Regional and Global Multinationals: An Examination of Theory and Empirical Evidence from European MNEs (mir-Edition) 3658337362, 9783658337360

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mir-Edition

Christoph Czychon

Regional and Global Multinationals An Examination of Theory and Empirical Evidence from European MNEs

mir-Edition Series Editors Stefan Eckert, Technische Universität Dresden, Dresden, Germany Klaus Macharzina, Stuttgart, Germany Michael-Jörg Oesterle, Universität Hohenheim, Stuttgart, Germany Stefan Schmid, ESCP Europe Wirtschaftshochschule, Berlin, Germany Joachim Wolf, Christian-Albrechts-Universität zu Kiel, Kiel, Germany Martin K. Welge, Technische Universität Dortmund, Dortmund, Germany

Die Tätigkeit auf ausländischen Märkten ist heutzutage für viele Unternehmen unerlässlich geworden. Die Unternehmensführung steht dadurch vor vielfältigen und komplexen Herausforderungen, um das Management der Internationalisierung erfolgreich zu gestalten. Die Schriftenreihe mir-Edition hat das Ziel, die Internationalisierung der Unternehmenstätigkeit und die damit verbundenen Anforderungen an das Management wissenschaftlich zu begleiten und so die wissenschaftliche Diskussion und die praktische Lösung von Problemen voranzutreiben. Dazu sollen innovative und dem Erkenntnisfortschritt dienende Beiträge einer kritischen Öffentlichkeit vorgestellt werden. Neben Dissertationen und Forschungsmonographien sind auch Werke von Praktikern sowie Sammelbände, etwa zu Tagungen aus dem Bereich des Internationalen Managements, Teil der mir-Edition. For many firms, going and operating abroad has become normal. However, managing internationalization is not an easy task. It leads to various and often complex challenges for top-management and middle-management. The mir-Edition has the objective to investigate the internationalization of firms, to stimulate the scholarly discussion and to provide solutions for managerial practice. Therefore, the series includes contributions which advance our knowledge in the International Management and International Business field. In addition to doctoral dissertations, the mir-Edition includes research monographs or edited volumes on fascinating topics related to managing across borders.

More information about this series at http://www.springer.com/series/12393

Christoph Czychon

Regional and Global Multinationals An Examination of Theory and Empirical Evidence from European MNEs

Christoph Czychon Weinheim, Germany Dissertation Otto-Friedrich-Universität Bamberg (Deutschland) & Université Jean Moulin Lyon 3 (France), 2020 This binational doctoral degree thesis was financially supported by the Franco-German University (DFH-UFA).

ISSN 2512-5494 ISSN 2512-6490 (electronic) mir-Edition ISBN 978-3-658-33736-0 ISBN 978-3-658-33737-7 (eBook) https://doi.org/10.1007/978-3-658-33737-7 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Responsible Editor: Anna Pietras This Springer Gabler imprint is published by the registered company Springer Fachmedien Wiesbaden GmbH part of Springer Nature. The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany

Preface of the Supervisors

Recent global challenges such as the Covid-19 pandemic show that the fields of international business, economics and management coincide much more with each other than one would expect when engaging in one of the many streams and discourses available from their research. While scholars from all three fields have studied MNEs from multiple perspectives and numerous data sets, it is rather surprising that the debate on the regionality and globality of MNEs often focuses on the very distinct, yet often replicated set of empiricism provided by Rugman and Verbeke (2004a). Christoph Czychon dedicates specific attention to this research and contributes to the regional and global debate with the unanswered key question: are MNEs regional or global? Christoph Czychon considers this important question by providing an indepth, critical review of the literature on regional and global MNEs and 2005– 2015 empirical data from the European context with the focus on CAC40- and DAX30-listed firms. The extensive literature and the underlying key financial data considered by the author are thereby reviewed and analyzed at the highest level of rigorousness. While the literature review outlines the somewhat repetitive approach used in prior research, the collected longitudinal data indicates that MNEs classified as home region-oriented account for a 48.4% stake of the sample in 2015, which represents a strong decrease in comparison to 81.3% in 2005. The author therefore concludes that the global MNE represents an underestimated phenomenon that needs to be studied much more and carefully. Based on the extension of his results and the separate discussion of distinct cases by industry, Christoph Czychon further demonstrates that both incremental growth and investment activities lead to increases in the firms’ interregionalities. This book, which builds on a rich set of empirical data verified using each firm’s annual reporting to shareholders, provides a solid if not the most profound

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analysis of data that has been conducted on the regional and global debate so far. In addition to the thorough study of these firms, Christoph Czychon outlines an unbiased position where the arguments rest with the data only. In doing so, the book shows that there exist layers of the regional and global debate that have not been fully uncovered yet. Consequently, the perspective and data hereby presented lay the foundation for an opening of a largely one-sided debate into an open field of research. Johann Engelhard Ulrike Mayrhofer

Acknowledgements

First of all, I am especially thankful to Prof. Dr. Ulrike Mayrhofer and Prof. Dr. Johann Engelhard for their supervision, guidance and outstanding support. Thank you for teaming up for the entire process of my doctoral studies in France and Germany. Merci beaucoup, Ulrike, for your invitations to join your team at the Magellan Research Lab as well as for your encouragement to present my ongoing research at conferences in Dubai and Milan! Herzlichen Dank an Sie, Herr Engelhard, for giving me the opportunity to start an academic position at the Chair of International Management in Bamberg and the freedom and flexibility to combine my work as a scientific research assistant with numerous, extensive international stays abroad! A special thanks also goes to the members of the committee that examined and accepted my thesis and participated in the defense in Bamberg. For their efforts, interest and time, I thank Prof. Dr. Dr. h.c. Joachim Wolf (Christian-AlbrechtsUniversität zu Kiel), Prof. Dr. Jacques Jaussaud (Université de Pau et des Pays de l’Adour), Prof. Dr. Björn Ivens (Otto-Friedrich-Universität Bamberg) as well as Prof. Dr. Alain Roger (Université Jean Moulin Lyon 3). The completion of my binational doctoral studies would not have been possible without the additional funding from scholarships. Therefore, my thankfulness goes to the Université franco-allemande/Deutsch-Französische Hochschule (UFADFH), the German Academic Exchange Service (DAAD), the Trimberg Research Academy in Bamberg and the Université de Lyon. Moreover, I am thankful to my former colleagues at the Chair of International Management in Bamberg and the Magellan Research Lab in Lyon for their support. To my family, especially to my parents Jutta and Karl-Heinz, I thank you for your never-ending support, encouragement and understanding, the many visits in Bamberg and in Lyon and providing a home and work environment every time

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Acknowledgements

I needed it. To my girlfriend Kristina, I am forever thankful for your endless patience, the countless sacrifices made by unconditionally supporting me as well as your continuous reassurance whenever I faced difficulties or doubt. In endless gratitude, I dedicate this work to you. Weinheim and Frankfurt, 2020

Christoph Czychon

Abstract (English version)

Multinational enterprises (MNEs) act as the key drivers of world trade and investment activities due to their ability to facilitate (economic) interdependencies across national and regional markets. The international business and management research community has thereby shown a substantial effort to develop theoretical frameworks that explain the reasoning for and assess the status and progress of MNE internationality/regionality. In doing so, previous research, as original as by Rugman and Verbeke (2004a) and as recent as by Rosa et al. (2020), renders the concept of firm-level globalization, in terms of a balanced geographic distribution of sales across the triad, as meaningless and a special but not the general case. For the generation of a holistic view, the present work examines the existing literature from this specific research field and considers longitudinal data from European MNEs for an empirical assessment. The body of literature defining and conceptualizing the different kinds of (international) firms is thus reviewed and analyzed while accessing more than 100 excerpts from peer-reviewed and monographic works. In addition, it is assessed how MNE regionality and globality are operationalized and measured. Likewise, a detailed review and analysis of the research that considers MNE classification systems and contributes to the regional and global debate is provided. Based on 253 data samples, it is thereby shown that 85.0% or 28,575 of the 33,632 firms are classified as home region-oriented MNEs. In consequence, prior research indicates that these MNEs are — despite their interdependencies — dominantly (home-) regional. In extension, the present work contributes to the existing debate on regional and global MNEs based on the analysis of longitudinal data from European MNEs. Using sales and employee data, MNEs listed in CAC40 and DAX30 are substantially increasing in interregional orientation throughout the 2005–2015 period. In consequence and with home-region orientation fading, the stake of

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Abstract (English version)

home region-oriented MNEs decreases by 32.8% from 81.3% in 2005 to 48.4% in 2015. The additional data review suggests that growth into interregional orientation is incremental while selected cases exemplify that the development is not only gradual but also complemented by big steps, such as connected with foreign M&A activities. While these insights are in contrast with the original narrative, the present work provides a comprehensive and updated perspective on regional and global MNEs. Keywords: Globalization, regionalization, home-region orientation, Europe, multinational enterprises, global, regional, France, Germany.

Résumé (Version française)

Les entreprises multinationales (EMN) sont les principaux moteurs des activités de commerce et d’investissement mondiales en raison de leur capacité à encourager les interdépendances (économiques) entre les marchés nationaux et régionaux. La communauté internationale en sciences de gestion a ainsi fourni un effort substantiel pour développer des cadres théoriques qui expliquent le raisonnement et évaluent le statut et les progrès de l’internationalité/ regionalité des EMN. Ce faisant, des recherches antérieures, par exemple Rugman and Verbeke (2004a) ou Rosa et al. (2020), proposent que le concept de globalisation au niveau de l’entreprise, au sens de répartition géographique équilibrée des revenus à travers la triade, est vide de sens et est un cas particulier mais pas général. Le présent travail examine la littérature existante dans ce domaine de recherche spécifique et s’appuie sur des données longitudinales des EMN européennes pour une évaluation empirique. L’ensemble de la littérature définissant et conceptualisant les différents types de firmes (internationales) est ainsi passé en revue et analysé tout en étudiant plus de 100 travaux évalués par des pairs et monographiques. En outre, il est évalué comment la régionalité et la globalité des EMN sont opérationnalisées et mesurées. De même, un examen et une analyse détaillés des recherches prenant en compte les systèmes de classification des EMN et contribuant au débat régional et global sont proposés. Sur la base de 253 échantillons de données, il est ainsi démontré que 85.0%, soit 28,575 des 33,632 entreprises, sont classées comme EMN régionales. En conséquence, des recherches antérieures indiquent que ces EMN sont — malgré leurs interdépendances — essentiellement régionales. Par ailleurs, le présent travail contribue au débat existant sur les EMN régionales et globales sur la base de l’analyse des données longitudinales des

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Résumé (Version française)

EMN européennes. En utilisant les données sur les revenus et des employés, les EMN répertoriées dans le CAC40 et DAX30 sont en forte augmentation dans l’orientation interrégionale tout au long de la période 2005–2015. En conséquence et avec la disparition de l’orientation vers la région d’origine, la part des EMN orientées vers la région d’origine diminue de 32.8%, passant de 81.3% en 2005 à 48.4% en 2015. L’examen des données suggère que la croissance vers l’interrégionalité est progrès-sive, tandis que les cases sélectionnées illustrent que le développement est également complété par de grandes étapes. Ainsi, ces apports contrastent avec les travaux précédent, le présent travail offre alors une perspective complète et actualisée des EMN régionales et globales. Mot clefs: Globalisation, régionalisation, orientation vers la région d’origine, Europe, entreprises multinationales, global, régional, France, Allemagne.

Zusammenfassung (deutsche Version)

Multinationale Unternehmungen (MNU) sind die Haupttreiber der Welthandelsund Investi-tionstätigkeit, da sie (wirtschaftliche) Abhängigkeiten zwischen nationalen und regionalen Märkten fördern. Die internationale Forschungsgemeinschaft für Wirtschaft und Management hat daher erhebliche Anstrengungen unternommen, um einen theoretischen Bezugsrahmen zu entwickeln, der die Gründe für sowie den Status und die Entwicklung der Internationalität/ Regionalität von MNU erläutert und bewertet. Frühere Forschungsarbeiten, bspw. von Rugman and Verbeke (2004a) und Rosa et al. (2020), ordnen dem Konzept der Globalisierung auf Unternehmensebene, d. h. eine geografische Verteilung von Umsätzen innerhalb der Triade, eine bedeutungslose Rolle zu, die einen besonderen und nicht den Regelfall widerspiegelt. Die vorliegende Arbeit untersucht die Forschung aus diesem spezifischen Bereich und berücksichtigt Längsschnittdaten von europäischen MNU für eine eigene Analyse. Die Literatur, welche die verschiedenen Arten von (internationalen) Unternehmungen definiert und konzeptualisiert, wird daraufhin analysiert, wobei auf mehr als 100 Auszüge aus von Experten begutachteten und monografischen Werke zurückgegriffen wird. Darüber hinaus wird bewertet, wie Regionalität und Globalität von MNU operationalisiert und gemessen wird. Ebenso wird eine detaillierte Überprüfung und Analyse der Forschung bereitgestellt, die innerhalb des Diskurses die Klassifikation von MNU berücksichtigt. Anhand von 253 Datenstichproben wird dabei verdeutlicht, dass 85.0% oder 28,575 der 33,632 Unternehmungen als heimatregionen-orientierte MNU eingestuft werden. Somit zeigt die bestehende Forschung, dass MNU — trotz der bestehenden Abhängigkeiten — überwiegend (Heimatregionen-orientiert und) regional sind. Die vorliegende Arbeit trägt auf Basis der Erhebung und Analyse von Längsschnittdaten von europäischen MNU auch zur bestehenden Debatte über

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Zusammenfassung (deutsche Version)

regionale und globale MNU bei. Die Auswertung von Umsatz- und Mitarbeiterdaten von CAC40- und DAX30-gelisteten MNU zeigt dabei, dass sich die interregionale Ausrichtung im Zeitraum von 2005 bis 2015 deutlich verstärkt. Mit abnehmender Heimatregionen-Orientierung sinkt dabei der Anteil der regionalen MNU um 32.8% von 81.3% im Jahre 2005 auf 48.4% im Jahr 2015. Die weitere Datenanalyse zeigt auch, dass die Veränderung zu einer interregionalen Orientierung graduell erfolgt, während ausgewählte Fälle verdeutlichen, dass auch sog. „große Schritte“ möglich sind. Da diese Erkenntnisse im Gegensatz zur ursprünglichen Forschung stehen, bietet die vorliegende Arbeit eine übergreifende und aktualisierte Perspektive für regional- und global-orientierte MNU. Schlüsselwörter: Globalisierung, Regionalisierung, HeimatregionenOrientierung, Europa, multinationale Unternehmen, global, regional, Frankreich, Deutschland.

Content Overview

1 An Introduction to Regional and Global Multinationals . . . . . . . . . . . 1.1 Definition of Research Field and Problem Set . . . . . . . . . . . . . . . . 1.2 Theoretical and Practical Relevance . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Research Question and Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 Structure and Course of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part I

1 4 13 17 20

An Examination of Theory

2 International Business Theory and Multinational Enterprises . . . . . 2.1 Historical Foundation and Chronological Integration . . . . . . . . . . . 2.1.1 Review with a Focus on Prominent Works and the Unit of Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.2 Discussion of the Multinational Enterprise’s Eminent Role as a Research Object . . . . . . . . . . . . . . . . . . . 2.2 Nature and Motives of International Business Activity . . . . . . . . . 2.3 Definitions and Concepts Associated with Multinational Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.1 Introduction to the Review on Definitions and Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.2 Analysis and Discussion of Definitions and Concepts . . . 2.3.2.1 Scientific Integration and Origin . . . . . . . . . . . . . . 2.3.2.2 Terminological Bias and Dichotomy . . . . . . . . . . 2.3.2.3 Conceptual- and Content-related Diversity . . . . . 2.3.3 Critical (Re-) Appraisal and Evaluation . . . . . . . . . . . . . . . . 2.4 Operationalization and Measurement Associated with Multinational Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27 28 28 31 32 35 35 40 43 47 54 63 67

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Content Overview

2.4.1 Introduction to the Review on Operationalization and Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.2 Characterization of Typologies and Classifications . . . . . . 2.4.2.1 Heuristic Typologies . . . . . . . . . . . . . . . . . . . . . . . . 2.4.2.2 Empirical Typologies . . . . . . . . . . . . . . . . . . . . . . . 2.4.2.3 Classifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.3 Analysis and Discussion of Typologies and Classifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.4 Critical (Re-) Appraisal and Evaluation . . . . . . . . . . . . . . . . 2.5 Résumé from the Review and Assessment of International Business Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Regional and Global Multinationals: A Literature Review . . . . . . . . 3.1 An Introduction to the Discourse and Literature Review . . . . . . . 3.1.1 Methodological Approach for a Systematic Review of the Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.2 Characteristics and Structure of the Literature under Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Review and Analysis of Prior Approaches and Empirical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Discussion of Theoretical and Empirical Standpoints from the Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.1 The Use of Different Regional Groupings . . . . . . . . . . . . . 3.3.2 The Use of Different Classes and Levels of Thresholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.3 The Use of Different Contexts and Actors . . . . . . . . . . . . . 3.3.4 Implications for the Use of Multinationality in Performance-linked Studies . . . . . . . . . . . . . . . . . . . . . . . . 3.3.5 Implications for the Use in Strategicor Managerial-related Research . . . . . . . . . . . . . . . . . . . . . . . 3.4 Concluding Remarks on Prior Research and Definition of Research Gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part II

68 75 76 80 86 90 94 98 101 103 106 109 115 156 156 164 169 178 179 184

Empirical Evidence from European MNEs

4 Research Design and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.1 Definition and Purpose of the Research Objects Selected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Content Overview

4.1.2 Definition and Purpose of the Descriptive-Longitudinal Assessment . . . . . . . . . . . . 4.1.3 Definition and Purpose of the Comparative Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Research Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.1 Modus Operandi for Home-Region/-Country Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.2 Modus Operandi for the Classification of Regional and Global MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Generation of Firm Samples and Data for Analysis . . . . . . . . . . . . 4.3.1 Analysis of Firm Listing and Stock Index Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1.1 Analysis of the Composition of Fortune Global 500 Lists, 2005–2015 . . . . . . . . . . . . . . . . 4.3.1.2 Comparison of Fortune Global 500 Lists with DAX30 and CAC40 . . . . . . . . . . . . . . . . . . . . 4.3.2 Data Collection and Raw Data Verification . . . . . . . . . . . . 4.3.2.1 Notes on Sales and Employee Data . . . . . . . . . . . 4.3.2.2 Notes on Asset Data . . . . . . . . . . . . . . . . . . . . . . . . 4.3.2.3 Notes on Other Key Financial Data . . . . . . . . . . . 4.3.2.4 Notes on Geographic Segment Data . . . . . . . . . . 4.3.3 Firm and Data Sample Characteristics . . . . . . . . . . . . . . . . . 4.3.3.1 Notes on Headquarters’ Locations and Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.3.2 Notes on Industry Classification . . . . . . . . . . . . . . 4.3.3.3 Notes on Firm Size . . . . . . . . . . . . . . . . . . . . . . . . . 5 Longitudinal Results from European MNEs . . . . . . . . . . . . . . . . . . . . . 5.1 Home-Region/-Country Orientation of European MNEs . . . . . . . . 5.1.1 Home-Region Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.1.1 Home-Region Orientation on the Basis of Sales Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.1.2 Home-Region Orientation on the Basis of Employee Data . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.1.3 Changes in Home-Region Presence . . . . . . . . . . . 5.1.2 Home-Country Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.2.1 Home-Country Orientation on the Basis of Sales Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Content Overview

5.1.2.2 Home-Country Orientation on the Basis of Employee Data . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.2.3 Changes in Home-Country Presence . . . . . . . . . . 5.1.3 Inter- and Intraregional Orientation (Z) . . . . . . . . . . . . . . . . 5.1.3.1 Inter- and Intraregional Orientation on the Basis of Sales Data . . . . . . . . . . . . . . . . . . . 5.1.3.2 Inter- and Intraregional Orientation on the Basis of Employee Data . . . . . . . . . . . . . . . 5.2 Classification of European MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Classification Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Alternative Threshold and Robustness Testing . . . . . . . . . . 5.2.3 Classification Switching Patterns . . . . . . . . . . . . . . . . . . . . . 6 Discussion of Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Discussion of Results and Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1.1 Home-Region/-Country Orientation and MNE Classification of European MNEs . . . . . . . . . . . . . . . . . . . . . 6.1.2 Empirical Results in Comparison with Findings from Prior Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1.3 Selected Cases from Regional and Global European MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Originality and Value and Implications . . . . . . . . . . . . . . . . . . . . . . 6.2.1 Originality and Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.2 Implications for Theory/Discourse Advancement . . . . . . . 6.2.3 Implications for Managerial Practice . . . . . . . . . . . . . . . . . . 6.3 Limitations and Critical Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.1 Content- and Concept-related Limitations . . . . . . . . . . . . . . 6.3.2 Methodological and Empirical Limitations . . . . . . . . . . . . . 6.3.3 Critical Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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7 Conclusions and Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Recommendations for Further and Future Research . . . . . . . . . . . .

