­‐299.

North, D.C. (1990). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.

Sassen, S. 1991. The global city: New York, London, Tokyo. Princeton: Princeton University Press.

Tan D., and Meyer, K. (2011). Country-of‐origin and industry FDI agglomeration of foreign investors in an emerging economy. Journal of International Business Studies, (42), 504-520.