Back to the Future
Chapter 11: The Role of FDI in the Regionalisation/Globalisation Debate with Masataka Fujita and Nevena Yakova
1. INTRODUCTION In a perceptive and important contribution to our understanding about the geographical distribution of the sales (by destination) of the world’s largest companies, Rugman and Verbeke (2004) have uncovered some interesting facts. These facts they use to argue the case that the sales of the great majority of the largest firms in the world (as identified by them)1 are concentrated either in the region in which their head offices are located, or in that of one other region. Indeed, they found that in 2001, 321, or 84 per cent, of the firms identified were mainly home region oriented, and another 25, or 5 per cent were bi-regional (i.e. they operated in two of the three regions considered by the authors).2 In their opinion, only 9 of the 380 firms could be considered genuinely global.3 In the introduction to their paper, Rugman and Verbeke state that most previous research on the geographical distribution of activity by multinational enterprises (MNEs) had used macro level information on the stocks and flows of foreign direct investment (FDI). These they contend (and rightly so) need to be supplemented by sales and other data supplied by individual MNEs. Part of their rationale for this contention rested on the imperfect quality, inconsistency or inappropriateness or some of the macro-data; and part on the observation (the source of which they do not give: Rugman and Verbeke, 2004, p.3) that the largest 500 MNEs account for 90per cent of the world’s FDI stock.4 While appreciating...
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