Entrepreneurship, Social Capital and Governance
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Entrepreneurship, Social Capital and Governance

Directions for the Sustainable Development and Competitiveness of Regions

Edited by Charlie Karlsson, Börje Johansson and Roger R. Stough

This book highlights the role of entrepreneurship, social capital and governance for regional economic development. In recent decades, many researchers have claimed that entrepreneurship is the most critical factor in sustaining regional economic growth. However, most entrepreneurship research is undertaken without considering the fundamental importance of the regional context. Other research has emphasized the role of social capital but there are substantial problems in empirically relating measures of social capital to regional economic development.
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Chapter 3: The influence of clustering on MNE location and innovation in Great Britain

Gary A.S. Cook, Hans Lööf, Naresh R. Pandit and Börje Johansson


Research on the foreign direct investment (FDI) activities of multinational enterprises (MNEs) has a long and rich tradition (Dunning, 2001). Research on the advantages, disadvantages and processes that arise in business clusters has a similar tradition (Marshall, 1890; Porter, 1998). Whilst it is clear that there is a considerable amount of MNE FDI in clusters (Kozul-Wright and Rowthorn, 1998), that FDI is relatively highly concentrated geographically (Shatz and Venables, 2000) and that this activity is increasing (Nachum, 2003), the body of research on this interface is small (Birkinshaw and Sölvell, 2000). However, it is growing fast in the face of increased globalization, deregulation and advances in information and communication technology, all of which have begun to prompt a re-evaluation of the spatial organization of MNE activity (Buckley and Ghauri, 2004). This chapter adds to the growing number of studies that focus on agglomeration effects at the sub-national scale. The chapter further addresses the neglected question of whether agglomeration promotes outward direct investment (ODI) as well as attracting inward investment. This neglect is somewhat surprising given that a central proposition of Porter (1990), which spurred strong academic and policy interest in clusters, was that location in clusters should promote international competitiveness.

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