178 J.H.Dunning/International Business Review 9 2000)163-190 increasing dispersion of created assets.and of the need to conclude cross border asset augmenting and/or asset exploiting alliances(Dunning 1995,1998). Contemporary economic events are suggesting that the nature and composition of a country or region's comparative advantage,which has been traditionally based on its pos ession of a unique set of immobile naral resources and capabilities,is nov geared to its ability to and no nclud MNEs all to com their owr researc es ar depen cross-border activities for the and f omic prosperity ba out tha compet ns is becoming increasingly fa shioned by framework within which they operate (Oliver 997 oremus Pauly Reich,1998).In particular,both nation states and sub-national auth orities are becom ing more aware of the need to provide the appropriate economic and social infrastruc ture,both for their own firms to generate the O specific assets consistent with the demands of world markets,and for foreign investors to engage in the kind of value adding activities which advances the dynamic comparative advantage of the immo bile assets within their jurisdiction(Porter,1994;Peck, 1996D九inning 1998) As yet,business strategists,organizational,and marketing scholars have paid little attention to how their own explanations of the timing and geographical profile of international business activity need modifying in the light of the new forms of fd and of alliance ca italism Ther is for example little related factors in either the resource base or the the role of spatially nt se as apabilitie ndeed,Mic hael Porte has as to he econom a source stanc P ive adva thing tha he true advantages tod ay are things t ky,that is no easily movable th may be inferrec tha as th from spatia network linkages become more pronounce so will th locational choice of firms become a more critical strategic variable. It also follows that national and regional authorities should pay more attention to the fostering of immobile complementary assets and cluster related public goods as part of their policies to attract and retain mobile investment As in the case of O specific advantages,scholarly research on the kind of L advan- tages most likely to explain the 'where'of international production has taken on a new trajectory over the past decade.More particularly,the dramatic increase in cross- 25 he authors back178 J.H. Dunning / International Business Review 9 (2000) 163–190 increasing dispersion of created assets, and of the need to conclude cross border asset augmenting and/or asset exploiting alliances (Dunning 1995, 1998). Contemporary economic events are suggesting that the nature and composition of a country or region’s comparative advantage, which has been traditionally based on its possession of a unique set of immobile natural resources and capabilities, is now more geared to its ability to offer a distinctive and non-imitatible set of location bound created assets, including the presence of indigenous firms with which foreign MNEs might form alliances to complement their own core competencies. Recent research not only reveals that some nation states are not only becoming increasingly dependent on the cross-border activities of their own and foreign based corporations for their economic prosperity (Dunning, 1996; UN, 1998);25 but that the competi￾tiveness of these corporations is becoming increasingly fashioned by the institutional framework within which they operate (Oliver, 1997; Doremus, Keller, Pauly & Reich, 1998). In particular, both nation states and sub-national authorities are becom￾ing more aware of the need to provide the appropriate economic and social infrastruc￾ture, both for their own firms to generate the O specific assets consistent with the demands of world markets, and for foreign investors to engage in the kind of value adding activities which advances the dynamic comparative advantage of the immo￾bile assets within their jurisdiction (Porter, 1994; Peck, 1996; Dunning, 1998). As yet, business strategists, organizational, and marketing scholars have paid little attention to how their own explanations of the timing and geographical profile of international business activity need modifying in the light of the new forms of fdi and of alliance capitalism. There is, for example, little treatment of spatially related factors in either the resource based, or the evolutionary theories of the firm; although the role of spatially related agglomerative economies is being increasingly recognized as an important source of learning and innovating capabilities. Indeed, Michael Porter has gone as far as to say that, in the modern global economy, “anything that can be moved or sourced from a distance is no longer a competitive advantage” (Porter, 1998p. 29), and that “the true advantages today are things that are sticky, that is not easily movable”. If this is correct, it may be inferred that as the dynamic gains from spatial clustering and network linkages become more pronounced,26 so will the locational choice of firms become a more critical strategic variable. It also follows that national and regional authorities should pay more attention to the fostering of immobile complementary assets and cluster related public goods as part of their policies to attract and retain mobile investment. As in the case of O specific advantages, scholarly research on the kind of L advan￾tages most likely to explain the ‘where’ of international production has taken on a new trajectory over the past decade. More particularly, the dramatic increase in cross- 25 Especially small states like Switzerland, Belgium and Sweden. 26 Chen and Chen (1998, 1999) have argued that the access to foreign located networks would both augment the O specific advantages of the investing firms, and enable firms which otherwise do not engage in fdi, so to do. The authors back up their assertion that fdi might act as a conduit for strategic linkages by drawing upon the experiences of Taiwanese firms