States and Firms on the Periphery: The Challenges of a Globalizing World

One of the primary features of globalization has been the growth and spread of multinational enterprises (MNEs), and their increasing significance in the economies of almost all countries, whether large or small, developing or industrialized. MNEs have sought to spatially distribute their value-adding activities globally to not only take advantage of market opportunities but also to exploit different specialized resources and capabilities that are unique to particular locations. In other words, in response to increasing cross-border competition and rivalry, firms have increasingly sought to organize their activities internationally to achieve greater efficiency in their value-adding activities, and thereby optimizing their market share and rent generation.