Economic Geography

Corporate dynamics and the multi-regional firm
A useful way to assess the current state of knowledge of the corporate dynamics
of a multi-regional firm is to recognise that changes in the ‘spatial configuration’
of its production system reflects the operation of three mechanisms: the entry of
sites to the system, the exit of sites from the system and the expansion/contraction
of those sites which are maintained as continuous elements within the produc-
tion system. A pioneering attempt to measure the relative importance of 
these mechanisms is provided in Healey (1983). These mechanisms have
received different degrees of attention from researchers within economic geo-
graphy and it is useful to consider each in turn. Over the last few decades the
focus of research has moved from entries, through exits, to the present interest in
repeat investment.
Entries
Additions to the corporate system take the form branch plants and acquisitions.
Acquisitions attracted little attention (an important early exception is Leigh and
North 1978) but the factors influencing branch plant location decisions were
widely researched in the 1950s–1970s (see, for example Keeble 1968) and became
increasingly sophisticated both conceptually and in the analytical techniques
applied to the data. In the United Kingdom good data sets also helped work in
Manufacturing, corporate dynamics, and regional economic change
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this area. There was a strong policy push on this research since new plants
resulted in new jobs (even if displacement effects were ignored). Further, it was
demonstrated quite convincingly that despite comments that locations were
selected by ‘pins in a map’ there were sufficient regularities in the patterns
produced in the establishment of branch plants to admit to an underlying logic.
Even those cynics who regarded many sites as ‘golf course locations’ were
silenced by the recognition that golf courses could be found in close proximity to
most potential locations and therefore did not provide a way of discriminating
between those locations.
An important conceptual advance was the recognition that different factors
might apply at different scales. Access to a freeway might govern location within
a town whilst the particular characteristics of a labour market might influence the
selection of a town. Indeed, such was the progress in this field that Fothergill and
Guy (1990: 43) were able to comment that ‘the conclusions of these . . . (branch
plant) . . . studies were sufficiently unambiguous and consistent that . . . little further
research has had to be devoted to understanding branch openings’. It will be argued
below that the dismissal of the need for further research was perhaps premature.
Exits
Despite the recession and job losses from 1980 onwards geographers were slow
in turning their attention to the geography of job loss. The reasons for this were
varied. Job loss was less important than job creation in policy terms. Large firms
tended to be reluctant to talk about plant closures. Further the public were often
taken in by the corporate ‘excuse’ of a fall in demand explaining the closure of a