Essays in Honor of John Dunning
Edited by H. Peter Gray
Chapter 10: Towards a Theory of Hegemon-led Macro-clustering
Terutomo Ozawa INTRODUCTION In conjunction with studies on agglomeration economies in spatial clusters, sub-national regional clusters (microregions) have been the focus of research by many scholars (inter alia: Piore and Sabel, 1984; Porter, 1990; Krugman, 1991; Saxenian, 1994; Markusen, 1996; Ohmae, 1995; Nachum, 1999; Dunning, 2000a). Recognizing the role of multinational corporations as a potent instrument of globalization, some (Dunning, 2000b; Blomstrom, Globerman and Kokko, 2000; Eden and Monteils, 2000) examined FDI activities in ‘macroregions,’1 a concept used in Dunning (2000a), but little is said – and understood – of the dynamics of supranational macro-clusters as another form of agglomeration. Furthermore, microregions are usually treated as the creatures of historical accident, and their connectedness with macro-clustering remains unexplored. This is rather surprising, given the fact that the EU, NAFTA, MERCOSUR and other regional arrangements, for example, are basically designed and created, at the policy level, as macro-clusters. Sure, they have already been analyzed as instances of economic integration, and some relevant theories – notably the theory of trade creation vs. diversion (Viner, 1950) and the theory of optimum currency area (Mundell, 1961) – have been advanced. But these theories are by nature static in analysis. True, usually mentioned are the ‘dynamic gains’ from expanded markets, such as raised eﬃciency due to increased competition, scale economies and stepped-up R&D, and a stronger bargaining power vis-a-vis the outside world. These are, however, only ‘one-time gains’ (Gray, 2002a) and merely the ‘adjustment’ eﬀects of an enlarged economic unit, not the dynamic causes of...
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