- Europe is one of the three world regions with significant concentrations of enterprises able to determine the fate of their subsidiaries. The other two are North America and East Asia
- Foreign subsidiaries in Europe constitute a lower proportion of all subsidiaries in California, for instance
- Apart from London and Paris, the European core is the preferred location for multinational corporations and their subsidiaries
- In countries with one dominant centre, subsidiaries are mainly located in the capital city. For polycentric countries this is not the case
Observations for policy
Regional development policies and EU cohesion policy rely on appropriate forms of interventions that can target territorial development opportunities and challenges.
It is important to consider risks and vulnerability when thinking about regional competitiveness and attractiveness for investments, but also structures and mechanisms to create resilience concerning the economic orientation and future.
The role of multinational companies in addressing global development challenges is mentioned within the Europe 2020 strategy. It is also part of the debate about EU Structural Funds post 2014 and the EU research policy within the framework of Horizons 2020. Smart growth and competitiveness are important features of European policies, as well as for regional development all over Europe.
Multinational firms play an important role in this context.聽 The key question is to know whether major decisions are made about location and relocation of companies. The ability to address this issue by multinational firms gives more importance to the city or region on which the firm is located.
In this map the hierarchy of metropolitan regions is based on the location of multinational corporations and their subsidiaries. Local links are excluded between the owner and its subsidiaries located within the same metropolitan area in order to capture the international power of economic decisions.
Europe is one of three global regions with significant concentrations of enterprises able to determine the fate of their subsidiaries. The other two are North America and East Asia.
Foreign subsidiaries in Europe constitute a lower proportion of all subsidiaries in California, for instance. In reality, Japan and USA are those who possess control functions over many firms. Apart from the duality between London and Paris, there is a dominance of capital cities, particularly in the core area.
Capital cities host the majority of foreign subsidiaries, at least in national urban systems dominated by one single city that concentrates wealth and services. This holds true for cities located in France, Great Britain, Greece or Portugal. To a certain extent the same can be observed in Spain, where Madrid concentrates more foreign companies than Barcelona, or Switzerland where Zurich dominates largely Geneva and other Swiss cities. The dominance of capital cities is not true for countries with more polycentric urban systems, such as Italy or Germany.
Concepts and methods
In order to measure the position of cities through such corporation networks all direct and indirect subsidiaries of the first 3.000 worldwide business groups in the ORBIS database have been analysed. This resulted in a sample of 400.000 subsidiaries located all over the world linked by 600.000 financial links which are directly or indirectly owned by the main first 3.000 groups. These subsidiaries are located in metropolitan areas and the network created by the ownership relations was then analysed using the standard network centrality and linkage analyses.