There is no such variable defined or referenced in compile.el.
Sorry, I meant "compilation-directory". Hopefully, this hasn't created
too much confusion.
As far as I know, setting compile-command to "cd .." first is the right
way to do it.
That basically does the job, but then I cannot use the links in the
compilation output to open the files by clicking on them. My hope was
that this is enabled if 'compilation-directory is set correctly.
Furthermore, the "cd.." construction is not really handy.
Maybe, let me generalize my question a bit: Is there any way to use an
elisp function in a local variable specification?