This research develops a location-allocation, mixed integer linear model that simultaneously evaluates a substantial number of multinational enterprise (MNE) location and control configurations to yield an optimal network, considering R&D, production and marketing facilities, produced in-house and/or outsourced. The model places special emphasis on the role of intra-firm, inter-firm and extra-firm knowledge flows in addressing cost minimisation considerations of MNEs. A simulation analysis is undertaken to evaluate potential solutions from such a framework and to analyse their consistency with theoretical expectations.
Bibliographical noteFunding Information:
We thank the participants of the Second JIBS/AIB/CIBER frontiers conference and two anonymous JIBS reviewers for their comments, and Arie Lewin for his guidance. We further wish to thank the Recanati fund and the Asper Centre at the Hebrew University for their financial support, and Shai Harel for execellent research assistance.
- Knowledge flow
- Multinational enterprise