their Geographical Neighbourhood

Location Strategies of EU-15 MNEs in the European Neighborhood
The Economic Geography literature has more recently focussed on the
fragmentation of international activities of MNEs along functional lines. This
stream of research has highlighted that MNE location behaviour and the
fragmentation of production processes into different functions respond to spatial
concentration mechanisms (Defever, 2006 & 2012; Strauss-Kahn and Vives, 2009).
The concept of Global Value Chains has been more recently added to this debate
with the analysis of the linkages between MNEs location behaviour along value
chains and the innovative and socio-economic environment of host locations
(Crescenzi et al., 2014). These analyses suggest that MNE location of different
business functions/Global Value Chain stages may follow different corporate
strategies according to the characteristics of the investor, the location and the
specific operation offshored. Besides, the location choice is influenced by the
phase of firms’ life cycle, leading to a co-evolution of location decisions and
accumulation of firms’ capabilities (Stam, 2007). Entry modes of MNEs into
foreign markets are also shaped by spatial heterogeneity through the interaction
between the strength of local externalities and firms’ competencies (Mariotti et
al., 2014).
Technological regimes and systems of innovation conditions have been
extensively analysed in the literature at the intersection between Economic
Geography and International Business (Beugelsdijk and Mudambi, 2013). The
international spatial allocation of MNE activities tends to be marked by the
existence of ‘core and periphery’ patterns according to the complexity of
activities (McCann and Mudambi, 2005), leading to differences in territorial
trajectories and growth dynamics and to cumulative causation mechanisms (e.g.
Cantwell and Iammarino, 1998 & 2001). Since technological development tends
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