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Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

363

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

365

List of Abbreviations

ABHK ABS AFRS ARS ASEAN AU BE bn BRG BRIC CA CAC cf. CH CHF CI CN cons. CSA D DAX DE DETE

Aggarwal, Berrill, Hutson and Kearney (The) Association of Business School Annual financial reporting to shareholders Annual reporting to shareholders Association of Southeast Asian Nations Australia Belgium Billion Braintrust Research Group Brazil, Russia, India and China Canada Cotation Assistée en Continu (French for: Continuous Assisted Quotation) Confer (Latin for: compare, consult) Confoederatio Helvetica (Latin for: Swiss Confederation/Switzerland) Confoederatio Helvetica Franc (Latin for: Swiss Confederation Franc) Capital investments China Consolidated Country-specific advantage Domestic Deutscher Aktienindex (German for: German Stock Index) Deutschland (German for: Germany) Domestic employees to total employees

xix

xx

DSTS DTT EBITDA EBSCO EC EDF Ed. EMEA EMJ EMN ENT ER ES et al. EU EUR F&B FATA FBTB FBTB FDI FETE FF FMC FPTP FR FS FSA FSTS FTSE FTT g G G7 GDP GI GLOBE GS H

List of Abbreviations

Domestic sales to total sales Domestic to total Earnings before interests, taxes and amortization Elton B. Stephens Company European Commission Électricité de France Editor Europe, the Middle East and Africa European Management Journal Entreprise multinationale (French for: multinational enterprise) Entropy measure External revenue España (Spanish for: Spain) Et alia (Latin for: and others) European Union Euro Food and beverage Foreign assets to total assets Foreign subsidiaries (or affiliates) to total subsidiaries (or affiliates) Foreign subsidiaries to total subsidiaries Foreign direct investment Foreign employees to total employees Firm foreignness Fresenius Medical Care Foreign profit to total profit France Financial statement Firm-specific advantage Foreign sales to total sales Financial Times Stock Exchange Foreign to total Interregional orientation Global Group of Seven Gross domestic product Globalization index Global Leadership and Organizational Behavior Effectiveness Global strategy Home-region

List of Abbreviations

HCO HQ HRATA HRBTB HRETE HRO HRSTS HRTT IAS IB ICB IFRS IM IMF INV IRATA IRETE IRSTS IRTT ISO IT JIBS JP KR LVMH m M&A M-P MBR MF mMNE MNC MNE MNU MRE N.N. NAFTA

Home-country orientation Headquarters Home-region assets to total assets Intraregional/Home-region subsidiaries/affiliates to total subsidiaries/affiliates Home-region employees to total employees Home-region orientation Home-region sales to total sales Home-region to total International Accounting Standards International business Industry Classification Benchmark International Financial Reporting Standards International management International Monetary Fund International new venture Interregional assets to total assets Interregional employees to total employees Interregional sales to total sales Interregional to total International Organization for Standardization Italy Journal of International Business Studies Japan Korea, Republic of LVMH Moët Hennessy — Louis Vuitton Million Mergers and acquisitions Multinationality-performance (The) Multinational Business Review Market foreignness Micromultinational enterprise Multinational corporation Multinational enterprise Multinationale Unternehmung (German for: multinational enterprise) Multiregional enterprise Nomen nescio (Latin for: not to know) North American Free Trade Agreement

xxi

xxii

NAICS NL NOFC NOIRC OECD OEM OS PTA r R R&D RD RIA RICA ROA ROE ROFA ROHR ROR ROS ROTA ROW RSTS RTA RU RV SIM SME SUV T TGPI TNI TR UK UN UNCTAD UNCTC US

List of Abbreviations

North American Industry Classification System Netherlands Number of countries in which a firm operates Number of home-region triad countries in which a firm operates Organisation for Economic Co-operation and Development Original equipment manufacturer Osegowitsch and Sammartino Preferential trade agreement Intraregional orientation Regional Research and development Registration document Regional integration agreement Revealed investment comparative advantage (or: investment intensity index) Return on assets Rest of Europe Return on foreign assets Rest of home region Rest of region Return on sales Return on total assets Rest of world Regional sales to total sales Regional trade agreement Russia Rugman and Verbeke Subscriber identity module Small- and medium-sized enterprises Sport utility vehicle Transregional (The) Templeton Global Performance Index Transnationality Index Turkey United Kingdom United Nations United Nations Conference on Trade and Development United Nations Centre on Transnational Corporations United States of America

List of Abbreviations

USD VHB Vol. WTO Z

xxiii

United States Dollar Verband der Hochschullehrer für Betriebswirtschaft (German for: German Academic Association for Business Research) Volume World Trade Organization Measure for inter- and intraregional orientation

List of Figures

Figure 1.1 Figure 1.2 Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.4 Figure 2.5 Figure 2.6 Figure 3.1 Figure Figure Figure Figure Figure

3.2 3.3 3.4 3.5 3.6

Figure 3.7 Figure 3.8

Research objective in the context of theoretical and practical relevance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The workings of structure and course of conduct . . . . . . . . . . Excerpts from the literature by publication format or outlet, 1950s–2010s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Excerpts from the literature by dimension, 1950s–2010s . . . High-level results from the systematization and analysis of excerpts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview and systematization of foreign entry and operating modes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Variables for analysis in the context of regional and global MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Résumé of the approach for an examination of regional and global MNEs (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions dealing with regional and global MNEs, 2001–2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HRTT datasets available from the literature, 1991–2016 . . . . Results from the review of home-region orientation (1) . . . . Results from the review of home-region orientation (2) . . . . Results from the review of home-country orientation . . . . . . Results from the review of regional and global MNEs (sales data) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The regional strategy matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . Résumé of the approach for an examination of regional and global MNEs (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14 21 38 42 60 69 96 99 113 117 118 118 120 123 183 189

xxv

xxvi

Figure 5.1 Figure 5.2 Figure 5.3 Figure 5.4 Figure 5.5 Figure 5.6 Figure 5.7 Figure 5.8 Figure 6.1 Figure 6.2 Figure 6.3 Figure 6.4 Figure 6.5 Figure 6.6 Figure 6.7 Figure 6.8 Figure 6.9

List of Figures

Multiregionality of European MNEs, 2005–2015 (HRSTS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Multiregionality of European MNEs, 2005–2015 (HRETE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in the home-region presence of European MNEs, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in the home-country presence of European MNEs, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results from the classification of European MNEs, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results on MNE classification from the use of alternative thresholds (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results on MNE classification from the use of alternative thresholds (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results from classification switching, yearly changes and 2005/2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extract on intra- and interregional orientation (sales), 2005 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distribution of IRSTS and total sales (scaled), 2005 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distribution of IRETE and total employees (scaled), 2005 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yearly changes in the distribution of sales and employee data, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Up- and downsizing in realized FSA reach by class, 2005 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intra-/interregional orientation and MNE size by industry, 2005 and 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . HRSTS from European MNEs (2005–2015) compared to prior research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Classification of European MNEs (2005–2015) compared to prior research . . . . . . . . . . . . . . . . . . . . . . . . . . . . Implications by European MNEs for the workings of interregionalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

247 252 258 267 280 287 288 291 298 299 299 307 311 313 316 321 343

List of Tables

Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Table Table Table Table Table Table

2.7 2.8 2.9 2.10 2.11 2.12

Table 2.13 Table 2.14 Table 3.1 Table 3.2

Overview of the literature conceptualizing definitions and characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Standardized structure of criteria and characteristics as applied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Detailed results from the systematization and analysis of excerpts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of heuristic and empirical typologies and classifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The heuristic typology by Heenan and Perlmutter (1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The heuristic typology by Cheng and Ramaswamy (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The empirical typology by Bartlett and Ghoshal (1989) . . . . The empirical typology by Malnight (1995) . . . . . . . . . . . . . . The empirical typology by Dimitratos et al. (2003) . . . . . . . . The empirical typology by Park and Bae (2004) . . . . . . . . . . The classification by Bruck and Lees (1966, 1968) . . . . . . . . The classification by Rugman and Verbeke (2004a) and Rugman (2005c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The classification by Aggarwal et al. (2011) . . . . . . . . . . . . . Summary of heuristic and empirical typologies and classifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Publication outlets or formats on regional and global MNEs by rank (excerpt) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authors on regional and global MNEs by rank (excerpt) . . .

57 58 62 76 77 80 82 83 84 85 86 88 89 92 110 111

xxvii

xxviii

Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 3.7 Table 3.8 Table 3.9 Table 3.10 Table 3.11 Table 3.12 Table 3.13 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 4.8 Table 4.9

List of Tables

Results from the review of classification on regional and global MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results from the review of regional and global MNEs (sales data) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chronological overview for the research on regional and global MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rugman’s (2000b) perspective on intraregional export data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regional groupings from the literature by different perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regional groupings applied for regional and global MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of the empiricism associated with the ABHK classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of results from varying thresholds for the RV classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Home-region orientation from a country-comparative perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results on regional and global MNEs (single- and double-year data) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results on regional and global MNEs (multi-year data) . . . . The three-region system as applied: Americas, Asia and Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Base case for classifying regional and global MNEs . . . . . . . Alternative sensitivities for testing threshold adaptations and robustness . . . . . . . . . . . . . . . . . . . . . . . . . . . . Firms listed in Fortune Global 500 by (three) regions, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Firms listed in Fortune Global 500 by top 6 countries, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in the regional stake of firms listed from DE, FR and the UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Comparison of firms listed in Fortune Global 500 and CAC40, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Comparison of firms listed in Fortune Global 500 and DAX30, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results on the availability of key financial geographic segment data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121 122 125 147 158 163 166 168 170 173 176 204 205 206 209 211 214 218 220 225

List of Tables

Table 4.10 Table 4.11 Table 4.12 Table Table Table Table

4.13 4.14 4.15 4.16

Table 4.17 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5 Table 5.6 Table 5.7 Table 5.8 Table 5.9 Table 5.10 Table 5.11 Table 5.12 Table 5.13 Table 5.14 Table 5.15

xxix

Measure availability from the firms’ asset reporting (random sample) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sample characteristics from firms listed in DE-DAX30, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sample characteristics from firms listed in FR-CAC40, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Firm samples by industry classification . . . . . . . . . . . . . . . . . Industry classification based on sales, 2005–2015 . . . . . . . . . Industry classification based on employees, 2005–2015 . . . . Firm size sampled based on sales and employees, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Growth rates for sales, employees and GDP, 2005–2015 . . . Multiregionality of European MNEs, 2005–2015 (HRSTS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HRO of European MNEs by industry, 2005–2015 (HRSTS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Multiregionality of European MNEs, 2005–2015 (HRETE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HRO of European MNEs by industry, 2005–2015 (HRETE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in the home-region presence of European MNEs, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HCO of European MNEs, 2005–2015 (DSTS) . . . . . . . . . . . HCO of European MNEs by industry, 2005–2015 (DSTS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HCO of European MNEs, 2005–2015 (DETE) . . . . . . . . . . . HCO of European MNEs by industry, 2005–2015 (DETE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in the home-country presence of European MNEs, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inter- and intraregional orientation (sales, weighted) . . . . . . . Inter- and intraregional orientation (sales, non-weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inter- and intraregional orientation by industry (sales, weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inter- and intraregional orientation (employees, weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inter- and intraregional orientation (employees, non-weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229 231 233 237 238 239 241 242 246 248 251 254 257 259 260 263 264 266 268 269 270 273 274

xxx

Table 5.16 Table 5.17 Table 5.18 Table 5.19 Table 5.20 Table 5.21 Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 6.5 Table 7.1

List of Tables

Inter- and intraregional orientation by industry (employee data, weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Classification of European MNEs, 2005–2015 . . . . . . . . . . . . HRSTS of European MNEs by classification, 2005– 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stake of home region-oriented MNEs by industry, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results from alternative threshold testing, 2005–2015 . . . . . Results from classification switching, yearly changes and 2005/2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inter-/multiregionality, home-region presence of European MNEs, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . Three-region perspective on yearly and cumulative changes in firm-level data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MNE percentages for their stakes in different HRSTS ranges, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemplary data on intra- and interregional presence from prior research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Examples from longitudinal changes in sales and employee data, 2005–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Résumé (incl. working steps and conclusions) for regional and global MNEs . . . . . . . . . . . . . . . . . . . . . . . . . . . .

275 278 282 283 285 289 297 302 310 319 325 357

1

An Introduction to Regional and Global Multinationals

“[…] Economic globalization is a myth.” Alan M. Rugman (2000b, p. 163).

In June 1996, the political leaders engaging in the Group of Seven (G7) Lyon Summit title their Economic Communiqué “Making a Success of Globalization for the Benefit of All”. The heading of this official document demonstrates the extremely positive narrative of the terminology applied and is followed by a discussion of benefits and challenges of globalization. An increase in globalism is thereby often associated with the opportunity for economic growth and, thus, the generation of wealth for individuals and groups, whereas reduced barriers for trade and investment engender conflicts over domestic norms within and between nations and cause difficulties for governments in providing social security. Consequently, globalizing markets are also possible sources of tension which threaten social stability (G7, 1996; Rodrik, 1997, pp. 30–33).1 Shortly after the summit, in 1997, economic growth in Asia collapses raising fears of a global economic meltdown due to financial contagion. In March 2000, news of the Japanese (JP) economy entering yet another downturn triggers an abrupt global stock sell-off that primarily affects technology firms2 and is, ultimately, followed by a recession in the European Union (EU) and the United States of America (US) thereafter (Kaiser et al., 2000, pp. 3–5; Peek and Rosengren, 1A

definition of the terminology in use, such as globalization or globalism, is provided in Subchapter 1.1. 2 Lexically, a firm is defined as “the name or title under which a company transacts business” (cf. Merriam-Webster, 2016). A delineation of the different kinds of international business activity therewith associated is conducted in Chapter 2. © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 C. Czychon, Regional and Global Multinationals, mir-Edition, https://doi.org/10.1007/978-3-658-33737-7_1

1

2

1

An Introduction to Regional and Global Multinationals

2000, p. 44; CNNMoney, 2000).3 Similarly, the outbreak of a worldwide pandemic in 2020 with epicenters in one region after another leads governments to enforce stay-at-home orders that quickly result in widespread economic lay-offs and stock sell-offs not seen since the 1930s (UNCTAD, 2020). While these events serve as examples for the connection of (financial) globalization and (financial) crisis4 , they underpin that (economic) globalization, in its many different forms, eventually causes conflict and, among others5 , can be associated with a global rise in support of populist parties (Rugman and Verbeke, 2003d, pp. 88–91; Ghemawat, 2017, p. 118; Kobrin, 2017, p. 162; The Economist, 2017; Rodrik, 2018, pp. 12–13; Devinney and Hartwell, 2020, pp. 33–34; Verbeke, 2020, p. 444). An advanced understanding of the connection between the globalization of markets and economic development6 is promoted in international business (IB) and management (IM) research, with multinational enterprises7 (MNEs) — in their various roles and due to the ability to accelerate international production, increase the mobility of capital and transfer knowledge or technology across national or regional borders — acting as drivers, enablers and promoters of these (change) processes (Strange, 1997, p. 137; Hood and Young, 2000, p. 4; UNCTAD, 2017, p. 159; Verbeke et al., 2018, pp. 1101–1104; Witt, 2019, pp. 1066–1068). On the strength of these activities, which include the implementation, execution and adaption of international trade (such as import and export), non-equity foreign operation (such as licensing, franchising and contractual alliances) and foreign direct investment (FDI) strategies or their combination (Agarwal and Ramaswami, 1992; Petersen and Welch, 2002), MNEs serve as infrastructure for the worldwide economy and likewise as performance indicators during times of a global pandemic (UNCTAD, 2017, p. 159, 2020, pp. 3–10; Verbeke, 2020, pp. 444–446). 3 Two-letter country codes presented throughout this work are applied as provided by the ISO 3166–1 Alpha-2 code standard. 4 See Stiglitz (2002, pp. 89–132) and World Bank (2013, p. 206) for detailed remarks on the connection of such, also in connection with the more recent, 2007/2008 financial crisis. 5 See Subchapter 1.1 for a discussion of the different perspectives on globalization. In addition, see Huwart and Verdier (2014) for a detailed approach published origins and consequences of economic globalization. 6 See Hood and Young (2000, pp. 4–8), who provide an overview and discuss the connection between corporate imperatives and economic development imperatives in a globalizing world economy. 7 See Subchapter 2.3 for an analysis of the definitions that are associated with the term multinational enterprise.

