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How green is the valley? Foreign direct investment in two Norwegian industrial towns
Author(s) -
Jakobsen StigErik,
Rusten Grete,
Fløysand Arnt
Publication year - 2005
Publication title -
canadian geographer / le géographe canadien
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.35
H-Index - 46
eISSN - 1541-0064
pISSN - 0008-3658
DOI - 10.1111/j.0008-3658.2005.00093.x
Subject(s) - norwegian , foreign direct investment , economic geography , investment (military) , business , capital (architecture) , natural resource , dependency (uml) , economics , geography , political science , engineering , politics , philosophy , linguistics , archaeology , law , macroeconomics , systems engineering
Since the early 1900s, foreign direct investments (FDIs) have greatly affected Norwegian society, especially peripheral communities. This article analyses how transnational corporations (TNCs) use territory down to the local level, and how this complex relationship between firms and spaces is shaped by attributes related to the TNC and the characteristics of the local economy. An extensive literature discusses different types of effects and spillovers, such as vertical supply linkages and spin‐offs, but theoretical explanations of outcomes are more difficult. The literature links positive as well as negative outcomes to local conditions and to the investment motives of the entity making the FDI, but says little about how these vary with types of business, communities and national economies, and how these interactions generate different outcomes. We conclude that FDIs have different abilities to transform an area. We argue that FDI can trigger path‐dependent dependency when it is dominated by economic capital and path‐dependent development when it consists of a balance of economic capital, social networks and knowledge. This variation in the effects of FDI is illustrated by an empirical analysis of two industrial towns in Western Norway, one with natural resources and the other with intangible technology resources.