Knowledge flows and the modelling of the multinational enterprise

Abstract

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.