A Marshallian Approach to the Eclectic Paradigm of Foreign Investment: The Clustering of Film TNCS in Central London

Lilach Nachum and David Keeble

Working Papers from Centre for Business Research, University of Cambridge

Abstract: This study is designed to examine the effect of the economies arising from the concentration of economic activity in close geographic proximity on the investment activities of TNCs. Using the eclectic paradigm as the theoretical framework, the study explores the extent and the ways in which economies of agglomeration affect the ownership advantages of TNCs, influence their choice of modality to serve foreign markets and form part of the location advantages of a given locality. In addressing these issues, the study focuses on a set of media industries which has clustered within a distinct part of London, a pattern which suggests that TNCs in these industries derive certain benefits from being located in proximity to other firms in their own and in closely related industries. The study shows that the impact of agglomeration economies varies considerably by the type of investment, and the economies arising from agglomeration affect the ownership advantages of TNCs to varying degrees, and limit the mobility of those most affected by them. Finally, while agglomeration economies modify the value of certain location advantages, they have limited impact, if any, on others.

Date: 1999-03
Note: PRO-1
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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp119

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