each of these poles are significantly more intense than those between the three
poles (Dicken, 1998; Rugman, 2000).
This regional dimension to the process of internationalization has received
insufficient attention (Hay, 2000). In their critique of the globalization thesis,
Hirst and Thompson (1996, 1999) produce evidence which they interpret as
showing that, above all, multinational corporate activity is heavily concen-
trated in home countries. Yet this same evidence points also to the extent to
which European MNCs are regional in the scope of their activities. Their analy-
sis of the geographical distribution of assets and sales in 1992 of MNCs head-
quartered in France, Germany, the Netherlands and the UK shows significant
regional concentration on both counts, a finding echoed by Van Tulder et al.
(2001) (see Box 18.1). Differences between ‘home’ countries are evident too:
French- and German-based MNCs are more home, and less extra-European,
focused than their Dutch and British counterparts, as Van Tulder et al. (2001)
also observe. Even so, Pain (1997) reports that since 1990 UK-based MNCs have
oriented overseas direct investment more towards western Europe and less
towards the US. Regional concentration of economic activity of European-
based MNCs suggests that the construct of the Eurocompany is useful analyti-
cally in accounting for developments.
Box 18.1 The European regional dimension to economic
internationalization- In 1997, intra-EU trade accounted for 61 per cent of EU exports and a
further 13 per cent of EU exports went to non-EU European countries
(Rugman, 2000). Between 1980 and 1998, analysis of the destinations of
exports from two different EU member states, Denmark and the UK, indicates
a significant Europeanization of trade relations in both cases (Hay, 2001). - Analysing 200 of the world’s largest firms, Van Tulder et al. (2001: 63)
remark on the extent to which the European-based companies remain
regionally concentrated; in 1997 Europe accounted for some 70 per cent
of both assets and sales for these companies. - In 1997, the largest share of the outward stock of foreign direct invest-
ment from EU-based companies, 41 per cent, was located in other EU
countries (Rugman, 2000). - Cross-border mergers and acquisitions by EU-based companies primarily
took place within the European region between 1987 and 1999, with the
exception of UK-owned companies where North America also accounted
for a substantial proportion (United Nations, 2000)
The concept of the Eurocompany also implies a direction of development
over time. Most evidently, companies have invested considerable resources in
establishing market servicing and production operations on a pan-European
basis. This is reflected in the wave of mergers and acquisitions from the
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