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Geography of Multinational Corporations and Functional Specialization in Chinese Cities

Author

Listed:
  • Canfei He

    (Peking University)

  • Xiaojun Xiao

    (Beijing Institute of Architectural Design)

Abstract

There has been a transformation of urban structure from mainly sectoral to functional specialization. This transformation is inextricably interrelated with changes in firms' organization. Some cities host upstream functions of the value chain while others attract production and assembly. This paper investigates the tendency toward functional specialization in Chinese cities by exploring divisions in multinational corporations' (MNC) business operations in China. Based on data from Fortune Global 500 MNCs during 1979-2008, the study finds that MNCs have gradually expanded in China, both functionally and geographically. In that process, similar functions tend to agglomerate in certain cities while complementary functions co-agglomerate in others. The analysis indicates that Chinese cities may start to move toward functional specialization, with upstream functions clustering in the top tier cities of the political and economic urban hierarchy.

Suggested Citation

  • Canfei He & Xiaojun Xiao, 2011. "Geography of Multinational Corporations and Functional Specialization in Chinese Cities," Symphonya. Emerging Issues in Management, Niccolò Cusano University, issue 1 Global .
    • Handle: RePEc:sym:journl:159:y:2011:i:1
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    File URL: https://symphonya.unicusano.it/article/view/2011.1.04he.xiao
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    References listed on IDEAS

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    1. Hideki Yamawaki, 2004. "The determinants of geographic configuration of value chain activities: Foreign multinational enterprises in Japanese manufacturing," International Economics and Economic Policy, Springer, vol. 1(2), pages 195-213, January.
    2. Zhao, Simon X.B. & Cai, Jianming & Zhang, Li, 2005. "Asymmetric information as a key determinant for locational choice of MNC headquarters and the development of financial centers: A case for China," China Economic Review, Elsevier, vol. 16(3), pages 308-331.
    3. Juan Alcácer, 2006. "Location Choices Across the Value Chain: How Activity and Capability Influence Collocation," Management Science, INFORMS, vol. 52(10), pages 1457-1471, October.
    4. Cheung, Fanny S.L. & Leung, Wing-Fai, 2007. "International expansion of transnational advertising agencies in China: An assessment of the stages theory approach," International Business Review, Elsevier, vol. 16(2), pages 251-268, April.
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    Cited by:

    1. Canfei He & Yi Zhou, 2015. "Firm Dynamics and Regional Inequality of Productivity in China," Papers in Evolutionary Economic Geography (PEEG) 1527, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2015.
    2. Chiara F Del Bo, 2014. "Foreign and Spatial Spillovers in the European Electricity Sector," Symphonya. Emerging Issues in Management, Niccolò Cusano University, issue 1 Global .
    3. Aleksandra Kordalska & Magdalena Olczyk & Roman Stöllinger & Zuzana Zavarská, 2022. "Functional Specialisation in EU Value Chains: Methods for Identifying EU Countries’ Roles in International Production Networks," wiiw Research Reports 461, The Vienna Institute for International Economic Studies, wiiw.

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