Abstract
Building on recent international business research that embraces insights from economic geography, we hypothesise that MNEs locating a high share of the total number of their subsidiaries in global cities (which we conceptualize as global city location intensity) exhibit higher financial performance. We further argue that knowledge-intensive firms benefit more from global city location intensity than less knowledge-intensive firms. We also posit that multinationality (international geographic dispersion) negatively moderates the relationship between global city location intensity and financial performance. We test our hypotheses on a sample of 497 MNEs and find strong support for our predictions. We contribute to the literature by introducing the notion of intensity into the relationship between global city locations and financial performance and call for considering scale effects when examining locational decisions and their consequences.
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