International operations and location decisions: A firm-level approach

The purpose of this study is to acquire a better understanding of why certain production and distribution facilities remain in Western Europe, in spite of economic globalisation. This paper focuses on companies located in the Netherlands but acting on an international scale. The issue is not addressed at a sectoral, regional, or even more aggregate level-of-analysis. Instead, the firm is the unit-of-analysis, which is why exploratory cases were conducted. The notion of strategic role (Ferdows 1989, 1997) is applied to assess internal motives for staying. The effect of external factors on individual facilities that differ with respect to these internal motives are also looked at. The findings suggest that facilities of high strategic importance within the multinational enterprise to which they belong have high expectations of the political/legal and macroeconomic environment. Furthermore, facilities preceding the major decoupling point in a supply chain seem to be more locationally stable than activities subsequent to this point.