ABSTRACT
In today’s global business market, knowledge-intensive firms face the managerial challenge of making localized knowledge available at other places in order to enhance the re-use of good practices, support innovative practice and prevent the re-invention of the wheel. This is particularly pronounced in businesses that provide expertise services to clients. In contrast to manufacturing firms, where global competitive advantage is primarily found in scale economies from international integration (Porter 1986), expertise service firms are much more limited in their spatial division of labor because they work in close interaction with their clients. Generally, the greater the need for individual expertise and the greater the specificity of services, the less scale economies can be gained from global integration (Aharoni 1996).