1

An Introduction to Regional and Global Multinationals

3

These processes and activities are moreover dominated by MNEs headquartered in the European Union, Japan or the United States of America, so called triad power corporations (Ohmae, 1985, pp. 205–207), which account for over fifty percent of world trade and approximately eighty percent of the world’s stock of FDI in the early 2000s (van den Bulcke, 1995, p. 43; Rugman, 2000b, pp. 114–115; 139–140, 2000a, p. 204; Rugman and Doh, 2008, p. 27).8 Simultaneously, the classification and assessment of multiregionality in MNE business activity across the triad show that Fortune Global 500 firms are primarily concentrated in that region of the triad which is also host to the headquarters’ (HQ) location. Thus, the world’s largest MNEs are identified as largely home region-oriented, and therefore regional, but not global organizational entities (Rugman and Verbeke, 2004a; Rugman, 2005c; Rosa et al., 2020). One may assume that the various studies across different sets of data verifying the dominance of home-region orientation (HRO) put an end to globalism’s advocates’ efforts in international business and management research.9 Nonetheless, it is likewise argued that the globalization process is far from complete while a deepening of economic interdependence between institutions and countries remains underway (Dunning, 2000, p. 21; Ghemawat, 2003, p. 139; Berrill, 2015, pp. 99–100). In the means of the possibility for consensus, globalization is thus seen as at least twofold with benefits and challenges being more critically compared to a double-edged sword, while the evaluations of actors’ advancements include local, (home-) regional and/or (semi-) global as well as integrated perspectives (Williamson, 1981, pp. 560–562; Ghemawat, 2003, p. 139; Asmussen, 2007, pp. 4–26, 2009, p. 1201; Witt, 2019, p. 1071; Cuervo-Cazurra et al., 2020, pp. 28–29; Devinney and Hartwell, 2020). In empiricism and debate, the process of globalization is however neither separated from the measurement and comparison of such, namely globality, nor is the latter defined in its function to represent globalization’s final stage. Thereby, it remains to be seen skeptical if such as a state of a global equilibrium would be in the interest of markets and their participants, that act and decide based on demand, supply and, lastly, profit. But does it yet allow to consider economic globalization a myth (for example: Rugman, 2000b, p. 163; p. 1)? As the recent resurgence of the discussion on the consequences of globalization provides new momentum to both skeptics and supporters alike 8 See

Chapters 6–8 in Rugman (2000b), for all details and data. Chapter 3 for a literature review of the research and literature that explicitly deals with regional and global MNEs.

9 See

4

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An Introduction to Regional and Global Multinationals

(Cuervo-Cazurra et al., 2017, p. 155; Aguilera et al., 2019, p. 61; Ghemawat and Altman, 2019; Witt, 2019; Rosa et al., 2020; UNCTAD, 2020), this work shall shed new light on the biases that exist with regard to market interdependencies and the corresponding MNE business activities as a reflection of such. Under the consideration and with respect to achievements of the past, this work is therefore directly related to the definition, measurement, analysis and classification of MNEs and their business activities.10 The use of longitudinal data originating from European MNEs thereby creates an empirical standpoint of MNE activities and provides ground for result interpretation and development integration.11 In the context of international management and international business research, the present work shall therefore provide innovative insight as well as an updated perspective on regional and global MNEs.12

1.1

Definition of Research Field and Problem Set

During the past decades, academic scholars associated with international economic, business and management research13 and the respected communities therewith related have devoted a substantial effort to develop a theoretical and conceptual understanding when trying to determine and explain the degree (for example: internationality) and development (for example: internationalization) of international firm activity (Coase, 1937; Hymer, 1960; Johanson and Vahlne, 1977; Dunning, 1988a; Sullivan, 1994a).14

10 See

Part I for an examination of theory. Part II for empirical evidence from European MNEs. 12 See McLuhan and Quentin (1968, p. 11), who state that “today, electronics and automation make mandatory that everybody adjust to the vast global environment as if it were his little home town” (cf. McLuhan and Quentin, 1968, p. 11), and Ger (1999, p. 68), who points out the symbolism of local versus global products, for a possible dichotomic thinking that is referred to in the context of this literature. 13 For the purposes of separation, international economics is the research field that assesses the implications of international markets, such as by trade (micro-) and finance or investment (macroeconomic), to help understand the workings of the international economy (Thompson, 2005), whilst international business is the study of transactions taking place across national borders to satisfy the needs of individuals and organizations (Rugman and Hodgetts, 2003, p. 4). In accordance with the latter, international management research deals with the organization of business operations that are conducted in more than one country (Perlitz, 2004, pp. 8–20). 14 The terminology mentioned is defined and discussed throughout the following. 11 See

1.1 Definition of Research Field and Problem Set

5

Starting in the late 1950s, first academics begin to provide contributions with insight on (domestic) firms that grow across national borders and, thus, into internationality (Byé, 1957, pp. 273–274, 1958, pp. 148–165; Clee and di Scipio, 1959, pp. 85–89; Hymer, 1960, pp. 27–30; Lilienthal, 1960, p. 119). While this broad starting point could easily be associated with firm development or singled out to the study on firm growth (Penrose, 1956, 1959), the international firm and its internationality swiftly experience an increasingly substantial role as a research object (Seno-Alday, 2010, pp. 17–19; Engwall et al., 2018, pp. 1084–1087). This is soon reflected with the establishment of a distinct discipline and field of expertise, namely the international business and management research society (Fayerweather, 1974, pp. 72–73), and moreover testified and justified based on the increasing attention received in nearby disciplines, for example in the social sciences (Thompson, 1967; Penrose, 2002, pp. 7–13). In comparison to the study previously conducted on the nature and growth of the firm (Coase, 1937; Penrose, 1955, pp. 7–13), the operation and organizational structure of an international firm’s business activity is thereby often associated with an increasing level of complexity for the management of such (Hymer, 1960, pp. 214–215; Hochmuth, 1978, p. 175). Consequently, it is plausible to transfer this thinking when separating the international firm from the multinational or multiregional enterprise (MRE) with each representing a more particular and complex object of research respectively. But despite recognizing the academic efforts on degree and development (Michel and Shaked, 1986, p. 99; Lee and Kwok, 1988, pp. 214–215; Egelhoff, 1991, p. 341; Dunning, 1993, pp. 501–504; Aggarwal et al., 2011, p. 561), a central question remains thus far unanswered: “Are […] firms regional or global?” (cf. Berrill, 2015, p. 87).15 The previous paragraphs, firstly, reveal that the debate on firms’ foreign business activities represents one of the oldest and at the same time a modern discourse in the research field which has not yet come to an end. Secondly, the international firm as an object of investigation is separated into different research streams or objects of knowledge within such, namely the degree of firm internationality and firm internationalization16 , with each being observed and interpreted empirically for the purposes of characterization due the generation of distinct insights on the subject’s matter. Thereby, internationality is defined using 15 See Oh et al. (2019, pp. 561–571) as well as Jeong and Siegel (2020) for recent contributions challenging this research. 16 See Rugman and Hodgetts (2003, p. 607) and Rugman et al. (2006, p. 636), who define internationalization as “the process by which a company enters a foreign market” (cf. Rugman and Hodgetts, 2003, p. 607; Rugman et al., 2006, p. 636).

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a set of specific characteristics, whereas internationalization is associated with different kinds of development.17 While this knowledge is essential for managers to develop and implement successful strategies, the application and adaption of such for more particular kinds of international firms, such as regional and global MNEs, remains questionable. Thus, the wide-ranging facets connected with the origin of the adjectives describing these kinds of multinational enterprises shall be briefly reviewed hereinafter. The term global is lexically defined as involving the entire world, which can imply the worldwide availability of an object, whereas its meaning is manifold in the context of international economic, business and management research (Clark and Knowles, 2003, pp. 367–369).18 In terms of the global economy19 , global markets serve as enablers for the processing of goods, services, technologies and capital in between local, national or regional boundaries (Levitt, 1983, p. 93; Aharoni, 1993, p. 25). In this respect, the global firm (Hout et al., 1982; Davidson and de la Torre, 1989; Berggren, 1996), or world corporation (Clee and di Scipio, 1959, pp. 85–89; Sieber, 1966, p. 55), is often associated with the implementation of a globalization strategy (Engelhard and Hein, 2001, pp. 35–43) or global strategy and global players respectively (Hamel and Prahalad, 1985; Leontiades, 1986; Ghoshal, 1987; Yip, 1989; Roth and Morrison, 1992b; Moon, 1994; Chng and Pangarkar, 2000; Schlie and Yip, 2000).20 Additionally, the term global can be identified alongside many objects in the business and management context, such as global purchasing (Arnold, 1989; Mair, 1995), global research and development (Gerybadze, 1997; Pearce, 1999), global production or operations management (de Toni et al., 1992; Prater and Ghosh, 2006; Hockley, 2010), global products, brands or accounts (Meffert, 1986; Yip and Madsen, 1996; Yip, 1997; Arnold et al., 2001; Kotabe and Helsen, 2010; de Mooij, 2013), global (virtual) managers and/or human 17 See Moore and Lewis (1999, pp. 27, 33, 60 ff., 79), Wilkins (2001, pp. 17–24, 2005, pp. 46–65), Dülfer (2003, pp. 3–5) and Macharzina (2003, p. 25) for an advanced historical perspective of international, transnational and multinational business activity and Macharzina (1982, pp. 114–121) for an overview of the explanatory approaches therewith connected. 18 See Scholte (2005, pp. 50–54), who discusses the origin of the term, and Clark and Knowles (2003), who identify the shortcomings in the handling of the terminology in the context of international business and management research. 19 See Hirst and Thompson (1996, pp. 10–13), who discuss the ideal on this terminology in detail. 20 See Fayerweather (1981, pp. 29–31) and Engelhard and Hein (2001, pp. 35–43), who argue that a globalization strategy implemented by international firms is characterized by fragmenting or unifying capabilities, such as standardization versus diversity and adaptation in products and services (esp. Fayerweather, 1981, p. 29; Engelhard and Hein, 2001, p. 38–40).

1.1 Definition of Research Field and Problem Set

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resource management (Bartlett and Ghoshal, 1992; Marquardt and Engel, 1993; Kedia and Mukherji, 1999; Kayworth and Leidner, 2000), global finance (Business International, 1988; Bowe, 2009), global organization, structures or system (Schollhammer, 1971, pp. 348–353; Perridon and Rössler, 1980b, pp. 259–260; Schotter et al., 2017) as well as a global corporate mindset (Murtha et al., 1998; Govindarajan and Gupta, 2000, p. 277; Gupta and Govindarajan, 2002, pp. 116–120). The popularity of the term global in this literature thereby not only highlights but emphasizes the importance of being global, whereby its application often searches to describe the possession of a specific expertise and is not at all directed at the degree of internationality associated with the business activity of an international firm. While a further specification of being global is not provided within many of the examples referred to in the above, scholars in international business research note a perceived increase of similarities across countries that is rather loosely tagged and connected to the process of globalization (Collinson et al., 2016, p. 6). Though this procedure is inaccurate, it is still moderately accepted for reasons of attraction21 (Ghoshal, 1987, p. 425; Clark et al., 2004, p. 511), but broadened by the tendency to mistake global strategy, internationalization or the business activity of international firms for globalization within the argumentation presented.22 Consequently, this exemplifies the need to define globalization, which does not necessarily refer to enterprises directly (Fisch and Oesterle, 2003, p. 4), when separating the term from others as follows and, moreover, stressing the fact that international or regional do not equal global business activity (Engelhard and Dähn, 1994, p. 262; Scholte, 2002, pp. 8–10). 21 See Ghoshal (1987), who recognizes that to “‘manage globally’ appears to be the latest battle cry in the world of international business” (cf. Ghoshal, 1987, p. 425). In addition, see Engelhard and Dähn (1994, p. 262) and Engelhard and Hein (2001, pp. 28–33) for the avoidance of doubt and a review on the connection between globalization, globalization strategy, global strategy and global firm. This issue is also noted by sociologists, such as Beck (1997a, p. 6). For a definition of economic activity, see the notes, or more specifically the third note, in Dunning (1993, pp. 11–12). 22 See Lovelock and Yip (1996, p. 65), who address the issue to which the terms global and globalization are mistakenly used as synonyms or interchangeably when pointing out that “operating globally does not mean that a company possesses a global strategy” (cf. Lovelock and Yip, 1996, p. 65). Yeung (2002) and Ricks (2003) exemplify the vagueness surrounding the discussion and controversy at hand (esp. Ricks, 2003, p. 356), while Rugman (1993, p. 86), Rugman and Hodgetts (2003, p. 606) and Rugman et al. (2006, p. 635) provide a false definition and application of globalization when defining such as “the production and distribution of products and services of a homogeneous type and quality on a worldwide basis” (cf. Rugman et al., 2006, p. 635). That view is not corrected until Collinson et al. (2016, pp. 6–8) do so a decade later.

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The United Nations (UN), the European Commission (EC), the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) state in the glossary of a jointly prepared document that “the term globalization is generally used to describe an increasing internationalization of markets for goods and services, the means of production, financial systems, competition, corporations, technology and industries. Amongst other things this gives rise to increased mobility of capital, faster propagation of technological innovations and an increasing interdependency and uniformity of national markets” (cf. United Nations et al., 2002, p. 170).23 The definition presented by United Nations et al. (2002, p. 170) thereby coincides with many characteristics that are provided to reflect an economic perspective on globalization in international business (Dunning, 1993, p. 132; Rodrik, 1997, p. 29; Hood and Young, 2000, p. 4), while scholars in this field preferably highlight their standpoint throughout the use of statistical evidence, such as the engagement of MNEs throughout sales revenue or FDI (Vernon, 1971; Dunning, 1993; Hirst and Thompson, 1996, pp. 77–80; Rugman, 2000b, p. 4, 2003b, pp. 410–412).24 At the same time, authors representing a managerial perspective in international business provide interdisciplinary aspects by arguing that a pure economic approach is narrow and reflects a simplification in contrast to possible further characteristics originating in the social sciences, such as constraints from culture, government regulation or language (among others: Lovelock and Yip, 1996, p. 82; Schlie and Yip, 2000, pp. 344–346; Amine, 2003, pp. 390–392; Bird and Stevens, 2003, pp. 403–406; Clark and Knowles, 2003, pp. 362–367; Husted, 2003, pp. 428–432). Based on the interconnection and further exchange with definitions from sociologists and economic geographers (Giddens, 1990, p. 64; Dicken, 1998, p. 5), a wider understanding of globalization takes into account cultural, economic, political and technological factors as a result from the elimination of communication and trade barriers and can, consequently, represent more than financial order

23 From this perspective, globalization is an especially intense form of internationalization and, thus, a subset, but not equal to the latter (Hirst and Thompson, 1996, p. 7; Scholte, 2002, p. 8–10, 2005, p. 55). In broader terms and as applied by Witt (2019, p. 1054), globalization in IB research specifically can be defined as “the process of increasing interdependence […]”. 24 See Rugman (2000b), who defines globalization as “the activities of multinational enterprises engaged in foreign direct investment and the development of business networks to create value across national borders” (cf. Rugman, 2000b, p. 4). Also, see Sobel (2003) for a comment on this perspective.

1.1 Definition of Research Field and Problem Set

9

(Albrow, 1996, pp. 87–90; Beck, 1997a, p. 6, 1997b, pp. 199–201; Tomlinson, 1999, pp. 13–17; Beck, 2000, pp. 119–121; Giddens, 2000, pp. 28–37). While it thus is reasonable to argue that globalization is a complex/multi-faced construct that cannot be treated unidimensional (Clark et al., 2004, p. 514; Witt, 2019, pp. 1061–1065), the different understandings in separate research communities still exist, especially to make an issue without unilateral understanding easier to handle for the purposes of examination of one of its drivers, the multinational enterprise (Moore and Lewis, 1999; Rugman, 2000b, p. 5; Eden and Lenway, 2001, p. 383). The complexity of this phenomenon is particularly exemplified when assessing globalization and deglobalization, which usually result in an in- or decrease of globalism (Albrow, 1996, pp. 82–85; Beck, 1997a, p. 5; Keohane and Nye, 2000, p. 105).25 Globalism is thus an outcome of interdependences with reciprocal effects among countries/actors in different regions, and a state or condition that is defined by world involving networks of interdependence at multicontinental distances (Giddens, 1990, p. 64; Beck, 1997a, p. 5; Keohane and Nye, 2000, pp. 104–105; Guillén, 2001, pp. 236–240). Whereby globalism historically relates to neoliberalism and, hence, the specific kind of an ideology of freedom and free trade (Beck, 2000, p. 9), globality refers to the condition of being global and, therefore, a hypothetical end-state or specific degree of globalization (Beck, 1997a, p. 8; Yergin and Stanislaw, 1998, p. 14).26 Regarding the examination of this condition, global strategy is defined as an extreme version of homogeneity in products or services (among others: Rugman and Hodgetts, 2001, p. 341), which is particularly to be associated with the strategic alignment of a MNE (Ghoshal, 1987, p. 428).27 Consequently, a global MNE can be defined as the hypothetical end-state or -condition of firm foreignness, whereas this is replicated by comparing the value or quality of a specific characteristic or a set of specific characteristics and the dispersion on a global level. In theory, there thus exist many kinds of global MNEs. The term region as a geographical space is discussed within many contributions and thereby not limited to the set of research streams mentioned in 25 In contrast to Aguilera et al. (2019, p. 69), the literature hereby cited and referred to exemplifies that deglobalization is studied prior to a period when the use of the term becomes increasingly attractive to a broader range of scientific scholars. 26 See Beck (2000, pp. 9–12) and Safire (2003, pp. 128–129) for a deepening discussion of the terminology that is used here. 27 Also, see Peng and Pleggenkuhle-Miles (2009), who argue that global strategy can be regarded as a synonym for global strategic management when providing an institutional-based perspective on this terminology.

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the above.28 Thereby, regions are primarily limited due to the existence of national frontiers. From a perspective of regional and global MNEs, a setup of regions can thus be defined as exemplified by the triad, which takes the frontiers of important world economies into account when separating the world market into the European Union/Europe, Japan/Asia–Pacific and the United States of America/North America respectively (Ohmae, 1985, p. 5; Rugman and Verbeke, 2004a, p. 3; Rugman, 2005c, p. 1). In international business research, the differences of separate regions are further classified into administrative, cultural, economic, geographic and institutional/political dimensions (Ghemawat, 2001, pp. 141–147; Ricart et al., 2004, p. 181; Ghemawat, 2007, pp. 40–45). While this is necessary to understand and explain the interregional distance or liability of foreignness in between or across such (Zaheer, 1995; Amann et al., 2014), regions are therefore not automatically limited to national borders and, more broadly speaking, can also refer to multi-country areas, sometimes covering up all or most of a continent. Thus, regions can take single countries as well as groups of (small or contiguous) countries that can be managed as one into account (Yip, 2003, p. 8). This process similarly applies with regard to the MNE home region in the triad as well as its expansion, the broad triad (Rugman, 2000b, p. 114). Regarding this setup, regionalization represents a possible compromise in globalizing markets where MNEs as non-state actors are encouraged to extend beyond local markets while developing intraregional trade and investment operations. Therefore, regionalization is an integration process that facilitates territorial blocs based on the deepening of cross-border economic integration (Morrison et al., 1991, p. 25; Whalley, 1998, p. 64; WTO, 2003, pp. 26–29; Cuervo-Cazurra and Un, 2007, p. 227; Rugman and Collinson, 2012, p. 7).29 The advantageousness pursued through cooperation up to a subset of nations establishing preferential (PTAs) or regional trade agreements (RTAs) is broadly defined as regionalism and passionately debated by economists and policymakers alike (Bhagwati, 1993, p. 22; Wyatt-Walter, 1995, p. 78; Lawrence, 1996, p. 2; Krugman, 1999, pp. 396–399; Hettne, 2002, pp. 11–12; 28 See

Hettne (2002, pp. 9–10), who discusses region as a geographical unit as one of “five degrees of regionness”, and Mansfield and Milner (1999, p. 590), who provide a rather broad view when defining a region as a cluster of several countries which are located in a geographically specified area. Also, see Ghemawat (2005, p. 107), who reflects on the definition of regions in the wider context of a regional and global perspective. 29 See Bhagwati (1991, pp. 58–79), who introduces the terminology on building and stumbling trade blocs, and Pangariya (2000, pp. 317–325), who reviews the relevant literature on this topic.

