Location, Competitiveness, and the Multinational Enterprise

This article provides an overview of the key insights resulting from recent international business research on the interactions between location advantages and the competitiveness of multinational enterprises (MNEs). It consists of four main sections. First, the evolution of the location advantage concept in the international economics literature is discussed. Here, it appears that the international economics literature has substantially broadened its analytical scope in the last few decades. However, the field of international business research had gone even further in its analysis of the interactions between location and MNE competitiveness because of its in-depth focus on the actual behaviour of MNEs. The complex nature of location advantages for MNEs is discussed in more detail in the second section. The third section describes the intellectual foundations of a spatial analysis of MNE activities. Finally, the fourth section discusses the relative contribution of home country specific advantages (CSAs) and host CSAs to MNE competitiveness.