Örjan Sölvell

PurposeThis paper aims to investigate whether multinational enterprises (MNEs) have a heightened propensity to seek density in their location choices and to engage in locations with inherent value-creating potential compared to local firms.Design/methodology/approachDrawing on economic geography and using a unique, geographically detailed firm-level data set covering all firms in Sweden, the authors analyze subnational patterns in the location choices of foreign-owned firms compared to those of domestic firms. This study also makes a methodological contribution by exploring detailed subnational patterns down to the level of each plant or office unit's address, within a firm.FindingsThis study finds that MNEs tend to choose locations that are more densely populated and to co-locate with other foreign firms in the market. Contrary to theoretical expectations that local firms should have an advantage due to their local awareness, the findings suggest that foreign multinationals can be more effective at leveraging the economic benefits of location. To explain this finding, the authors discuss the concept of MNEs' relative location flexibility, suggesting that MNEs are well-equipped to strategically target areas that can generate value and contribute to the formation of clusters.Research limitations/implicationsThis research contributes to theories on internationalization, location choice and the formative and nascent dynamics of clusters. The findings nuance assumptions in international business theory regarding the advantages of being embedded in local business systems and the disadvantages of being foreign. The authors also discuss the implications of MNE co-location for location choice and market entry theory.Originality/valueOriginality pertains to the comparative analysis of multinational enterprises and local firms in a subnational context. The concept of MNE relative location flexibility is a novel way of explaining how MNEs can target areas that generate value and contribute to the formation of clusters.

The case profiles the economic development of the Gothenburg region in Western Sweden, and the efforts of the regional economic development agency. During this period the region's traditionally strong automotive cluster started to transform towards e-mobility technologies. The case discusses the role of Business Region Göteborg (BRG), the regional economic development agency, in this process. The case includes exhibits with some key facts about the regional economy, the institutions engaged in economic development in the region, and the structure of BRG.

The present paper explores a historical case of a location where a group of merchant families established powerful positions over many generations, involving both the international trade of fine wine and human beings sold as slaves. These families lived in Bordeaux, one of the largest trading centers for trade of enslaved humans in the world in the late 18th and early 19th centuries. These trading families were concentrated in a few quarters of the city, and most of the leading merchants were active in both lines of trade. More importantly, this paper shows that three of the key trading institutions, namely practices defining 'product quality', product classes and how prices were set, were remarkably similar in both fields of trade. This, in turn, facilitated a smooth and successful substitution of trade from enslaved humans into fine wine when abolition was imposed in the early 1800s. Overall, a story of the darker side of agglomerations is revealed. This study facilitates a new theoretical understanding of how wealth and prosperity can be secured over long time periods, through transposition of institutions between fields, and driven by forces of proximity.

Purpose: This paper empirically aims to examine the relationship between collaboration initiatives of cluster organizations (COs) and improved innovation and financial performance among cluster firms. Moreover, the paper proposes a method for the development of cluster initiatives and evaluating their performance. Design/methodology/approach: COs in North Mid Sweden have been studied between 2005 and 2014, where 12 COs have focused on collaboration, ranging from process industries, such as forestry, paper and steel, to tourism and information and computer technology (ICT). A survey method was used to collect data for some 1,000 firms engaging in cluster activities. A new method of analysis, which associates initiatives of COs with cluster members’ innovation and financial performance, has been developed and used in the paper. Findings: The paper finds that cluster initiatives (enhancing collaboration across different types of actors in clusters) improve innovation and financial performance among involved cluster firms. But the effect of the cluster initiatives depends, to a large degree, on the policy of the CO. Results show large differences in performance among cluster initiatives, leaving room for the benchmarking and cross-cluster learning. Practical implications: The new method proposed in this paper can help to formulate and implement cluster initiatives. Evaluation of COs can be improved through the new method. Originality/value: The major contribution of this work is the association of CO initiatives with the performance of cluster member firms. Additionally, this work provides a new statistical instrument for assessing the impact of cluster initiatives on cluster members’ performance. © 2017, © Emerald Publishing Limited.

The downsizing of traditional employment in Arjeplog, a rural village in Northern Sweden, resulted in some taking the opportunity to become self-employed. Some locals exhibited extraordinary knowledge about ice, which became an important core competence for a new industry and later a whole cluster. Regional entrepreneurs met German engineers who were searching for a location for winter testing of new car models and components. Social capital such as trust, a friendly community and informal business relations contributed to the Germans' decision to try winter car testing in Arjeplog. Based on some factor endowments and entrepreneurship a new cluster took form. Factors like arctic climate and infrastructure together with the importance of proximity are captured in Porter's diamond. However, the case shows that these factors alone are not sufficient to explain the evolution of the cluster. The entrepreneurial environment and the attitude of the community affect social capital. The strength of relationships and the emergence and presence of networks and organisations facilitate co-operation and the formation of new, fruitful relationships. The entrepreneurs in each phase, aided by new values and norms, took the cluster to a new level. These elements combined contributed to a positive spiral and growth of the cluster, both through attraction of inward investment and immigration and through a redeployment of local resources and capabilities. This case shows that there are different needs in each phase of the cluster evolution.

Purpose – The purpose of this study is to analyze how The Competitive Advantage of Nations project led by Professor Michael E. Porter has opened up new perspectives on competitiveness of nations and firms for scholars, practitioners and policymakers. With the publication of The Competitive Advantage of Nations (CAON) book in 1990, Professor Michael E. Porter opened up a whole new perspective on competitiveness and clusters, including both new research avenues and new perspectives for practitioners and politicians. By questioning the traditional, more static and macroeconomic, views on competitiveness, he opened up for a new model of microeconomic drivers of long-run firm competitiveness. The new conceptual model, the Diamond model, pointed to the importance of healthy rivalry and dynamic clusters, in the proximate firm environment, as central to our understanding of how firms build sustainable competitive advantages in global markets. Design/methodology/approach – Literature review and conceptual. Findings – To distinguish between short-term, more static, and long-term, more dynamic competitiveness of firms, and the competitiveness of nations and regions, the paper proposes a conceptualization into three interrelated concepts: competitiveness and innovativeness of firms, and attractiveness of nations and regions. Originality/value – This paper summarizes 40 years of Professor Porter’s seminal research with a focus on the CAON project that began with the 1990 book on The Competitive Advantage of Nations. The paper proposes three interrelated concepts to cover issues of competitiveness: competitiveness (firm’s static advantages), innovativeness (firm’s dynamic advantages) and attractiveness (national/regional advantages).