1.1 Definition of Research Field and Problem Set

11

Spindler, 2002, p. 6).30 While it is argued that regionalism in its outcome is a combination of historical and emergent structures rather than state projects (Gamble and Payne, 1996, p. 250; Väyrynen, 2003, p. 26), governmental actions, such as the re-opening of national markets in the 1950s and 1960s or the creation of PTAs and RTAs thereinafter, intend to strengthen (member) countries in the lowering of intraregional barriers to economic activity (Alagappa, 1995, p. 362; Lévy, 1995, p. 354; Fernández Jilberto and Mommen, 1998, pp. 7–9; Lahiri, 1998, p. 1126).31 PTAs and RTAs thus specifically affect liberalization through diversion of trade and investment (Lawrence, 1996, p. 2), which creates the need for managers in MNEs to develop flexibility in the alignment of strategy and an increase in carefulness relating to the analytical study of business activity (Morrison et al., 1991, p. 29; Fratianni and Oh, 2009, pp. 1208–1209; Rugman and Collinson, 2012, p. 7).32 In the setup of regionalization and regionalism, regionality therefore refers to the state or condition of being regional and, consequently, a hypothetical end-state or specific degree of regionalization in the respect of PTAs or RTAs.33

30 Researchers

in academia often draw analogies to separate eras of regionalism. See Fawcett and Hurrell (1995) and Ethier (1998a, p. 1215, 1998b, pp. 1149–1150) for the era of old regionalism, which has its origins in the 1950s and is predominantly remarked by the cold war and the bipolar system of the so-called superpowers, and new regionalism, which has its roots in the late 1980s and reflects countries’ attitudes towards a more economic and reform openness. Additionally, see Whalley (1993, 354–369, 1998, pp. 70–74), Ethier (1998b, pp. 1150–1152), Krugman (1999, pp. 396–399), Paas (2003, p. 3) and Wolf et al. (2012, p. 73) for a reading on regionalism from an economic perspective. 31 See WTO (2018), who separates the terms as follows: RTAs include free trade areas and customs unions, whereas PTAs also comprise common markets. In the latter case, regional integration agreements (RIAs) can be used or serve as a synonym for PTAs (Mansfield and Milner, 1999, p. 595). 32 See Lévy (1995, p. 354), who states that “regionalization can be understood as the accelerated movement by two or more countries toward the integration of their economies, and ultimately, the pooling of their sovereignty […] in the hope of collectively strengthening their positions in the world economic and political arenas” (cf. Lévy, 1995, p. 354). For details, see Mirza (1998, pp. 6–8), who discusses the relationship between globalization and regionalization, and Lahiri (1998, p. 1127), who provides examples on (inverse) regionalism and multilateralism. Also, see Hurrell (1995, p. 334), Roloff (1999, pp. 76–80) and Spindler (2002, p. 6), who discuss the relationship of regionalism and regionalization and note that regionalism reflects a formal process whereas regionalization is a merely autonomous, spontaneous and informal construct. 33 See Kandogan and Hiller (2018, pp. 738–739), who discuss the formation of RTAs in the light of MNE strategy.

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Regarding the examination of this condition, scholars in international business research often refer to contingency theorists, such as Blau (1955), Woodward (1965), Lawrence and Lorsch (1967) or Pugh and Hickson (1976), while arguing that the consideration of regional aspects and the flexibility in the strategic alignment of a firm are key when it comes to managing the existing resources and capabilities within a MNE in respect of its foreign markets (Morrison et al., 1991, pp. 28–29; Heinecke, 2011, pp. 50–52; Grosche, 2012, p. 61). To guarantee the success of MNE business activity (Morrison et al., 1991, pp. 28–29), it now appears that managers acting on behalf of these firms design and implement regional strategies, for example throughout a regional degree of management autonomy or the adaption of products and service (Heinecke, 2011, pp. 43–50; Gilbert and Heinecke, 2014, pp. 619–624). In these cases, the situational and environmental contexts are taken into account resulting in global imperatives being eclipsed by an upsurge of regional pressures (Doz and Prahalad, 1991, 151–154; Buckley et al., 2001, pp. 253–255). In subsequence, this explains why MNEs must search for new sources of competitive advantage (Porter, 1990, pp. 69–177; Rugman and D’Cruz, 1993, pp. 29–35), which, among others, can stem from factor advantages (Hymer, 1960; Kindleberger, 1969; Caves, 1971), technological change (Posner, 1961), internalization (Buckley and Casson, 1976, 1998a), firm- (FSA) or country-specific advantages (CSA) (Rugman, 1981, 2006), cross-subsidization (Hamel and Prahalad, 1985), flexibilization (Kogut, 1985b, 1985a), risk reduction (Shaked, 1986), market opportunities (Bühner, 1987), organizational learning (Ghoshal, 1987), economies of scale and scope (Chandler and Hikino, 1990) or the creation of market entry barriers and the leaving behind of intense competition in home markets (Elango, 2000), and result in multilevel foreign entry and operation modes (Brouthers and Hennart, 2007, p. 419). By this means, a regional MNE is in fact an emphasis to the question on the measurement of firm-level multinationality/-regionality, which, as a key dimension, spans across the different domains of investigation in international business research as well as the theoretical frameworks and level of empirical analysis therewith associated (Aggarwal et al., 2011, p. 557). Consequently, a regional MNE can be defined as the hypothetical state or condition of firm foreignness, whereas this is replicated by comparing the value or quality of a specific characteristic or a set of specific characteristics and the dispersion on (respected) regional levels. As for the global MNE, in theory, there thus exist many kinds of regional MNEs, whereas PTAs or RTAs can serve as a conditional for the regional levels in pursuit of analysis.

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13

Altogether, it is inevitable to recognize that the contents outlined throughout the previous paragraphs provoke the need for further clarification regarding regional and global MNEs. While engaging with previous research, the present work represents a new viewpoint when aiming to create a perspective of possible co-existence. Therefore, rigid standpoints are opened and limited from a different angle at the same time as described hereinafter. To examine the degree of firm foreignness and their business activity, the present work is, firstly, dedicated to the generation of a justification for the existence of the underlying research stream which deals with regional and global but not regional versus global MNEs. Secondly, further understanding for the different kinds of firm foreignness is provided based on the analysis of the characteristics associated with definition and measurement. When considering an economic understanding of globalization, it is thereby only plausible to also analyze empirical data to differentiate for kind or scale as well as to answer questions related to the possibility of a myth. Thirdly, this work deals with the broad area of firm development, particularly the growth of firms into internationality, multinationality, multiregionality or globality. Despite the consideration of a longitudinal component in the empirical part, the approach is not to mistake for the development of configuration or coordination debated in the international business research community. Though the empiricism on the degree of business activity thereby reflects the possibility for firm alignment, the research presented on regional and global MNEs is not per se research in the field of firm strategy or organizational behavior. Before outlining the research question and motivation connected with the present work in more detail, the theoretical and practical relevance of the study that is associated with the research field and the research objects, such as international firms and multinational enterprises or regional and global MNEs, are discussed and explicated. Hence, the following subchapter serves to underpin the relevance of engaging with a topic that historically receives a lot of attention and still serves as foundation for a wide body of literature in academic research today.

1.2

Theoretical and Practical Relevance

When considering the great number of contributions in academia, the perspectives, concepts and theories developed in international business and management research

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vary in different ways and for various reasons (Seno-Alday, 2010, pp. 17–19).34 One of a few exceptions for consensus within the field is that international firms and MNEs alike are equally accepted and agreed upon as research objects (Fieldhouse, 1986, pp. 24–26). These organizations therefore serve as enablers for conceptualization, operationalization and measurement (Figure 1.1).35 At a first glance, it is plausible to regard the variety of conceptual approaches and modus operandi for an operationalization in IB and IM research as a valuable outcome of the efforts conducted while positively referring to the different fields and dimensions, such as indexes for globalization or measures for internationality, as the result of scientific richness. At the same time, it is strikingly paradoxical to observe that there exist no further alignment or consensus on the definition, distinct characteristics and shape, especially regarding various forms of international firms and MNEs. Scholars consequently face challenges when dealing with multinationality and -regionality, which

Domestic firms Internationalization

Firm internationality

Multinationalization

Firm multinationality Firm multiregionality

Multiregionalization Conceptualization

Regional MNEs

Global MNEs

Operationalization Measurement

Figure 1.1 Research objective in the context of theoretical and practical relevance. Source: Own illustration, on the basis of Kromrey (2002, pp. 169–199) and Schnell et al. (2013, pp. 119–127). 34 Regarding the very different motives of FDI, Dunning (1983, p. 103) states that “a single predictive theory of international production is just not possible, any more than it is realistic to expect that a general theory of international trade can explain all types of trade” (cf. Dunning, 1983, p. 103). 35 See Schnell et al. (2013, pp. 117–155), who define and discuss the understanding of the terminology as stated.

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15

becomes particularly evident when studying the many approaches (offered in academia) on conceptualization, operationalization and measurement. As reflected by the bibliography of the present work, the question of what should be understood as a MNE is already considered in early discussions and alongside the investigation of internationalization. The debate of these developments, however, does necessarily not encompass the question of changing degrees of multinationality and -regionality nor the appropriate dimensions and different dynamics associated with a construct that is empirically not directly observable, intangible and — in these various forms — wide-open to interpretation (Kircher, 1964; Hochmuth, 1978; Yeung, 2009, pp. 202–208). While some researchers argue that the question for internationalization (the how-question) is more important than the question for the degree of internationality (the how much-question), it can be argued that the discipline is in need of a control mechanism to actually assess and compare the degree of the processes in the first place (Vermeulen and Barkema, 2002; Goerzen and Beamish, 2003; Asmussen, 2012, pp. 271–272). Whether or not this replicates the appropriate sequence, the debate itself, as a matter of fact, reflects the need to further search for a standard in operationalization that also affects research streams on location decision (Rugman and Verbeke, 1993a; Pantzalis, 2001), the timing of foreign market entry (Buckley and Casson, 1981; Kogut and Singh, 1988; Benito and Gripsrud, 1992) or the value and performance of inter- and multinational diversification (Morck and Yeung, 1991; Hitt et al., 1997; Eckert et al., 2010).36 As outlined in the previous subchapter, regional and global thinking also exists regarding strategy research in academia. Although many studies on internationality are labeled this way (among others: Rugman and Verbeke, 2004a), very few can back this up with truly strategic elements such as size of foreign R&D or manufacturing, intra-company transfers or product diversity (Stopford and Wells, 1972; Egelhoff, 1988; Wolf and Egelhoff, 2002, pp. 182–185; Asmussen, 2012, p. 272). In the present work, regional and global deals with geographic scope, which does not necessarily represent strategic or structural alignment, but primarily reflects the measurement of business activity. The examination of theory thereby serves as a basis for the conceptualization and operationalization whilst the measurement and analysis of empirical evidence underpins the classification of MNEs as regional and global.

36 Among others, see Nguyen (2017, pp. 319–322), who outlines inconsistencies associated with the conceptualization and measurements of multinationality.

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An unambiguous conceptualization as foundation for further operationalization and measurement of this construct is also useful for application in practice. Withal, the practical relevance of the present work is threefold. Firstly, the growing importance of multinational and -regional presence and the increase of speed in market development indicates a growing need for an effective controlling of MNE business activities (Weber and Schäffer, 2016, pp. 342, 415, 543). Alongside, recent empirical research from practitioners suggests that the digital transformation enhances the global automation in finance functions in the near future (KPMG, 2017, pp. 34–40). Therewith associated, the standardization and optimization of concepts used to capture the geographic scope of business activity could increase the precision and value of planning, controlling and budgeting tasks within firms. Secondly and in addition to the internal use of concepts associated with multinationality and -regionality, the need for information on the geographic scope of MNE business activity also increases on the external side. Rating agencies, for example, view the internationalization strategy of a firm as part of the overall corporate strategy. In this thinking, changing degrees of foreignness influence the profitability and competitiveness of a firm and serve as a reflection on the success of a firm in foreign markets, whilst the assessment of past and future development is standardized for risk management and reporting purposes.37 The empirical evidence used in the present work also emphasizes methodological issues arising in the process of data collection, among others from International Financial Reporting Standards (IFRS) superseding International Accounting Standards (IAS), and therefore encourages additional standardization. Lastly, the empirical data includes large firms with a substantial role not only in their national but also their regional and partly the world economy.38 The study and analysis of this MNE-related empirical evidence hence provides insight on local/regional, industry-specific as well as overall trends and emphasizes implications for managerial practice as well as its practitioners respectively. Correspondingly, the findings of the present work contribute to the existing knowledge in theory and practice on the complexity and relevance relating to regional and global MNEs.

37 The implementation of the Basel Accords as well as the change from International Accounting Standards to International Financial Reporting Standards support this argument. 38 See Rugman (2000b, p. 2, 2005c, p. 224) and Dunning et al. (2007, p. 188), who point out the impact of firms listed in Fortune Global 500 for the world economy. As pointed out in Chapter 4, a considerable stake of European MNEs are also continuously listed in Fortune Global 500.

1.3 Research Question and Motivation

1.3

17

Research Question and Motivation

Considerable attention in the underlying research community is devoted to advancing the theoretical and empirical study of the business activity, relationship and comparison of regional and global MNEs. While taking relevant aspects from this existing body of theory and empiricism under consideration, it remains the research question and motivation of the present work to provide a conceptual and academic extension throughout the elaboration and creation of an updated and comprehensive perspective on the respected business activities of regional and global MNEs for an advancement of theory and empirical practice in this field of international business.39 In doing so, the existing efforts relating to this topic, which serve as foundation and provide ground for limitations alike, are outlined alongside two key aspects: 1. Existing research in the regional and global debate shows little and vague connection to the large number of contributions historically available in the discipline for the definition, concepts, measurement and classification of MNEs and their business activities respectively. From related research can be drawn that the identification of concepts, constructs and dimensions connected with the MNE is an important basis for a successful operationalization and measurement of regional and global MNEs and their business activities (Duriau et al., 2007; Kirca et al., 2011; Jormanainen and Koveshnikov, 2012). In the present work, this fruitful body existing in the field is addressed by two pillars. Firstly, it is necessary to conduct a detailed review of the variety of concepts and constructs related to MNEs, their business activities and the measurement of multinationality respectively (Hennart, 2011, pp. 136–137; Nguyen, 2017, pp. 319–321).40 The characteristics therewith associated serve as essential elements to identify dimensions and proxies that encourage the further development and deepening of research on classification systems in the context of regional and global MNEs. Secondly, the review of this existing research on regional and global relationships from the perspective of regional and global MNEs raises awareness for a mixture of different analytical levels in academic research (among others: Rugman and Verbeke, 39 For the advancement of theory, the present work focuses on the concepts for the measurement of multinationality. 40 Among others, see Annavarjula and Beldona (2000), Li (2007), Hennart (2011) or Aggarwal et al. (2011, pp. 558–565) for examples on constructs and Sullivan (1994a, 1994b) for examples on multidimensional constructs.

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2004a, pp. 7–9; Delios and Beamish, 2005, pp. 23–26; Rugman, 2005c, p. 1; Berrill, 2015, p. 87; Chadha and Berrill, 2016, p. 609). Consequently, there is a need to establish a separation between streams of research on firm processes, such as multinationalization or -regionalization, firm strategy, such as regional and global strategy, and firm classes as part of a classification system, such as regional and global MNEs. It is thereby worthwhile to also raise awareness for a co-existence of these streams on the analytical level, whereas possible shortcomings support the deduction of a second empirical aspect as follows. 2. Existing studies and empirical evidence in the regional and global debate suffer from theoretical inaccuracies and methodological or data limitation and reflect little foresight for the study and comparison associated with the geography and driving factors on regional and global MNEs and their (multiregional) business activities respectively. In historical perspective, the search for a fundamental explanation or general paradigm to explain MNEs and their business activities broadens and extends the field rather than provides an absolute solution (Buckley and Casson, 2003, p. 219, 2009, p. 1563; Buckley, 2016b, p. 892, 2016c, pp. 74–76). In consequence, the possible sources for argumentation on literary foundations for studies on the measurement of multinationality and -regionality as well as for the classification of MNEs are as manifold as divided in their origins. A standard in defining firm-level multinationality or classification is therefore not in sight (Nguyen, 2017, pp. 319–321), with the provisional result that much of the existing empiricism regarding regional and global MNEs conceptually builds on the research provided by Rugman and Verbeke (2004a) and Rugman (2005c) or Aggarwal et al. (2011). From a consideration of this standpoint, two pillars are critical for an advancement of research on the classification of business activity and regional and global MNEs. Firstly, scholars in academia already provide substantial support for theoretical inaccuracies and methodological limitations outlined with respect to the concept of Rugman and Verbeke (2004a) and Rugman (2005c) (among others: Dunning et al., 2007, pp. 177–178; Osegowitsch and Sammartino, 2008, pp. 186–188; Asmussen, 2009, p. 1193; Asmussen et al., 2015, pp. 306–311). The spread of the concept and data across multiple outlets in academia thereby fosters the impression that MNEs are static and in fact at least regional with dominant ties in their respected home region (among others: Moore and Rugman, 2003; Rugman and Brain, 2003; Rugman and Girod, 2003; Rugman and Brain, 2004a, 2004b; Rugman and Collinson, 2004; Yip et al., 2006; Collinson and Rugman, 2007; Oh and Rugman, 2007; Rugman et al., 2007; Rugman and Li, 2007; Collinson and Rugman, 2008;

1.3 Research Question and Motivation

19

Rugman and Verbeke, 2008a; Oh, 2009; Rugman and Oh, 2012; Oh and Rugman, 2014). Not surprisingly, the sheer number of the contributions underpinning regionalization hypothesis — and therewith attached possibly the myth created on economic globalization — serves as a foundation for peer-reviewed publications in academia today (for example: Verbeke and Kano, 2016, p. 83; Verbeke et al., 2016, p. 785; Buckley et al., 2017, p. 1061; Kano, 2018, p. 686; Rosa et al., 2020). The approach to the idea, where global MNEs are exclusive and the special but not the general case (Rugman, 2005c, p. 5), thereby contracepts the possibility for diverse and/or new developments on MNE business activity and hinders the search for alternative influences on MNE geographical orientation. Secondly, the use of concepts by both Rugman and Verbeke (2004a) and Rugman (2005c) and Aggarwal et al. (2011) qualifies for an increase in transparency concerning the process of aggregation, creation and consistency in data sampling (Dunning et al., 2007, pp. 177–178; Aggarwal et al., 2011, p. 565; Berrill, 2015, p. 92; Mullen and Berrill, 2015, p. 292). These issues are addressed in the present work by a deepening analysis of the methodological issues arising from the use of empirical data. Likewise, it is noted by Asmussen (2009) that the stream’s progress may be most fruitful when new empirical studies can be compared with the achievements of prior research. The present work is thus not about disproving existing hypothesis or research but deals with plausible explanations for both regional and global MNEs. While offering additional understanding on the forces driving potential changes in the geographic orientation of MNE business activity, the present work builds ground so that this line of research qualifies for the use in other communities in the field of international business, such as the study of linkages on multinationality-performance (M-P) or risk and value analysis. While the research question remains deliberately close to the theoretical and practical relevance as introduced beforehand, there are at least three reasons it is worthwhile to pursue this research for. Firstly, the present work provides additional insights on MNEs as regional and global MNEs by applying well-established theorizing for conceptualization, operationalization and measurement in the field of international business. By drawing from existing and proposed research as well as a systematic review of 100 contributions distinctly dealing with regional and global MNEs, it thus searches to advance the field’s understanding by testing the stability and robustness of examined theoretical and empirical knowledge associated with regionalization hypothesis as well as regional and global MNEs. The present work shall therefore serve as an updated perspective for the foundation of related research in the fields of decision-making and strategic management or on the coordination and configuration of (regional and global) value chains. Secondly, the empiricism

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considered for 64 European MNEs over the 11-year 2005–2015 period stems from a completely verified and set of longitudinal data.41 The extension and explicitness of detail on the analytical steps taken up to the generation of results thereby represents the ambition to provide a new level of transparency in sample creation as well as data collection and processing in the field. While a detailed review of the findings is thereby complemented by insights from the discussion of separate cases, it is thereby hoped for to create a new momentum for the existing continuum and the debate on (de-) globalization. In addition, the usefuland advantageousness of data from (global) MNE business activity is outlined while engaging in such research. Thirdly, the discussion and implications connected with the results in the external financial reporting analyzed reflect the (study of the) changing landscape of MNE business activity as well as its driving factors. The reality of the regional and global relationship in the context of MNE business activity that is thereby generated consequently aims to make this work a valuable contribution throughout the delivery of rigorous research and substantial information to theorists and managers alike.

