Location Choices Under Strategic Interactions

Alcácer, Juan; Zhao, Minyuan; Dezső, Cristian L.

doi:10.2139/ssrn.2101767

Cited by 7 publications

(12 citation statements)

References 39 publications

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“…Further, MNEs are interconnected through the supply side as they share common suppliers which is a further source for strategic linkages. In this respect, our contribution differs from Alcácer and Chung (2007) and Alcacer et al (2015), where the location choices of firms are analyzed assuming an oligopolistic industry. Papers along this promising line of research explore how rivalry and differential knowledge accumulation among competitors is affected by the multinational enterprises' geographic expansion across countries.…”

Section: Discussionmentioning

confidence: 99%

Knowledge Spillovers, Congestion Effects, and Long-Run Location Patterns

Bischi

Kopel

Lamantia

et al. 2017

The Economy as a Complex Spatial System

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Abstract.We introduce an evolutionary two-country model to characterize long run location patterns of the manufacturing activities of competing multinational enterprises. Firms located in country 1 can decide to offshore their manufacturing activities to country 2. The profitability of production in a country depends on several factors: unitary costs of production, the number of firms that are located in each country, within-country spillovers, and cross-border spillovers. Furthermore, profits in country 2 are influenced by congestion costs. Country 1 is assumed to be technologically advanced and has an advantage in terms of internal spillovers. In contrast, country 2 offers lower production unit cost which, however, may be offset by congestion costs. The firms' (re)location choices are based on a simple comparison of current production costs obtained in the two countries and the dynamics of switching is modeled by a simple replicator dynamics. The global analysis of the resulting one-dimensional dynamical system reveals that a large advantage in terms of unitary production costs encourages the firms to off-shore manufacturing activities to country 2. This off-shoring process stops when congestion costs offset this advantage of country 2, even though congestion costs do not cause all manufacturing activities to be re-shored to country 1. The re-shoring process can be accelerated by an increase of within-country spillovers in country 1, while cross-border spillovers tend to favor a geographic dispersion of manufacturing activities and make location patterns that lead to suboptimal long run outcomes less likely.

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Section: Discussionmentioning

confidence: 99%

Knowledge Spillovers, Congestion Effects, and Long-Run Location Patterns

Bischi

Kopel

Lamantia

et al. 2017

The Economy as a Complex Spatial System

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“…Moreover, the results show that firms adopt this relational approach because political commitment is not enough to actuate socio‐technical change in cities. While most of the innovation literature focuses on technological knowledge spillovers in technological partnerships (Kwak et al, ; Alcácer et al, ; Bresciani and Ferraris, ), our research revealed that gaining knowledge on local market and institutions through a relational approach is at least as important. Overall, this relational approach would increase trust and commitment to Smart City initiatives, facilitate better project management and shared responsibility and loosen bureaucratic control.…”

Section: Discussion and Final Remarksmentioning

confidence: 66%

“…A huge stream of literature argues that physical proximity in cities may reinforce knowledge spillovers (Alcácer et al, ). However, not all the cities have the same favourable conditions.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

How to select the right public partner in smart city projects

2016

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Firms that want to exploit Smart City's opportunities need to cooperate with local governments. From a managerial point of view, there is scant research on how to select public partners in Smart City projects. In fact, while there are several cities claiming to be ‘smart’, not all cities fulfil the essential requirements for successful Smart City projects. This paper shows how to build successful public–private alliances in Smart Cities and, more specifically, how to select the right city to test, develop or sell smart technologies. This study uses a multiple‐case research design and follows an exploratory and qualitative methodology. The results show that firms improve the success of their projects if they assess three main aspects of partner selection, these being partner complementarity, commitment and compatibility. The paper, therefore, provides several managerial implications regarding how firms may be more effective in selecting where to start their Smart City projects and how public organisations may become more attractive. Finally, academic implications, limitations and future lines of research are presented.

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“…Finally, a growing stream of papers has demonstrated that the behavior of MNEs -which are typically active in oligopolistic markets -is crucially influenced by strategic interaction with various stakeholders like rival firms, input suppliers, and regulators (e.g. Kopel et al 2015;Head et al 2002;Leahy and Pavelin 2008;Leahy and Montagna 2009;Alcácer et al 2013Alcácer et al , 2015Sanna-Randaccio and Veugelers 2007;Belderbos et al 2008;Wu and Zhang 2014).…”

Section: Conclusion and Future Challengesmentioning

confidence: 99%

Looking Ahead: Part III

Bischi

Kopel

2017

The Economy as a Complex Spatial System

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Abstract. In the past decades, manufacturing firms have increasingly off-shored main activities along their value chain to emerging economies in order to take advantage of lower costs. More recently, however, the trend of re-shoring has gained increasing attention. We argue that more research is needed to fully understand firms' motives for bringing their activities back home. Furthermore, multinational firms need to evaluate their activities along environmental, social and governance dimensions. Research on corporate social responsibility strategies of multinational enterprises and their global value chains is still scarce, however.

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Location Choices Under Strategic Interactions

Cited by 7 publications

References 39 publications

Knowledge Spillovers, Congestion Effects, and Long-Run Location Patterns

Knowledge Spillovers, Congestion Effects, and Long-Run Location Patterns

How to select the right public partner in smart city projects

Looking Ahead: Part III

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