International Handbook of Globalization and World Cities
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International Handbook of Globalization and World Cities

Edited by Ben Derudder, Michael Hoyler, Peter J. Taylor and Frank Witlox

This Handbook offers an unrivalled overview of current research into how globalization is affecting the external relations and internal structures of major cities in the world.
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Chapter 19: Centrality, Hierarchy and Heterarchy of Worldwide Corporate Networks

Ronald Wall and Bert van der Knaap


Ronald Wall and Bert van der Knaap INTRODUCTION Although globalization has developed for centuries, its magnitude in terms of trade and foreign direct investment (FDI) has increased dramatically (Barba Navaretti and Venables, 2004). Facilitated by reduced transportation costs, advanced technologies, increased market openness and trade liberalization, this inter-organizational system connects firms and cities together. Because only a handful of multinational corporations (MNCs) control most global FDI and trade (Rugman, 2005), their influence on the fate of cities and nations is clear. These investments increasingly concentrate within and between a limited number of nations, creating an international division of labour that corresponds to labour divisions between different levels of corporate hierarchy (Hymer, 1972). However, despite these important global changes, economic geography still presents itself as the science of the meso-scale (Grabher, 2006), leading to an ‘overterritorialized’ view on regional development. Instead a strategic coupling of global production networks and regional assets should be pursued in which activities are mediated across different geographical and organizational scales (Coe et al., 2004). In this light, the topology of the world city system will be explored, concerning different levels of corporate ownership, centrality, hierarchy and heterarchy of cities within the global network. The chapter starts with a theoretical discussion of hierarchy and heterarchy within networks, followed by an explanation of the data and methodology used. Next, the results are discussed, followed by conclusions. NETWORK HIERARCHY AND HETERARCHY Because economic action is fundamentally social (Polanyi, 1944; Grabher, 2006), it can be argued that social network analysis...

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