1.4

Structure and Course of Conduct

To shed light on the research question set, the structure of this work encompasses two parts, namely Part I and Part II. These two parts each comprise at least two or more separate chapters (e.g. 1), subchapters (e.g. 1.1), sections (e.g. 1.1.1) or subsections (e.g. 1.1.1.1) respectively while the textual contents are outlined throughout these structural units’ paragraphs. In Part I, historical, fundamental theoretical and debate-specific knowledge in relation to regional and global MNEs is aggregated and analyzed. As the processing of these insights is critical to develop an understanding for the setup to follow, Part I thus represents a (first) critical unit, or core, of the work at hand. Consequently, this part is entitled An Examination of Theory. In Part II, longitudinal data from European MNEs is collected, processed, analyzed and discussed. In combination with the results and the updates on perspectives thereby generated and presented, Part II thus represents a (second) critical unit, or core, of the work at hand. Consequently, this part is entitled Empirical Evidence from European MNEs.

41 For a discussion of the empirical data and the titling and scope of the MNEs considered for analysis, see Chapter 4.

1.4 Structure and Course of Conduct

21

Chapter 1

Part I: An Examination of Theory

Chapter 2

Chapter 3

International Business Theory and Multinational Enterprises

Regional and Global Multinationals: A Literature Review

Chapter 7

An Introduction to Regional and Global Multinationals

Chapter 4

Chapter 5

Chapter 6

Research Design and Research Methodology

Longitudinal Results from European MNEs

Discussion of Results

Part II: Empirical Evidence from European MNEs

Conclusions and Outlook

Figure 1.2 The workings of structure and course of conduct. Source: Own illustration.

Whilst the structure as implemented is designed to be of substance for both theoretical and practical understanding, there is a necessity to generate a holistic view from theoretical and discourse-related challenges observed, research design and methodology as executed and results from empirical evidence and the perspectives therewith associated. Thus, introducing and concluding remarks are implemented ex ante to Part I and ex post of Part II to connect and integrate both theoretical and empirical examination and to prevent a loss of substance if proceeded otherwise. Whereas the remarks from Chapter 1 and Chapter 7 respectively hence function as an opening and concluding statement as well as a surrounding framework to the work’s partition provided, the course of conduct within is represented by the structural units as mentioned beforehand and implemented throughout. Consequently, Part I encloses Chapter 2 and Chapter 3, whereas Part II comprises Chapter 4, Chapter 5 and Chapter 6 (Figure 1.2). While the workings of structure and course of conduct are illustrated using Figure 1.2, the latter is implemented as follows. In Chapter 1, the central theme and approach to this work are introduced to provide key insight on the contents covered. As demonstrated, this includes the definition of the research field and the terminology connected with the title of such, the theoretical and practical relevance of the different analysis to follow, the research question and motivation set as well as the structure and course of conduct as herewith explicated. In Chapter 2, generally accepted knowledge and understanding from international economic, business and management research is examined to understand the fundamental proximity of the research field. This includes the

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historical integration and chronological origin as well as the nature and motives of the international business activity therewith related. Furthermore, the definition of multinational enterprises and the practices of measurement and classification are reviewed, analyzed and discussed. Whereas these contents deliver profound insight on the research object under investigation, the last subchapter of Chapter 2 serves as a résumé and assessment of the theoretical contents so far covered. In Chapter 3, a distinct research field at the intersection of international economic, business and management studies, namely the regional and global debate, is systematically reviewed. An analysis of previous approaches and studies is therefore conducted to create and present the state of the art within the research field. The findings thereby identified from 100 selected contributions dealing with regional and global MNEs are subsequently discussed based on the application of distinctly chosen foci, such as the use of different regional groupings, classes and levels of thresholds or contexts and actors, and critically approached upon. Thereupon, the definition of research gaps as well as the derivation and formulation of research hypotheses point out the necessity for further progress or action concerning this academic field. In Chapter 4, the research design and methodology are outlined. While the research design deals with the definition and purpose of the research object and assessments selected, the research methodology explains the modus operandi for the implementation of such. In connection with the design and methodology conducted throughout the present work, the composition, quality and characteristics of the data available for analysis from the database and the verified data samples are assessed and explained. Consequently, Chapter 4 serves to provide a transition from the theoretical thinking and understanding exhibited beforehand towards a more practically-oriented approach of research as conducted thereinafter. In Chapter 5, results from the study of longitudinal empirical data on the business activities of European MNEs is presented. While using scale measures on home-region/-country orientation, regional and global MNEs are classified by using the classification system and thresholds offered by Rugman and Verbeke (2004a) and Rugman (2005c) and the three-region system as a regional grouping. Further insight on the empirical results from European is then provided throughout the inclusion of country-, industry- and firm-specific findings as well as the comparison of such. The related, data-driven insights are then emphasized for the possibility of result generalization and explained to provide ground for the further discussion and review of results as outlined thereinafter.

1.4 Structure and Course of Conduct

23

In Chapter 6, the results and findings from the longitudinal data and study of European MNEs are taken into perspective. Therefore, the data on home-region/-country orientation and the findings from the classification of the MNEs are further assessed and used for a comparison with the results available from prior research in the field. In addition, (selected) cases from (multi-/inter-) regionalization of the MNEs under review are exemplified to discuss the changes in the respective firms’ business activities. While the discussion of results lays the basis, the originality and value of the present work as well as the implications for a possible advancement of international business theorizing/the discourse and managerial practice are thus outlined thereinafter. In doing so, the approach, data and results as presented in Chapter 5 and Chapter 6 are thus reviewed and complemented based on a delineation of content- and concept-related as well as methodological and empirical limitations. In the final section, a critical appraisal of the prior contents is outlined. In Chapter 7, which represents the final chapter of the present work, conclusions from Part I and Part II are drawn and integrated to generate a holistic perspective on the research offered. A résumé (incl. working steps and conclusions) with a focus on regional and global MNEs is thus provided to summarize the key findings from the foregoing chapters. In addition, recommendations for further and future research form an outlook on both theorizing/discourse as well as the analysis of data/empirical evidence respectively.

Part I An Examination of Theory

2

International Business Theory and Multinational Enterprises

“Textbooks describe […] the study of the allocation of scarce resources. That definition may be the ‘what’, but it certainly is not the ‘why’.” Ben S. Bernanke (2014, p. 17)

The origins and foundations of international business theory and the business activities of the firms therewith connected have been subject to much research and debate in academia (Rugman, 1980b, p. 376; Duriau et al., 2007, p. 26; Dunning and Lundan, 2008b, pp. 116–144; Dunning, 2009, p. 60). Scholars’ perspectives from international economics, business and management concurrently spread the discipline into different fields and streams (among others, see: Buckley and Casson, 1976; Swedenborg, 1979; Rugman, 1981; Hennart, 1982) while pointing out the need for a strategic management (Prahalad, 1975; Doz, 1976; Mintzberg, 1980; Bartlett and Ghoshal, 1989) or a strategy (Rugman, 2005c; Verbeke, 2013) of the MNE business activity therewith connected (Bain, 1956; Ansoff, 1957; Hymer, 1960; Fayerweather, 1969; Caves, 1971; Vernon, 1971).1 Chapter 2 provides an understanding of the relevant and distinct theoretical foundations from the international economics, business and management literature in the perspective of regional and global MNEs. In the first subchapter, the historical foundation and chronological integration of the research field are therefore examined (Subchapter 2.1). Within the second subchapter, related research on the 1 Among others, see Schumpeter (1954, pp. 12–14), who defines history, statistics, theory and

economic sociology as the four techniques that are employed by scientific scholars. Hence, all of these shall be considered throughout the chapters and subchapters to follow hereinafter. © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 C. Czychon, Regional and Global Multinationals, mir-Edition, https://doi.org/10.1007/978-3-658-33737-7_2

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nature and motives of the international business activity is consolidated and delineated (Subchapter 2.2). In the third subchapter, definitions are drawn and aggregated from existing research in the fields, structurally reviewed and analyzed for potential future guidance on the definitional and terminological span or boundaries of regional and global MNEs (Subchapter 2.3). In the fourth subchapter, the operationalization and measurement of MNEs in this literature is outlined and discussed (Subchapter 2.4). Lastly, the fifth and final subchapter provides a critical (re-) appraisal and evaluation of the contents covered in order to summarize initial results from the examination of theory and to emphasize the insight and understanding developed regarding regional and global MNEs (Subchapter 2.5).

2.1

Historical Foundation and Chronological Integration

2.1.1

Review with a Focus on Prominent Works and the Unit of Analysis

Considering and focusing on the extant literature and publications with quantitative data in business and economics, the origins of this research could possibly be traced back to as far as François Quesnay (1759), who — primus inter pares — observes monetary differences that accumulate pre- and post to an underlying transaction, such as the purchasing, processing and selling of goods.2 Consequently, Quesnay’s observations within the agricultural sector show that these activities result in an economic surplus, or so called capital stock (Eltis, 1975a, p. 169; Blaug, 1985, p. 25). The findings are published within his seminal manuscript Tableau économique3 , which reflects to be one of the first 2 Eltis (1975a, p. 167) states that François Quesnay (1694–1774), a French economist, is within

the center of the first school of economists, the physiocrats or economists in pre-revolutionary France. According to Schumpeter (1942, p. 22) and de Haan (2016, p. 123), Karl Marx also derives his conception of the economic process in his works from the nineteenth century as a whole from Quesnay, whereas he entitles such as “[…] an extremely brilliant conception, incontestably the most brilliant for which political economy had up to then been responsible […]” (cf. Marx and Engels, 1965, p. 319; Marx, 1969, p. 437). Additionally and as stated by Samuelson (1962, p. 4), Joseph Schumpeter regards François Quesnay as one of the four all-time greatest economists. Possibly contrary and regarding its impact for the history of economics, Schumpeter (1954, p. 9) himself states that the precise point of Quesnay’s scientific achievement remains arbitrary. 3 Or Economic Table, which, according to Eltis (1975b, p. 351) and Müller (1978, p. 156), represents a development strategy that can still be of certain relevance, especially for developing countries. In contrast, Borgstede (1977, p. 32) finds that the macro-economic concepts of François Quesnay (1759) and David Ricardo (1817) are only of historic value.

2.1 Historical Foundation and Chronological Integration

29

works to question and standardize the workings and charisma of an economy and its players (Schumpeter, 1954, p. 175; Blaug, 1985, pp. 25–28). In contrast to other contributions of his time, Quesnay connects the foundation of wealth to the generation of capital, and not to the wages or rents that are associated with the trade and transfer of goods. Thus and whilst experiencing a development and sophistication in academia, science and practice for more than a quarter of a millennium, Quesnay’s work and thinking is acknowledged to be of substance and foundation for today’s analysis and academic practice in business and economics (Dunn, 1941, p. 335; Samuelson, 1962, p. 3; Eltis, 1975a, pp. 168 ff., 1975b, p. 337; Borgstede, 1977, pp. 345–346; Müller, 1978, pp. 153–154; Müller, 2001, p. 53; de Haan, 2016, p. 123). The milestone thinking as established in pre-revolutionary France is furthermore of substantial say when explaining the workings of production in an economy as developed and understood by physiocrats and early economists (Dunn, 1941, pp. 335, 344; Schumpeter, 1954, pp. 181–194; Marx, 1969, p. 107; Blaug, 1985, p. 60; Müller, 2001, p. 11 f.) to include Adam Smith4 (1776a, 1776b), Edmund Burke5 (1800) or Alfred Marshall6 (1890).7 Subsequently, (political) economists sequentially add (new) components (for example: Say, 1803), provide a deepening orientation (for example: Walras, 1874, 1954; Pareto, 1896), or carry on thinking beyond national borders (for example: Ricardo, 1817; Haberler, 1933, 1936), with the development and sophistication 4 According to Schumpeter (1954, p. 192) and Müller (2001, pp. 11–12), Adam Smith (1723–

1790) may have been influenced by Quesnay during his stay in Paris in 1766. See Smith (1776b, pp. 270, 277–279, 1937, pp. 637, 642–644), Guillet de Monthoux (1993, p. 4), Tribe (1995, pp. xii, 26), Müller (2001, p. 11) and Raphael (2007, p. 117) for an in-depth discussion. 5 According to Dunn (1941, p. 344), Edmund Burke’s (1729–1797) principal economic dictum may have easily been written by Adam Smith. Oppositely, Barrington (1954, p. 256) states that Adam Smith is a source of economic ideas for Edmund Burke. Thus and as provided within the preface of Burke (1800, p. vi), it can be presumed that both influenced each other. 6 According to Borgstede (1977, p. 357), Karl-Heinrich Rau, a German economist (1792– 1870), already works on the functioning of supply and demand in an economy decades before Alfred Marshall (1842–1924). Nevertheless, the ideas are supposedly not predominantly spread within the (English-, French- or German-speaking) academic literature. Karl-Heinrich Rau can thus be regarded as the inventor, whereas he is not being rewarded with the substantial credit for his achievements with historians in economics, such as de Haan (2016, p. 69), referring to Marshall (1890) as the standard book on neoclassical economics. Further reading and information on this observation is provided by commentaries from Schumpeter (1954, pp. 833–840) and Blaug (1985, pp. 328–425). 7 This also comprises to what Adam Smith (1937, p. 778) refers to as governing uncertainty or the impact of uncertainty on public policy, meaning that actions can be determined by the institutional environment.

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of theorizing to forward to a more distinct and complex level of expertise (among others: Schumpeter, 1912, pp. 76–77, 1954, pp. 615–645; Marx, 1969, pp. 245–282; Blaug, 1985, pp. 88–178, 570–613).8 Additionally, Heckscher (1919, 1949) and Ohlin (1933) advance such thinking by introducing their theory of factor endowment when hypothesizing that each labor abundant countries export labor intensive and capital abundant countries export capital intensive products (Heckscher et al., 1991). Whilst the academic thinking thus provided somewhat tries to explain the trade patterns between different levels of economic development, the empirical literature as well as an overview of such provided by Leamer and Levinsohn (1995) show that their value is limited for trade patterns of countries with similar technologies or factor endowments. Consequently, the focus in research as applied with the country-level as the unit of academic analysis is subject to the need of transition (Rugman and Verbeke, 2009, pp. 146–148). Consecutively, a different group (of economists) viewing firm activity from the macro-level as a component in the long-term capital section of a country’s balance of payments examines portfolio selection under conditions of uncertainty. In doing so, James Tobin (1958) and Harry M. Markowitz (1959) develop a model to explain the diversification of asset holding whereas Herbert G. Grubel (1968) shows that risk can be reduced by diversification, for example when holding an efficiently diversified portfolio of international assets. Whilst these scholars thus show that most trade between developed countries is intra-industry trade (Grubel and Lloyd, 1975), it is also observed that capital is transferred from one country to another due to differences in real interest rates (Iversen, 1967; Heidhues, 1969; Hennart, 2001, p. 129).9 Consequently, the focus in research as applied with the industry-level as the unit of academic analysis is subject to the need of transition (Rugman and Verbeke, 2009, pp. 148–150). The latter transition is particularly displayed by the work of Stephen H. Hymer (1960), who highlights the difference between portfolio investment and 8 Such as examining the lowering of national as well as physical barriers to entry new markets.

For example, Lyonnais economist and businessman Jean-Baptiste Say (1803), who states that demand is created by supply as well as that supply and demand in an economy tend to be in state of equilibrium; British economist David Ricardo (1817), who states that factor endowments and technological progress are the basis for differences in production cost in between countries; or John Maynard Keynes (1920a), who argues that macro-economic demand is the key component for production and employment. 9 See Dimand (2014), who provides distinct research on the shaping character that the works and lectures by Keynes or Schumpeter (Dimand, 2014, pp. 12–14) and Markowitz (Dimand, 2014, pp. 33–35) have on James Tobin. Additional insight is also provided by Blaug (1998, pp. 285–288).

2.1 Historical Foundation and Chronological Integration

31

foreign direct investment based on the foreign activity of firms from the United States of America while recognizing that interest rate differences are a minor cause for an expansion of international operations (Hymer, 1960, p. 77; Hennart, 2001, pp. 129–131; Fuchs and Apfelthaler, 2009, pp. 71–74). In the following, previously generally accepted patterns with regard to the industry-level as a unit of analysis are challenged (Bain, 1956, p. 45; Hymer, 1960, p. 12; Cox and Harris, 1985, pp. 139–140; Smith and Venables, 1988, p. 1523), especially when academics, such as Hirsch (1976), focus their research on the application of the firm-level as a unit of analysis throughout on the usage of sales revenue, FDI or subsidiary data (Rugman and Verbeke, 2009, pp. 148–150).10

2.1.2

Discussion of the Multinational Enterprise’s Eminent Role as a Research Object

As stated throughout the previous section, the unit of analysis in academia experiences a transition throughout the past centuries and decades. While this chronological integration coincides with the fact that MNEs represent the world’s largest entities (White, 2012), research fields and streams provide many perspectives or choices in foci when promoting the impact of such as follows. Firstly, authors in international business and management engage in a rich body of expertise when referring to activities (Bruck and Lees, 1966; Dunning, 2009), strategies (Rugman, 2000b; Ghemawat, 2005; Asmussen, 2012; Verbeke and Asmussen, 2016), structures (Chandler, 1962; Hall, 1972; Egelhoff, 1982) or interactions between multinational enterprises and other firms (Burgelman, 1983), governmental institutions (Dunning, 1997; Stopford, 1999) and society (Rugman and Verbeke, 2003d). Thereby, scholars in the discipline establish a basis for the creation and conceptualization of prominent theorizing, such as the Coasen (1937) transaction cost economics and, successively, Buckley and Casson’s internalization theory (1976), as well as the Penrosean (1959) resource-based view as a theory of the growth of the firm and the innovative or dynamic capabilities connected with the strategic management of such (Teece 10 Dunning (1983) gives further details on the foreign activities of firms and outlines an explanation of changes in international production, technological capability, market failure, organizational form and locational determinants throughout the 1870–1978 period. From this perspective, it is to note that the academic literature refers to units of analysis not mentioned in the above (for example: Buckley and Casson (1976), who focus on the global economic system). For an example, see Beleska-Spasova and Glaister (2009) for an analysis of the geography of British exports on the country- versus firm-level.

