Extract

As we have already seen in Chapter 6, in the current phase of globalization the importance of the role played by trade blocs and areas of integration in the world economy has increased. At the same time, the importance of multinationals has increased (Rugman 2000, 2005). For example, if we take the case of the three super-regions of US, EU and East Asia, we find that the average same-region sales share of the world’s top 500 MNEs is over 70 per cent (Rugman 2005). Moreover, as discussed in Chapters 4 and 5, MNEs play a crucial role in facilitating knowledge flows across space, and this is particularly evident within super-regions. However, along with FDI flows, the overwhelming dominance of developed economies in global R & D effort is still very marked. Of the 2600 foreign affiliates in the global economy whose primary role is R & D, almost 70 per cent are still located within the triad of US, EU and Japan (UNCTAD 2005). In terms of global shares, the geographical origins of global R & D reflect almost exactly the geographical origins of FDI outflows and, if anything, they are slightly even more skewed in favour of most developed macro-regional blocks.