ABSTRACT
The global automotive industry is dominated by a limited number of multinational vehicle manufacturers. Within these firms, there is a continuous battle over where to locate R&D and production. For reasons such as national import restrictions and logistics, production tends to be located in several different countries. By contrast, automotive R&D tends to be more concentrated. This is because it is based on a systemic knowledge base, comprising both tacit and codified pieces of knowledge (Breschi and Malerba, 1997). Effective coordination under such circumstances relies on territorial proximity. Still, the global automotive manufacturers must ensure that their R&D maintains a connection with regional market requirements.