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et al., 1997). Secondly, scholars in the discipline include the analysis of empirical data or the transfer and connection of theoretical knowledge with implications for management practice, leading to the development of heuristic and empirical typologies (for example, among others, see: Perlmutter, 1965, 1969; Perlmutter and Heenan, 1986; Bartlett and Ghoshal, 1989), categorization (for example: van Pham, 2006; Zhou and Guillén, 2016), and classification (among others: Rugman and Verbeke, 2004a; Rugman, 2005c; Aggarwal et al., 2011), as well as the creation of managerial frameworks that deal with a firm’s multinationality (for example: Prahalad, 1975; Doz, 1976; Bartlett and Ghoshal, 1989). By this means and under consideration of the firm-level as the unit of analysis, a MNE’s configuration depends on the use of CSAs and a portfolio of non-location-/location-bound FSAs respectively (Rugman and Verbeke, 1992, 2003a, 2009). Indirect- and/or directly in relation to the works of Schumpeter (1912, 1942), Tobin (1958), Markowitz (1959) and Grubel (1968), Alan M. Rugman consecutively applies internalization theory to corporate international finance in his dissertation (Rugman, 1974) and conceptualization (Rugman, 1979). Conclusively, his contributions from a meso-economistic perspective are thereby a manifestation for the transition from a physiocratic school of economics and trade towards an international business and management perspective (among others: Rugman and Verbeke, 2004a; Rugman, 2005c) and serve as reflection and proof for the influence and link of a very powerful intellectual lineage that can be associated with regional and global MNEs (Rugman, 1980c; Alpander, 1980, p. 108; Dunning, 2001, p. 174, 2003, p. 109; Verbeke, 2015, p. 23; Buckley, 2016a, p. 756; Casson, 2016, pp. 758–760).

2.2

Nature and Motives of International Business Activity

As exemplified throughout the previous subchapter (Subchapter 2.1), the extant literature in international business and management research provides a rich body of contributions that is, firstly, triggered in large by the number of publications in the field of economics (Penrose, 2002, p. 9; Roth and Kostova, 2003, p. 884) and, secondly, subject to continuous extension and specification over time (Aharoni and Brock, 2010, p. 6; Seno-Alday, 2010, p. 17). When approaching regional and global MNEs as a research object in this context, it is thus inevitable to proceed without providing a consolidation on the nature and the motives of international business activity. The presentation of such throughout the following paragraphs thereby places and discusses regional and

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33

global MNEs in the wider context of the field’s and stream’s expertise, provides the foundation for the examination conducted in the two subchapters hereinafter and highlights facets possibly affected by this research’s output. The term nature lexically describes the inherent character or basic constitution of a person or an object while a definition is an action or process that expresses a specific meaning to something (Friedrichs, 1990, pp. 73–81; Merriam-Webster, 2018). In other words, the essential nature of an object, word or word group is outlined using definitions as statements. A particular kind of behavior or natural and normal function of an object, word or word group is therefore represented by an activity, which implies the necessity to further review the nature of internationalization before analyzing and discussing definitions of the MNE. The literature dealing with international business activity and its management that focuses on the nature of internationalization (Cantwell and Brannen, 2016, p. 1025) and the related activities offers a large variety of motives (Rugman, 1975; Alexander, 1990; Dunning, 1993, 2000, p. 21; Dunning and Lundan, 2008b) with reviews and assessments providing considerable ground for debate or alignment alike (Tatoglu et al., 2003; Hutchinson et al., 2007; Hashim, 2012; Cuervo-Cazurra and Narula, 2015, pp. 2–4; Benito, 2015; Cuervo-Cazurra et al., 2015; van Tulder, 2015). Thus and while methodologically following as suggested by Buckley and Casson (1998b, p. 41), the relevant models and frameworks discussed in this literature are allocated hereinafter while zeroing in on the importance of MNE definition and measurement. The theoretical models associated with the nature of international activity (Cuervo-Cazurra and Narula, 2015, p. 2), among others, include technical change (Posner, 1961), the product life cycle (Vernon, 1966), internalization theory (Coase, 1937; Buckley and Casson, 1976), sequential internationalization (Johanson and Vahlne, 1977, 2009; Vahlne and Johanson, 2013, 2017), innovation (Cavusgil, 1980; Teece et al., 1997), gestalt or archetype approaches (Macharzina and Engelhard, 1991; Ghemawat, 2007; Sammartino and Osegowitsch, 2013), firm-, country- and non-location-/location-bound advantages (Rugman and Verbeke, 1992, 2009), the big step hypothesis (Pedersen and Shaver, 2011) or the (double-) diamond approach (Porter, 1990; Rugman and D’Cruz, 1993; Rugman and Verbeke, 1993a). On the other hand and if to apply a behavioral economics perspective to the analysis of international activity with a decision-maker classifying the motives of such (Simon, 1947; Cyert and March, 1963; Cuervo-Cazurra et al., 2015, p. 26), the existing and wide-ranging body of frameworks can be divided into vertical and horizontal (Hymer, 1960), commercial, non-commercial and inadvertant

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(Hollander, 1970), push and pull (Kacker, 1985; Treagold and Davies, 1988), upstream and downstream (Porter, 1986), growth-oriented, limited domestic market opportunities and other (Williams, 1992) as well as market-seeking (Behrman, 1972; Dunning, 1993). Conclusively, (business) models associated with the nature of international activity offer explanatory facts which are previously represented in heuristic or supplementary complex ways throughout the isolation and examination of distinct facets. In contrast, frameworks associated with the motives of international activity encompass a high detail and a search for optimization while trying to meet the requirements of an individual firm or industry (Porter, 1991, pp. 97–98; Buckley and Casson, 1998b, p. 24; Tallman et al., 2018, pp. 521–525). From a meta perspective, the following remarks indicate three possible starting points for a critical appraisal of the literature dealing with the nature and motives of international business activity. Firstly, the models related to the nature of international business activity as well as their continuous extensions provide vague or opposing conclusions. For example, Posner (1961) provides understandable reasoning for the existence of international trade whereby it remains undefined if technical change must necessarily result in internationalization (or not). Beyond that, the empirical data and theoretic thinking outlined by Pedersen and Shaver (2011, p. 273) is in strong contradistinction to the Uppsala/internationalization process model as generated by Johanson and Vahlne (1977).11 Whilst the strategic design of international activity can range from international exports to foreign direct investment, academic scholars and practitioners alike are thus bequeathed with a potpourri of conceivable explanations for the issues at hand while it appears that the compelling reasoning associated remains largely subjective. Secondly, many frameworks connected with the motives on international business activity appear to lack in-depth theoretical reasoning and seem to be developed on an ad hoc basis. Hence, a further extension and sophistication of such as based on the creation of alternative internationalization motives could forward theorizing (Cuervo-Cazurra et al., 2015, pp. 32–33). Thirdly, it appears that neither the reviews and assessments nor the original literature directly connect nature and motives of international business activity with each other. The results of the research conducted are therefore not in balance with the underlying individual streams and thus prevent the generalization and prediction of firm activity, for

11 See

Subsection 2.3.2.1 for further remarks on the Uppsala/internationalization process model as well as its extension.

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example by deducting solutions for the strategic design of international business activity. Conclusively, the extant literature provides many different causes and explanations for the existence of international business activity. Thereby, it remains doubtful that academic scholars can provide a comprehensible tenor or overall solution. With the presence of MNEs representing these activities, questioning arises whether progress can be achieved when approaching the issues at hand from an in-depth perspective. Consequently, the research presented hereinafter deals with this alternative solution throughout the review, analysis and discussion of definitions and measurement12 associated with the different kinds of international business activity (Section 2.3).

2.3

Definitions and Concepts Associated with Multinational Enterprises

The variety of explanatory principles in existing models and frameworks in international business and management research facilitates the multitudinous of scholars’ understandings on the character and attributes or the terminological and semantic differences associated with the definition and concepts on international business activity. Thereby, researchers and practitioners alike often refer to the international firm, the transnational corporation or the multinational enterprise as the underlying research object(s). It thus remains inevitable to investigate and emphasize the ramifications connected with the different use and application of each respectively. The following three sections of this subchapter therefore provide a review (Section 2.3.1), an analysis and discussion (Section 2.3.2) as well as an evaluation on existing definitions and concepts in relation to the existing (fundamental) literature on regional and global MNEs (Section 2.3.3).

2.3.1

Introduction to the Review on Definitions and Concepts

Definitions and concepts generally serve as a starting point for the description and investigation on the character and attributes of a research object (Friedrichs, 1990, pp. 73–81). While certain standards on adequacy, completion, differentiation and impartiality need to be considered when working on such, definitions and concepts 12 Throughout

the present work, measurement applies as a synonym for quantification.

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elucidate the meaning of a research object, eliminate possible confusion regarding other terminology, provide emphasis when needed and take all characteristics, attributes and criteria into consideration (Borsodi, 1967, pp. 8–33; Aggarwal et al., 2011, p. 558). This approach is also generally acknowledged and practiced by scholars in the research fields of international business and management13 (among others: Aharoni, 1971; Raghunathan and Chandran, 1990; Annavarjula and Beldona, 2000; Oesterle and Wolf, 2011) with respective works severely differentiating between the analytical-level taken into consideration or applied on the definitions and concepts from previous research in the field (for example: Fischer, 2006, pp. 36–40; Richter, 2010, pp. 27–29; Aggarwal et al., 2011, pp. 558–559).14 Whereas there exist no argumentation for an align- or agreement within the research stream regarding the possible scope of definitions to review, analyze and discuss (among others: Vernon, 1972, p. 8; Aggarwal et al., 2011, p. 559; Hennart, 2011, p. 136), it can be presumed that ongoing research (on regional and global MNEs; author’s note) shall not be limited to the operational but include a wider range of definitions and concepts (Perridon and Rössler, 1980a, p. 214). The present work reflects this alternative by, firstly, collecting and creating an individual data sample of definitions and concepts from the international business and management literature and, secondly, following a comprehensive approach to structurally examine this input and knowledge for substantial and formal specifics associated with different kinds of firms, such as regional and global MNEs. The analysis and discussion outlined throughout the following subsections consider more than 100 excerpts from the literature dealing with discourse-related 13 See Contractor (2000, pp. 7–9) for an exemplification of a comparison between international management and international business. 14 Fischer (2006, pp. 36–40) provides an overview of conceptual approaches from the literature dealing with the definition of the international firm and its business activity, which also considers MNE-related material. Contradictory, both Richter (2010, pp. 27–29) and Aggarwal et al. (2011, pp. 558–559) single out their research to the approach presented by Aharoni (1971) without providing further argumentation on other concepts available from the discourse (for example: see Fischer, 2006, pp. 39–40, for an overview). In addition, Aggarwal et al. (2011, p. 558) refer to four different types connected with the definition of the MNE in the international business and management landscape (namely abstract, conceptual, lexical and operational) but do not yet disclose any information on their choice of focus on the operational definition nor state difficulties possibly faced when addressing the understanding of the other three types stated. Operational definitions thereby broadly represent “a word or term” that “provides a clear, concise meaning of a concept to guide measurement and make it amenable to scientific investigation” (cf. Aggarwal et al., 2011, p. 558). A differentiation regarding other possible kinds of definitions, such as explicated by Fischer (2006, pp. 22–29), is not part of their publication on the MNE.

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definitions and concepts.15 The collection of excerpts is conducted based on their citation or usage in the relevant literature associated with regional and global MNEs and in line with previous contributions from this field (for example: Raghunathan and Chandran, 1990; Aggarwal et al., 2011).16 Before engaging in a detailed analysis and discussion of the excerpts, the broader characteristics, such as publication format or outlet, year and decade as well as author or authorship, are outlined as follows. In this process, the excerpts are also tagged as international, transnational, multinational, global or other 17 for the purpose of sorting. Whilst many scholars in the field of international business and management in recent years premise their research on blind- or peer-reviewed publications, the literature examined hereinafter stems from journal-based and monographic works alike. In this case, monographic works account for more than half of the excerpts considered for the analysis and discussion hereinafter and include (monographic) PhD theses, organizational reports and individual chapters from collective volumes. The journal-based works delivering contents stem, among others, from Journal of International Business Studies, Harvard Business Review, The Bulletin, Columbia Journal of World Business, The Multinational Business Review, California Management Review, European Management Journal and The Quarterly Review of Economics and Business.18 Research or working papers, such as provided by Behrman (1969), Macharzina and Engelhard (1984) and Perriard (1995), are also considered as journal-based excerpts from the literature with the outline of these publications as presented by its respective authorship prove to be likely more similar to this kind of format or outlet.19 Figure 2.1 provides an initial overview of the data sample and generates initial insight based on the development for the format or outlet throughout the seven decade period selected. Consequently, the details of these contributions are facing additional consultation as follows.

15 See

Appendix 1: Excerpts from the Literature for more details. contrast to Aggarwal et al. (2011, p. 559), the research subsequently presented is thus not limited to empirical samples. 17 Other refers to excerpts than cannot be associated with the tags stated beforehand. The motivation for the approach as conducted is primarily drawn from United Nations (1973) and finds explanation, adaptation and argumentation hereinafter. 18 The outlets are stated in numerical order and are furthermore singled out to journal-based contributions that are considered at least twice regarding the number of excerpts analyzed and discussed hereinafter. 19 See Appendix 2: Excerpts by Publication Format, Outlet for more details. 16 In

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25

20 14 18

15

10

10

5

7

7

7

7

11

10 8 3

3

0

1950s

1960s

1970s

1980s

Journal-based

1990s

2000s

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Figure 2.1 Excerpts from the literature by publication format or outlet, 1950s–2010s. Source: Own illustration.

The literature dealing with definitions and concepts of international firms or MNEs often refers to works from the 1960s, such Lilienthal (1960) or Bruck and Lees (1966), as the field’s starting point. Whereby Lilienthal (1960) is first in applying the term multinational corporation and Bruck and Lees (1966, 1968) can be considered as an initiative research for the calculation on the extent of foreign operations (Rugman, 1974, p. 77; Aggarwal, 1979, p. 7; Dunning, 2002, p. 252; Kobrin, 2005, p. 222), only few scholars are thus far considering the contributions by Byé 1957, 1958, p. 161 and his investigation on the self-financing of the multi-territorial firm when engaging with a case from the international oil industry (among others: Dunning, 1993, p. 66, Jones, 2005a, p. 4). Expertise thereby formally enfolds over several decades, whereas the 1950s can be considered as an starting period for a drawing of excerpts with sourcing on possible different kinds of MNEs, such as minoritynationals (Mullen and Berrill, 2015, p. 302), emerging specifically from journal-based works as recent as 2015.20 In such a continuous debate, the selection of excerpts necessarily refers to many different authors that engage and hold authorship throughout the field’s progress in this period. Whilst 101 different individuals contribute to the debate based on the excerpts taken into consideration for the analysis and discussion in 20 See

Appendix 3: Excerpts by Publication Year, Decade for more details.

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this work, 16 authors are prominently entitled to (co-) authorship of excerpts more than once. Among others, these include Nicholas K. Bruck and Francis A. Lees (4), John H. Dunning (5), Michel Perriard (4), Alan M. Rugman (9), Eugen H. Sieber (3), John M. Stopford (3) as well as George S. Yip (4).21 In some cases, but continuatively, authorship of the excerpts contributing to the underlying sample is directly held by the publishing organization, such as the Commission of the European Communities, Organisation for Economic Co-operation and Development and United Nations Conference on Trade and Development or the United Nations (2) respectively.22 While the paragraphs in the above serve as an introduction, the selection of excerpts conclusively emphasizes three first findings from the wider body of the literature on regional and global MNEs. Firstly, the publication format or outlet associated with the excerpts from the literature includes monographic style as well as journal-based output from the underlying research field. A slightly dominant part of the excerpts thereby stems from (hypothetically traditional; author’s note) monographic works, which points out that both formats are of substantial input. Secondly, the track of contributions over the examination period shows the 1960s, 1970s and 1980s as especially active periods with 20 or more excerpts drawn per decade. Regarding the selection of excerpts, journal-based works but not monographies thereby seem to serve as a trigger for the initiation of progress and development. Thirdly, authorship is wide-ranging and consequently relates to a group of many individuals where only few scholars contribute to the excerpts on multiple occasions, which, ultimately, results in an increased complexity for the management and handling of the respective contents. The introductory findings conclusively indicate that an extended analysis and discussion is required to shed further light on the specifics of excerpts and, likewise, regional and global MNEs. This requirement is therefore met and followed upon in the next section (Section 2.3.2).

21 The figures in parentheses represent the number of excerpts that are associated with the individual (co-) author(s). 22 See Appendix 4: Excerpts by Author, Authorship for more details and Inkpen and Beamish (1994) for a similar approach.

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Analysis and Discussion of Definitions and Concepts

The wide range of contents and various facets relating to definitions and concepts as introduced throughout the previous subsection alongside the high amount of publications contributing to the continuum emphasize the existing need and relevance of additional and future investigation within this line of research. It thereby remains inevitable to stress the fact that very little consensus, consolidation or alignment exist for the individual terminology, understanding or content on organizational entities exposed to each international, transnational, multinational, global or other (possibly existing) kinds of foreign business activity.23 This phenomenon is particularly notable as original substance and efforts stem from organizational (United Nations, 1973; Commission of the European Communities, 1976; OECD, 2008), practical (Clee and di Scipio, 1959; Maisonrouge, 1974) or scientific sources, with the latter including pioneering works on international firms (Hymer, 1960; Bruck and Lees, 1968; Fischer, 1968) or multinational enterprises (Byé, 1957, 1958; Lilienthal, 1960; Aharoni, 1971) as well as their ulterior comparison (Raghunathan and Chandran, 1990). Affecting traditional research, it is thereby especially of concern that this observation also distresses existing research that directly deals with the definition of the international firm or (regional and global) multinational enterprises (for example: Fischer, 2006; Aggarwal et al., 2011) and well-respected lines of contiguous research (for example: Nguyen, 2017, pp. 319–321; Nguyen and Kim, 2020, pp. 3–4), such as contributions on the multinationality-performance (M-P) relationship (for example: Kim et al., 1989; Annavarjula and Beldona, 2000; Li, 2007; Hennart, 2011). Though approaches exist, the underlying as well as accompanying lines and streams of research that refer to the different kinds of foreign business activity in organizational entities do not separate or diversify but overlap on specific details of characteristics respectively. Accordingly, questioning thus remains and arises on how progress can be achieved if the terminology associated with the research objects under investigation, such as regional and global MNEs, is unclear, unstable or unprecise. This ultimately causes the need to engage in deepening, yet alternative analysis and discussion of excerpts available from the literature.24 The excerpts on international, transnational, multinational, global or other 23 The possible differences associated with the foreign business activity of organizational entities, such as exports, licensing, joint ventures or subsidiaries, are addressed hereinafter. 24 As stated beforehand, the full list of excerpts as drawn from the literature is provided within the appendices.

