The local co-evolution of firms and governments in the Information Age

Abstract

The governance structures of the value-creating activities of MNEs have evolved towards more networked forms that are geographically highly concentrated and involve partnering with diverse actors. The experimentation that takes place within these corporate networks has a parallel on the government side, where subnational governments, and particularly cities as hubs of economic activity, have increased their profile and level of cooperative activity. We argue that engagement in these partnerships is an essential way in which firms and governments co-evolve and create the basis for sustainable economic growth in the Information Age. While the origins of this collaborative form of governance reside in the increasing knowledge intensity of value creation, its implications go far beyond MNE value creation and capture, extending to issues of global governance such as climate change and sustainable development goals. We examine the implications of this process of co-evolution both in terms of the costs of developing the requisite corporate capabilities as well as the legitimacy of these efforts as part of a deliberative democracy.

Foreign direct investment along the Belt and Road: A political economy perspective

“…Fourth, more work is needed that evaluates which dynamic capabilities MNEs need to develop that allow them to better navigate geopolitical forces, and how MNEs can help shape the geopolitical context. There is growing acknowledgement in the field of IB that firms and locations co-evolve as they adjust to shifts in the global economy (Cantwell et al, 2010;Lundan & Cantwell, 2020). While most studies have focused on contextualizing institutions to interpret such co-evolution patterns, we call for more work on the influence of the geopolitical context on firm-location coevolution.…”

Mechanism of Enterprise Green Innovation Behavior Considering Coevolution Theory

“…Flier et al [ 25 ] found that large and mature organizations usually adopt strategic renewal behaviors to adapt to the national institutional environment. Lundan et al [ 28 ] conducted a study on the coevolution of multinational enterprises and local governments in different geographical environments. Furthermore, the development of coevolution theory has shown a multidisciplinary intersection trend between environmental science [ 24 ] and economics [ 29 ].…”

From the editors: Reflections on the nexus of complementarity between international business research and the policy practitioner community

“…While Buckley ( 2021 ) emphasizes the partly endogenous nature of some of the ongoing changes in the global economy, Srinivasan and Eden ( 2021 ) examine the strategic choices available to MNEs in the context of profound technological and political change. Both perspectives are evolutionary in the sense that multinational firms react to changes in their environment and introduce new technologies and governance solutions to ensure continued viability (Lundan & Cantwell, 2020 ). Aside from extreme periods such as the COVID-19 pandemic when governments intervene in markets with a heavy hand, the co-evolutionary process between firms and other actors in the economy changes the configuration of GVCs in incremental steps.…”