Evalution of relation between integration in the world economy and multinational companies in terms of economic geography

It is evident that economic activities around the world, despite the processes of integration aftermath of 1980, are gathering further in certain centers. Economic activities are not distributed worldwide equally and the world economy exhibits a center and periphery structure. The phenomenon of agglomerations of economic activity in certain areas necessiates accounting the economic geography in research. Economic geography mainly concerns with the question of what the spatial distribution of economic activity is. The main reason of the growing interest in spatial issues in recent years is the research program named the New Economic Geography. Extensive studies on the spatial issues are being carried out using this new approach. In addition to The New Economic Geography approach, heterodox approaches to geography, other than the mainstream approach are also available.The fundamental objectives of this study are to research the spatial reflection of the integration process occuring in the world economy, the role of multinational companies in the process, and the factors that affecting the locational preferences of the companies, by The Economic Geography approach. Our study consists of two main parts. The Spatial reflections of integration processes in the world economy and the increasing role of multinational companies recently are the subjects of the first chapter. In the second part of the study, causes of the uneven geographical distribution of economic activities and the role of multinational corporations' location preferences are studied, both theoretically and experimentally. The results of the experimental analysis are, in general, compatibility with the New Economic Geography model. However, I also questions the experimental results from a different theoretical perspective. In conclusion, this study shows that in every period of the capitalist world economy, decisions of what to produce and how to produce depend on the capital?s profit seeking behaviour for accumulation and re-accumulation. In particular, with the capital embodied as multinational companies in the post-1970 period and in globalized world markets, production decisions are determined within the framework of strategies and evaluations of profit maximization of multinational companies.Keywords: New Economic Geography, Home Market Effects, Foreign Direct Investment, Multinational Corporations, Spatial Arrangement