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kinds of organizational entities with foreign business activity are therefore separated and investigated regarding their characteristics and contents. Factoring in existing theorizing from the specifics of the terminology as applied in the field, this process thus allows to build ground for future progress and additional insight, to spot existing dissimilarities or overlaps and, possibly, to originate their sources and sketch or outline their extent respectively. In the course of sample generation, sources for the creation of a list of excerpts are thereby located within the international business and management literature as well as contiguous research fields.25 Correspondingly, the following two examples demonstrate the process of combining excerpts from the discourse with their respective international or multinational dimension: “Any service firm doing business across national frontiers can claim to be international.” (cf. Lovelock and Yip, 1996, p. 65) “The multinational enterpriseis not acting like an agglomeration of domestic companies, loosely held by equity shares, but like a closely-controlled single enterprise, located in markets separated by national boundaries and operating under several national governments. Its essential feature is ‘unity in diversity’.” (cf. Behrman, 1969, p. 62)

Consecutively, Figure 2.2, which spans over a seven-decade period of observation, pictures first insights on the excerpts that are drawn from existing research and tagged in this procedure. It is thereby to emphasize that only 21 of the 105 excerpts relate to the international dimension. This seems remarkable at first sight, because the international firm is often presumed to act as a main term or central research object within the fields of international business and management. Rather than concentrating on the latter, the data and figure suggest that the excerpts’ scholars and authors also provide efforts alongside various other (or sub-) kinds of organizational entities with foreign business activity. This is especially the case for the term multinational, which reportedly receives heavy attention based on the 58 excerpts drawn. Though the international firm remains a center piece, the data sample consequently indicates that the term of the international firm may serve as an overall title related to the discipline, but that the dimension does not yet directly represent the core of the existing research field. Conclusively, different kinds of 25 As outlined in the appendices, previous research partly contributes to the process of sample generation.

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25

3

1 1

1

20

2

15

8

17

17

1

1 2

3

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9

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2 1

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3

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10

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Global

1

1 2

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Figure 2.2 Excerpts from the literature by dimension, 1950s–2010s.26 Source: Own illustration.

(sub-) dimensions, such as regional and global MNEs, may be identified as more suitable research objects to tackle the center of debate. In the following, the process of analyzing and discussing the definitions and concepts drawn from the literature with the excerpts is broken up into three subsections. Each subsection so represents rudimental findings from the underlying discourse on the dominant dimensions as well as regional and global MNEs respectively. Consequently, the first subsection deals with the scientific integration and origin of the excerpts to provide insight on the possibility of a greater (dis-) agreement or overlap within the contributions examined (Subsection 2.3.2.1). The second subsection provides reasoning for a structural and standardized examination of the terminological bias and dichotomy in place (Subsection 2.3.2.2). This is thus crucial for the consecutive third subsection, which addresses the conceptual- and content-related diversity associated with the selected literature based on the implementation of a newly developed, yet alternative approach, that makes use of the characteristics applied in the

26 It is to note that the excerpts that are authored by Byé (1957, 1958) are hereby shown as part of Other. This is due to the fact the author uses different terminology throughout his work by applying the abbreviation “G.U.I.” for “Grandes Unités Interterritoriales” in the French version (cf. Byé, 1957, p. 270) and “L.M.U.” for “large multiterritorial units” in the English version (cf. Byé, 1958, p. 148). Therefore, it is not possible to connect the excerpts with a dimension respectively.

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excerpts to generate implications for the definition of the international, transnational, multinational and global dimensions (Subsection 2.3.2.3).27

2.3.2.1 Scientific Integration and Origin The question on the scientific integration and the origin of scholars’ understandings on the multinational enterprise is one that is continuously raised and debated in the field (among others: Wells, 2000; Dunning, 2001, pp. 173–175, 2005; Teece, 2006; Ferreira, 2011; Ferreira et al., 2013) and which can be extended on regional and global MNEs (Fastoso and Whitelock, 2010; Oh, 2014). For the development of a comprehensive stance, the discourse is thereby analyzed concerning the positioning regarding overall tenors and fundamental orientations but also the background and descent of the scholars holding authorship to the excerpts. Focusing on the definitions available from the literature drawn, both directions are addressed hereinafter. Concerning overall tenors and fundamental orientations, it is observed that the definitions available from the excerpts relate to six, possibly more, different perspectives, namely territorial expansion, the product cycle, risk diversification as well as exchange rate, behavioral or managerial theorizing (Dunning and Lundan, 2008b, pp. 82–93). Territorial expansion is an early considered viewpoint that is already outlined by Byé (1958, pp. 164–166) and Hymer (1960, pp. 192–196). Both authors thereby find interest in the argument that an increase in foreign activity provides opportunities to strengthen or move towards a monopoly power, whilst neither Byé nor Hymer consider cost reductions, for example through the access to cheaper resources, or a boost of strategic competitiveness, for example based on an improvement in product quality, as vastly urging factors (Dunning and Lundan, 2008b, pp. 82–84). The concept of territorial expansion is also the basis for Vernon’s (1966, 1979) product cycle and excerpts associated with programs on foreign production (Heininger, 1986, p. 352; Mucchielli, 1998, p. 18). Building on firm or product innovation, for example throughout the successful implementation of technical change (Posner, 1961), Vernon (1971, p. 4) thereby somewhat reconsiders the individual strength and flexibility of MNEs that operate (more and more) actively in foreign markets. While his concept seems reviving at first, it can however be argued that both strength and flexibility are taken into consideration in earlier definitions by Kircher (1964, 8), who finds that transnational firms, among other characteristics, show a “diversity in products and fields of interest without 27 The structural approach presented follows a previously defined structure to promote the use of standardized terminology. Both previous approaches as well as adaptations applied are described hereinafter.

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sacrifice” (cf. Kircher, 1964, p. 8), or Kolde (1968, p. 12), who considers the adaptation to “real changes” and “the shift from foreign trade to international operations” as a part of his definition on the MNE (cf. Kolde, 1968, p. 12). While the paragraph above uncovers and explains market-seeking operations or production as a move for foreign activity-related risk reduction (Vernon, 1979; Teece, 1984, pp. 102–105), the definitions on the product cycle or diversification rather elucidate the decrease of organizational risk but do not yet clarify the investment in or acquisition of foreign resources or assets (Dunning and Lundan, 2008b, p. 86). Originating in research on the geographical diversification of investment portfolios (Grubel, 1968), Rugman (1975, pp. 571–573, 1976, 1977, 1979, 1980b) demonstrates that perceptibility of uncertainty and asset distribution serve as a function of investment location. Based on this understanding, Rugman (1988, pp. 3–7) therefore typologizes MNEs, among two others, as “diversified multiplant firms and conglomerates (which reduce risks)” (cf. Rugman, 1988, p. 7) with production and distribution or services in two or more countries. Au contraire, the investigation of MNEs by Michel and Shaked (1986) provides evidence that firms operating exclusively on the domestic level are less likely to file for insolvency. It thus does not surprise that their excerpt and definition of the MNE conditions foreign sales of at least 20 percent but above all the existence of direct capital investments in at least six countries outside the United States of America (Michel and Shaked, 1986, p. 92). The timing of foreign investments is consequently seen as a possible explanation and source for the variety in these results (UNCTAD, 2000), which leads other scholars, such as Kindleberger (1969, pp. 180–182), to include exchange rate-related risks in their definition of the international firm. The consideration of exchange rate-related risks as outlined serves as a suitable example on how organizational learning and experiences can possibly contribute to the gradual increase of a firm’s commitment towards foreign operations or markets. This is especially reflected within the concept of psychic distance in behavioral theorizing primarily related to Swedish MNEs (Johanson and Wiedersheim-Paul, 1975; Johanson and Vahlne, 1977, 1990), which relates to “factors preventing or disturbing firms learning about and understanding of a foreign environment” (cf. Vahlne and Nordström, 1992, p. 3) and, ultimately, forces MNEs and scholars alike to deal with a widening range of managerial components (Maisonrouge, 1974, p. 8; Hofstede, 1983, 1984b; Kogut, 1998, p. 153). As part of the Uppsala/internationalization model, these components are then subject to continuous extension (for example: Johanson and Vahlne, 2009; Figueira-de-Lemos et al., 2011; Vahlne et al., 2011; Vahlne and Johanson, 2013, 2017; Forsgren, 2016; Welch et al., 2016; Dow et al., 2018; Hult et al., 2020)

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and adaptation/testing (among others: Almodóvar and Rugman, 2015; Coviello et al., 2017) over time. Conclusively, it can be noticed that the excerpts’ authors and scholars very well display the ability to combine an individual scientific or theoretic contribution with their respective design of a definition. This observation underscores that each could thus be granted a rather distinct stake in the development of more general explanations for the foreign activities of organizational entities, such as internalization theory (Buckley and Casson, 1976, 1985; Hennart, 1982; Safarian, 2003) or eclectic paradigm28 (Dunning, 1988a, 1993, 2001). Concerning the background and descent, it can be argued that the excerpts which are drawn from the literature mainly stem from English-, French- or German-speaking authors.29 Only few authors, like French Byé (1957, 1958) or Canadian Hymer (1960, 1968), contribute to the excerpts in both English- but also French-speaking formats or outlets and thus on a bilingual level. In Byé’s case, it is also apparent that his expressions on multiterritorial units are somewhat generally neglected by economists (Dunning, 2002, p. 252), with scholars crediting and preferably referring to Lilienthal (1960, p. 119) and the term multinational corporation (MNC) for firms that operate and live abroad (among others: Aharoni, 1971, pp. 27–28; Kobrin, 2005, p. 222; Sieber, 1966, p. 51). Whilst these findings may not emerge as the only overlap with specifics previously reviewed in related contexts (for example: Section 2.1.1), it can similarly be observed that the implemented use of different terminology could easily provoke changes in the unit of analysis as discussed beforehand (for example: Section 2.1.2). Byé (1958, p. 148), for instance, considers international, interterritorial or intersectional relations when discussing the facets that possibly call for a revision of theory. Not too long thereafter and representing the first excerpt originating from a German-speaking author, Sieber (1966, pp. 51–53) trailblazes a more critical point of view by underlining the vagueness of the terminology in use by researchers labeling organizational entities as both multinational but also international. Whereas it seems that his contribution is not of relevance to the wider international audience, Sieber (1966, pp. 52–56) paradoxically remains rather unspecific himself when defining 28 The eclectic paradigm is subject to continuous extension, specification as well as revision by members from the IB and IM community. For examples and details, see: Tallman (2004), Li et al. (2005), Dunning and Lundan (2008a), Buckley and Hashai (2009), Eden and Dai (2010), Narula (2010) and Rugman (2010b). 29 The individual heritage of the selected authors is not reviewed per se, which represents a possible limitation.

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a firm as international, if, among others, the “severity” of its business lies in more than one nation, and an enterprise as multinational, when, among others, a “significant influence” of foreign branch offices or subsidiaries can be determined (transl. and cf. Sieber, 1966, p. 55).30 While his remarks on the degree of multinationality are not sketched und published until later, (Sieber, 1970, pp. 417–420), Sieber’s early contribution (1966) can nevertheless be considered as pioneering while it represents the first conscious approach of a single author that takes into consideration different manifestations or kinds of international firms. In consequence, his contributions are thus heavily referred to within the German-speaking landscape of the international business and management discipline (among others: Meissner, 1972, p. 576; Dornis, 1971, p. 21; Müller, 1980, p. 96; Pausenberger, 1981, p. 3; Schmidt, 1981, p. 57; Macharzina and Engelhard, 1984, p. 13; Schmid, 1996, pp. 18–21; Kutschker and Schmid, 2011, pp. 244–246, p. 279). Though Clee and di Scipio (1959, pp. 88–89) early conclude that firms competing on the domestic and the foreign — in their case global — level may differ from one another, efforts and approaches remain rather pragmatic based on the constraints experienced, for example due the number of countries in which a firm has operations or subsidiaries (Vernon, 1971; Dunning, 1973; Hood and Young, 1979). Different kinds of international firms are thereby firstly assessed empirically by Bruck and Lees (1966, 1968), who, in an original approach, collect data and categorize firms based on the extent of their foreign operations.31 While using the foreign to total of sales, assets or employment (Bruck and Lees, 1966, p. 128, 1968, 13–21), it does not yet surprise that their data and approach are subject to continuous consultation and extension throughout the research field over time (among others: Buckley et al., 1978, p. 254; Rolfe, 1970, p. 6; Rugman, 1976, p. 76, 1979, pp. 13–15, 1980a, p. 24, 1980d, p. 32, p. 42, 1981, pp. 125–126; Nguyen and Cosset, 1995, p. 344; 30 For an international firm (“internationale Unternehmung”, transl. from German), the author cited additionally considers that a firm’s equity is spread on an international basis and representatives from foreign subsidiaries or other countries are part of the management task force. For a multinational enterprise (“multinationale Unternehmung”, transl. from German), the author cited additionally considers foreign direct investment, subsidiaries, branch offices, production or value-adding functions and decentralization or risk exposure. The author cited then defines a world corporation (“Weltunternehmung”, transl. from German) as an organizational entity that is principally spread across the entire Western world and obtains a relatively high or strong share in its respective competitive market. For all details, see Sieber (1966, p. 55). 31 An initial review and discussion of foreign sales, investments and earnings is previously provided by Stern (1965).

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Buckley et al., 2010, pp. 245–255). Among others (for example: United Nations, 1973, 1978; Rugman and Verbeke, 2004a), their contribution can thus be regarded as way paving especially for the empirical-lead debate on whether firms are, first of all, domestic, international or multinational, and, later on, regional or global. Regarding the scientific integration and origin, various findings emerge from the analysis and discussion of the excerpts that, as exemplified, do not yet concern regional and global MNEs only. Firstly, the excerpts consequently emphasize the ability of the respected authors to merge both a different perspective on theorizing as well as firm characterization. Therefore, the respected contributions and the research stream can be considered to take substantial part in the development of general explanations within the discipline but, moreover, outline that the definitions serve as a reproduction of overall tenors and fundamental orientations. Secondly, the excerpts show that the background and descent of the respected authors is rich of facets. This can especially be highlighted based on the similar kind of thinking and progress that can be attested throughout the English-, French- or Germany-speaking literature. It is also shown, however, that aspirations regarding transfer or full state of equilibrium cannot be met in all directions of exchange (for example: Sieber, 1966). Thirdly, conservative approaches towards the creation and systematization of measurement are part of the debate from the very early days. It is therefore important that the alternatives connected with this path are followed upon and strengthened throughout further sophistication. Conclusively, the findings from this subsection result in the need of a structural and more detailed investigation regarding the content drawn from the literature. The following analysis and discussion of both terminological bias and dichotomy and the specification of manifestations thereby nurtures from the sample of excerpts and uses a standardized structure to handle diversity in both concepts and contents. By this means, the subsections hereinafter serve to provide further examination on the determining characteristics of the terminology applied, outline possible overlap and indicate differences in manifestations, such as regarding regional and global MNEs.

2.3.2.2 Terminological Bias and Dichotomy Some scholars in the international business and management literature apply or claim that the general use of key terminology for organizational entities, such as firm, corporation or enterprise (Wilkins, 1977, p. 577; Bartlett and Ghoshal, 1989; Dunning, 1993, p. 1; Annavarjula and Beldona, 2000, p. 48; Wilkins, 2009, p. 5), and their related dimensions, such as transnational, multinational or

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global (Dunning, 1971, p. 16; Wilkins, 1977, p. 577; Hochmuth, 1978, p. 169; Dunning, 1981, p. 18; Raghunathan and Chandran, 1990, p. 1; Dunning, 1993, p. 11; Dunning and Lundan, 2008b, p. 765), is interchangeably or synonymously possible.32 A wide range of input including the excerpts from the literature and other sources, such as encyclopedia, is therefore considered for clarification when the different manifestations existing for organizational entities with foreign business activity are analyzed and discussed throughout the following subsection and paragraphs. Research on the organization and its entities is manifold with possible streams focusing on an administrative (Simon, 1947; Thompson, 1967), functional (Barnard, 1938; Gutenberg, 1965, pp. 233–234), configurational (Blau, 1955; Schnutenhaus, 1951, p. 20; Kosiol, 1962, p. 20; Pugh et al., 1969) or institutional perspective (March and Simon, 1958; Lawrence and Lorsch, 1967). While the latter are often applied when scholars from international business and management progress towards an examination of firm- or business-oriented contexts (Meyer and Rowan, 1977; Fligstein, 1990; Dobbin, 1994; Scott and Meyer, 1994; Kostova and Roth, 2002), the research objects under investigation usually refer to some kind of firm, business, enterprise or corporation. Thereby, the terms firm and business interchangeably apply to an organizational entity that follows a specific purpose based on actions with the enterprise representing an increased level of complexity in the operation and execution of such (Gilman, 1989, p. 446; Chandler and Hikino, 1990, p. 15). Hence, the term enterprise may be associated with a more extensive and multifaceted set of organizational attributes or characteristics when including more than just a sum of operating units (United Nations, 1973, p. 4). Besides and important for further differentiation of such, the term corporation is circumscribed due to it lexically referring to “a body formed and authorized by law […]” (Gilman, 1989, p. 446, cf. Merriam-Webster, 2018). Therefore, all corporations are enterprises, whereas not all enterprises are necessarily at the same time corporations. In other words, the term enterprise generally refers to a wider range of research objects (Eden, 1991, p. 219), which is an essential detail when using data from different national environments that presumably enforce an individual legislation each. In line with respective contributions from the historical origins of the regional and global debate (for example: Rugman, 1981, 32 Whilst the term company in American English can include partnerships, it does not form a separate legal entity in British English. Thus, the origin for the use of different terminology is at least twofold with the mode of expression underlying a specific geographic region or the defective use of terminology representing possible examples each. The latter is investigated as follows whereas the term company is excluded from the procedure as hereby presented.

