City links in multinational firm networks, 2007


Observations for policy

The position of cities in the global economy constitutes an important component for competitiveness. Looking at company structures with subsidiaries within 100km it seems that the core of Europe has an important advantage tightly linked to population density and regional connectivity. Furthermore, it appears that outside the European core area there are only few links that go beyond national borders.

Policy context

The role of multinational companies in addressing global development challenges is included within the Europe 2020 strategy and as well in the debate on the future of EU Structural Funds, and the EU research policy within the framework of Horizons 2020. Smart growth and competitiveness are key features in European policies, as well as for regional development all over Europe. Multinational firms play a particular role in this context. They are often perceived as important players whose presence underlines the international position of an area.

Map interpretation

The map shows local centralities of cities in networks of multinational firms within a distance of 100km. Logically, networks are rather tight in densely populated areas with urban centres in close proximity to each other, including, but not limited to, the core of Europe. However, there are also some interesting links outside this area. For example, Toulouse is linked to Barcelona, while there is not such dense urban network there. The same case is observed between Brittany in France and Copenhagen in Denmark.

Similarly, there are areas where the settlement patterns would suggest tighter links than what can be observed, for instance in Poland, Hungary, Romania and Bulgaria. In those cases, the urban framework could support a regional development of multinational firm networks. Furthermore, it appears that national borders still matters in this context, particularly outside the core area.

Concepts and methods

In order to measure the position of cities through such corporation networks, all the direct and indirect subsidiaries of the first 3.000 worldwide major business groups in the ORBIS database. This resulted in a sample of 400.000 subsidiaries located all over the world with 600.000 financial links and directly or indirectly owned by 3.000 groups. These subsidiaries are located in metropolitan regions. The ownership and network of these firms have been analysed using standard network centrality and linkage analyses.

The present map focus on proximity, i.e. subsidiaries located within less than 100km. The map shows the number of shortest paths to functional urban areas and weighted b the number of subsidiary links.