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p. 10, 2006, p. 10), the enterprise is consequently the theoretically appropriate term to apply for this research.33 The activities of organizational entities are often connected with the coordination, monitoring or allocation of facilities and personnel or a combination of both kinds of resources (Chandler and Hikino, 1990, p. 15; Ocasio, 1997, p. 192; Petersen and Welch, 2002, p. 158). While domestic and national thereby synonymously apply to actions within the borders of a sovereign state or nation, the descriptions associated with the activities outside the home state or nation can vary harshly (United Nations, 1973, p. 4; Wilkins, 2009, p. 5). Respectively, many years of debate exist on organizational entities in an international (Coase, 1937; Hymer, 1960; Dunning, 1980), cosmo- and world corporative (Clee and di Scipio, 1959, pp. 85–89; Sieber, 1966, p. 55; Ball, 1967, p. 29; Aharoni, 1971, pp. 35–36), multinational (Perlmutter, 1965, 1969; United Nations, 1973, pp. 4–5; Roth and Kostova, 2003; Aharoni, 1971; Aggarwal et al., 2011), supranational (Robinson, 1967, pp. 151–161; Hederer et al., 1970, pp. 512–516), a-national (United Nations, 1973, p. 5), conational (Hochmuth, 1978), plurinational (Perridon and Rössler, 1980a, p. 211), multilocal/-focal (Agthe, 1982; Doz, 1986), (neo-) global (Levitt, 1983, p. 92; Perriard, 1995, p. 3; Doremus et al., 1999; Birkinshaw, 2001; Engelhard and Hein, 2001; Deans et al., 2003; Yip, 2003, p. 8; Mees-Buss et al., 2019, pp. 1532–1534), transnational (Bartlett and Ghoshal, 1989; Pitelis and Sugden, 2006), regional multinational (Rugman and Verbeke, 1990; Roth and Kostova, 2003; Rugman and Verbeke, 2004a, 2008b), multiregional (van den Bulcke, 1995, p. 56; Jones, 2005b, p. 82), metanational (Doz et al., 1997; Doz et al., 2001), multidomestic (Harzing, 1999), micromultinational, (Dimitratos et al., 2003; Vanninen et al., 2017), transregional (Berrill, 2015, p. 94) or minoritynational (sub-) dimension (Mullen and Berrill, 2015). Thereby, each of these (sub-) dimensions stated possibly refers to a different kind of organizational entity with foreign business activity.34 The (sub-) dimensions stated in the above very well display the continuous creation and dynamic expansion of terminology in general and over time, but their introduction also results in an increase of complexity for the manageability 33 Due to its manifestation in the present field and line of research, the term international firm is also applied hereinafter. Furthermore and as exemplified by the United Nations (1973, p. 4) regarding the usage of the terms enterprise and corporation, this procedure, unfortunately, represents common practice in the field. 34 A sorting or final clarification of each of the above could be considered an individual research project and is, thus, not part of the research presented in this work. This possibly limits the scope of the analysis and discussions provided hereinafter.

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of underlying research and, from a critical perspective, raises questioning regarding the efficiency of the continuum itself. To emphasize these points, dissimilarities and overlaps regarding the terminological characteristics are analyzed and discussed as follows based on an adaptation of the approach for a systematization of variety as carried out by the United Nations (1973). The adaptations applied in the present research, firstly, stem from the fact that the contribution by the United Nations (1973), which represents one of the few that marks to distinguish from others by early targeting the consistent application of terminology, acknowledges that the terms international and transnational are likewise preferred as dimensions representing a firm’s foreign activity (United Nations, 1973, p. 5). The first adaption, the integration of the dimensions international and transnational as part of the analysis, thus serves to counteract to the finding whereas both of the dimensions are yet not considered for further delineation and interpretation as part of the original approach.35 Secondly, it can be observed that some scholars coincide in their publications when providing extraordinary or ideal characteristics relating to an absolute or maximal foreignness of firm business activity (for example: Clee and di Scipio, 1959, pp. 88–89; Ball, 1967, p. 29; Levitt, 1983, p. 92). As these contributions are often neglected throughout the course of debate on terminology, the second adaption facilitates the integration of these contributions based on the consideration of definitions referring to a global dimension. Thirdly, a last and slight adjustment concerns definitions that cannot be regarded as contributing specifically to one of the four dimensions previously stated (for example: Dunning, 1971, p. 16; Hochmuth, 1978, p. 176; Dimitratos et al., 2003, p. 165; Mullen and Berrill, 2015, p. 302). The original approach is thus furthermore supplemented by terminology that refers to other dimensions, which mainly reflects the opportunity to include these few but special and debate-worthy contributions. Conclusively, the execution of the analysis that is performed in the present work focuses on four manifestations, namely the international, transnational,

35 The United Nations outline that “some authors emphasize the fact that, despite the growing

importance of foreign activities, many corporations are basically home-country oriented concerns that operate abroad, and prefer the terms ‘international’ or ‘transnational’” (cf. United Nations, 1973, p. 5). However, Dunning (1993, p. 11) retrospectively finds that the popularity of the term transnational stems from the United Nations Centre on Transnational Corporations (UNCTC) adopting the requests of some countries for further differentiation of investments.

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multinational and global dimension.36 While these dimensions are thus complemented by other noteworthy definitions, two crucial findings, the overlap of corresponding characteristics across different dimensions as well as the existence of dissimilarities among the dimensions themselves, emerge from a review and analysis the excerpts drawn for the literature. Both findings substantially constitute the terminological bias and dichotomy and find exemplification hereinafter. “An international company [...] [is; author’s note] a large corporation which has a substantial overseas investment in operating subsidiaries or affiliates – sometimes including licensees. A sizeable export volume out of total sales would not indicate that a company was ‘international’. Nor does size make a company ‘international’.” (cf. Behrman, 1969, p. 2) “In idealized form these [transnational; author’s note] enterprises would be owned by stockholders in many countries; manned and managed by persons of many nationalities; operated in all of the world politically open to them; run by managers trained and experienced in looking on the world as an economic unit; diversified in products and fields of interest without sacrifice of those unifying principles and interests which tie them together as unique organizations.” (cf. Kircher, 1964, 8) “A multinational company is any firm which performs its main operations, either manufacture or the provision of service, in at least two countries.” (cf. Brooke and Remmers, 1970, p. 6) “The global corporation operates with resolute constancy - at low relative cost - as if the entire world (or major regions of it) were a single entity; it sells the same things in the same way everywhere.” (cf. Levitt, 1983, p. 92)

The review and analysis of excerpts suggest that the delineation of the different dimensions corresponds with the application of identical characteristics. The foreign market involvement of the international dimension, for instance, thereby spans from business relationships in general (Lovelock and Yip, 1996, p. 65) and domestic production (Perriard, 1995, p. 3) over a relative or substantial share in 36 Some terms, though listed in the previous paragraph, are not at all or further outlined by the respective authors and scholars (for example: Perridon and Rössler, 1980a, p. 211). These contributions do not provide the details required for an analysis of terminology and can consequently not be fully considered hereinafter.

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export volume (Behrman, 1969, p. 2) to the existence of foreign branches, production or subsidiaries (Sieber, 1966, p. 54; Bruck and Lees, 1968, 14; Dornis, 1971, p. 21; Grünärml, 1975, p. 242). The involvement in foreign affiliates or subsidiaries as characterized is thus and firstly identical with the composition of both the transnational (Lecraw, 1983, p. 15; UNCTAD, 1995, p. 383) and the multinational dimensions (among many others, for example: Rugman et al., 1985, p. 10; Benvignati, 1987, p. 449). Secondly, the parent-subsidiary relationship finds consideration in all contexts, international (Kindleberger, 1969, p. 180), transnational (UNCTAD, 1995, p. 383), multinational (Curhan et al., 1977, p. 11) as well as global (Ball, 1967, p. 29). Thereby, authors across dimensions often remain vague on whether the subsidiaries are fully or partially owned by their respective parents. While the linkage is much discussed (for example: Phatak, 1983, p. 4; Heininger, 1986, p. 352; Curhan et al., 1977, p. 11), it is worthwhile to take note of the unusual perspective offered by Ball (1967, p. 29), who finds that the subsidiary serves as a factor of influence resulting in a denationalization of the parent and not merely vice versa. This, in ultimate comparison with Kindleberger’s (1969, p. 182) contribution on home orientation, leads to the identification of another overlap, which, thirdly, stems from differences in behavioral or managerial characteristics. Fourthly, it can furthermore be noted that Hymer (1960, p. 27), Fischer (1968, p. 18) or Glaum (1996, p. 10) include political-, legal-, tax- and currency-related contexts in their respective definitions of the international dimension. Based on the consideration of governmental factors, such as the decentralization of power or the diversification of stocks, equity and profit, the diversification of contexts is concordantly considered for the definition of the transnational (for example: Kircher, 1964, 8; Heininger, 1986, p. 352; Hochmuth, 1978, p. 176) or the multinational dimension (for example: Giscard d’Estaing, 1966, p. 67; Behrman, 1969, p. 2; Maisonrouge, 1974, p. 8; Prahalad, 1975, p. 1). The review and analysis of excerpts furthermore suggest that dissimilarities exist within the dimensions themselves, which is hereinafter demonstrated based on the individual sets of characteristics drawn from the literature on the multinational dimension. Firstly, it can be observed that the excerpts’ authors connect a multinational dimension with a quantitative measure, such as a minimum count for the number of countries or the proportion of a financial key figure respectively. For the number of countries this typically includes precise guidelines, such as “at least two” (cf. Brooke and Remmers, 1970, p. 5; United Nations, 1978, p. 158) and “six or more countries” (cf. Vernon, 1971, p. 11), but also less specific characterizations, such as “abroad” (cf. Byé, 1958, p. 148; Lilienthal, 1960, p. 119) and “in many countries at different levels of economic development” (cf. Maisonrouge, 1974, p. 8). A similar observation is equally

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met for financial key figures associated with a firm’s foreign business activity, which range from considerable volume of exports (Macharzina and Engelhard, 1984, p. 29) over a concentration of manufacturing or the provision of services (Brooke and Remmers, 1970, p. 5) to at least 25 or 50 percent of sales, assets, production or employment (Bruck and Lees, 1966, p. 128, 1968, 14; Rolfe, 1970, p. 6; United Nations, 1973, p. 5). Thereby, the latter examples already provide ground for another dissimilarity, whereas, secondly, the relevant authors are not in consensus on the types of activities to be considered (or not). Thirdly, the characterization of the multinational dimension is further outlined based on the location of resources, such as assets, facilities, subsidiaries or employees, and functions respectively. In the underlying case, MNEs are often defined as entities that own or control income-generating assets (Dunning, 1974, p. 15; Benvignati, 1987, p. 449) or, alternatively, experience diversification regarding financial functions, such as raising capital or its equity trading on international markets (Maisonrouge, 1974, p. 8; Annavarjula and Beldona, 2000, p. 49). Fourthly, it can be argued that organizational structure or managerial and behavioral attitudes constitute the multinational dimension. Thereby, MNEs are generally characterized based on the organizational structure or corporate strategy as implemented as well as other behavioral or managerial attitudes in place (among many others, for example: Drucker, 1969, pp. 91–101; Aharoni, 1971, p. 33; Maisonrouge, 1974, p. 8; Welge, 1980, p. 7).37 While many more cases could be drawn from the excerpts, the preceding review and analysis on foreign market involvement, parent-subsidiary linkages, measures considered, coverage of operations or functions involved underline that the definition of the dimensions may yet appear occasionally confusing and permanently unprecise (Vernon, 1972, p. 8). The overlap of corresponding characteristics across different dimensions as well as the existence of dissimilarities among the dimensions themselves thus provides a rather promiscuous picture based on the different criteria in use for dimensional operationalization. Some authors therefore approach the dimensions based on delineating such from the national or domestic context (Borrmann, 1970, p. 20; Sieber, 1970, p. 418; Müller, 1980, p. 96; Dunning, 1981, p. 7; Heinen, 1982, p. 11; Schmid, 2000, pp. 13–15; Richter, 2010, pp. 27–30), but, in retrospective, cannot provide ultimate progress either. For this reason, it is therefore argued in the literature that efforts connected with the definition of different manifestations or dimensions should be adjusted while rather focusing on the search for an 37 See Drucker (1969, pp. 91–101), who, for example, addresses management structure and thinking in terms of nationality.

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agreeable classification and systematization (Aggarwal et al., 2011, p. 561). While it may be fruitful to empirically assess and underline the international firm or MNE and their equivalent dimensions as substantial parts of the research agenda, this recommendation does not yet address how the existing body of dimensions and definitions can be made manageable. Similarly, questioning quickly arises on the theoretic and practical advantageousness provided by various sets of classification systems and large amounts of empirical data, if classes or types are yet not defined and designed properly in advance. Conclusively and when focusing on progress for academic debate on regional and global MNEs, it remains further on “essential that research be careful in defining the types of corporations to which they are referring” (cf. Aharoni, 1971, p. 35). The terminological bias and dichotomy as addressed thereby exemplify the variety of definitions which can presumably be considered as the cause of a broadening discipline but also missing consensus. Throughout structurally approaching these previous contributions, the following subsection, which could be considered as a literature review, thus addresses and provides an alternative solution to generate progress on how the individual dimensions can be defined or separated from another but also serves to promote the use of standardized terminology in the underlying field of research.

2.3.2.3 Conceptual- and Content-related Diversity Previous research outlines that changing theoretical and analytical foundations can be regarded as possible sources for the existing variety in the field (Donaldson, 2001, p. 81; Wilkins, 2009, p. 23). As analyzed and discussed in the subsection before, the definitions associated with these foundations thereby refer to numerous dimensions. These dimensions are, however, subject to a terminological process, where characteristics are regularly singled out or used in various sets of individual combinations. In this subsection, the analysis and discussions of conceptual- and concept-related diversity addresses this finding while following a two-step approach. In a first step, the criteria applied in the concepts relating to the foreignness of firms and enterprises are reviewed. In doing so, predominant criteria are identified to generate a standardized structure. In a second step, the contents of the international, transnational, multinational and global dimensions are systematically examined based on the standardized structure developed beforehand. In this way, a standardized structure and a systematic analysis of excerpts serve as a foundation for the generation of consensus within the literature and provide an answer to both the increasing efforts associated with the manageability of contents debated as well as the reduction of complexity in its handling.

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In the international business and management literature, the study of definitions is often emphasized by scholars that perform reviews from a meta perspective (among others: Hochmuth, 1978; Roth and Kostova, 2003; Aggarwal et al., 2011) or contribute to the discourse from a distinct conceptional perspective (among others, for example: Aharoni, 1971; Grünärml, 1975; Perridon and Rössler, 1980a; Pausenberger, 1982; Raghunathan and Chandran, 1990; Annavarjula and Beldona, 2000, pp. 49–50; van den Berghe, 2003). Concerning the latter kind, Aharoni’s (1971) contribution is of pioneering kind and one if not the most popular work to be considered when approaching the systematization of characteristics associated with the multinational dimension of foreign business activity (Fischer, 2006, pp. 36–37; Richter, 2010, pp. 27–28; Dunning and Lundan, 2008b, p. 88; Aharoni and Brock, 2010, p. 10).Whereby his approach finds its foundation in the area of industrial organization and antitrust policies used by economists (Aharoni, 1971, p. 27), it is argued that three criteria, namely performance, structural and behavioral, can be used to catalogue or classify the characteristics used within definitions.38 While some authors follow the approach proposed by Aharoni (among others: Heenan and Perlmutter, 1979), comprehensive research needs to consider the conceptual-related diversity possibly existing within this line of research in its entirety. In a first step, the international business and management literature conceptually approaching definitions and characteristics is thus thoroughly analyzed and consolidated. While the findings are presented using Table 2.1, both dissimilarities and overlaps concerning this line of research are outlined and discussed hereinafter.39 At first sight, the review of this literature might thereby suggest that scholars use broadly similar criteria in the research dealing with conceptualization. Though the titles applied for the criteria across the contributions are somewhat subject to adaptation in the respective original research, the authors generally agree on the kinds of criteria that can be held accountable for characterization.40 Furthermore, it can be observed that the characteristics connected with these criteria, such as foreign sales or revenues, production volumes, equity or 38 See Aharoni (1971, p. 27), who uses the terms performance yardsticks, structural criterion and behavioral characteristics. 39 See Appendix 5: Terminological- and Content-Related Analysis of Excerpts for more details. 40 For further details on this statement, see Fischer (2006, pp. 41–45), who points out that different titles for criteria eventually refer to the same group or kind of criteria within this line of research.

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management attitude, find implementation across different contributions, which leads to presume that these works provide a promising basis for future research. In its detail, Table 2.1, however, shows that the contents vary harshly concerning their individual setup. Firstly, six contributions consider foreign assets or investments a performance characteristic, whilst one author, Pausenberger (1982), regards such as structural characteristic. Secondly, only Aggarwal et al. (2011), who analyze variables applied for the operationalization of MNEs, consider foreign branches or subsidiaries a performance characteristic, while three other contributions, namely Aharoni (1971), Grünärml (1975) and Perridon and Rössler (1980a), outline such to be of structural kind. Supposedly, this finding can be considered a late result of the operationalization of foreign business activity, whereas subsidiary counts are used for measurement and their existence is regarded as an interpretation of its organizational structure in the earlier days of the field. Thirdly, it can be pointed out that three contributions consider foreign employees a performance characteristic, whereas two approaches implement such as a structural characteristic. Similarly, international leadership is considered as both a structural and a behavioral characteristic alike in the contributions available. For either case, foreign employees and international leadership, it can be observed that the setup is subject to the authors’ individual interpretations, which also fall in line with the contents of their respective definitions. Additional questioning concerning these contributions may stem from the input that scholars are considering when working on the definition of a distinct dimension. Both Aharoni (1971, p. 30) and van den Berghe (2003, p. 127), for example, use excerpts on the international firm as part of their way to define a multinational dimension (Aharoni, 1971, p. 30; van den Berghe, 2003, p. 127). This is paradoxical as the authors of this literature still use this setup to conclude “that there are several kinds of so-called multinational companies” (cf. Aharoni, 1971, p. 35). Lastly, it can be determined that previous research, which, for example, builds on 18 and 19 definitions respectively (Raghunathan and Chandran, 1990, pp. 30–32; van den Berghe, 2003, p. 127), could be enriched by taking a larger number of excerpts into account for analysis.

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Table 2.1 Overview of the literature conceptualizing definitions and characteristics.41

Source: Own illustration.

As outlined, first findings from the review of existing approaches explicate the need to create a standardized structure for the successful execution of an analysis on the international, transnational, multinational and global dimension. The structural approach developed for use in this work is thus presented using Table 2.2 and finds justification where needed as follows.

41 On the basis of Aharoni (1971), Grünärml (1975), Perridon and Rössler (1980a), Pausenberger (1982), Raghunathan and Chandran (1990), Annavarjula and Beldona (2000), van den Berghe (2003) and Aggarwal et al. (2011). Also, adapted on the basis of Fischer (2006, pp. 39–40), who analyzes some of these works from a different perspective and methodology.

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Table 2.2 Standardized structure of criteria and characteristics as applied. Performance

Structural

Behavioral

Foreign operations Foreign sales Foreign assets or investments Foreign production or value chain Foreign services Foreign joint ventures Subsidiaries Foreign income or earnings International transactions Mergers and acquisitions

Foreign employees Foreign (legislative) exposure Foreign exchange listing Industry details Foreign equity Foreign taxation Global accounts

Research and development International marketing World mandate or global strategy Patents Unclear or not stated

Source: Own illustration.

Whilst performance criteria can be identified based on absolute and relative measures (Aharoni, 1971, p. 31), the analysis of excerpts suggests that the term operations often refers to business activities in terms of sales or revenues, assets or investments, production or value chain functions and services (among others, for example: Bruck and Lees, 1968, 14; Aharoni, 1971, p. 31; Rugman, 1981, p. 30). Foreign operations are therefore considered a performance but not a structural characteristic in this research due to the term’s content and superiority in relation to other characteristics. Based on the empirical focus to follow in the present work and the operational research conducted in this line of research (for an overview, see: Aggarwal et al., 2011, p. 560), foreign sales or revenues, assets or investments and subsidiaries, which include branches, are likewise considered performance but not structural characteristics. Whilst many contributions approaching the conceptualization of definitions agree on the structural characteristics identified, such as foreign legislative exposure, exchange listing, equity and taxation, scholars’ understanding somewhat differs on whether foreign employees are of performance or structural kind. Though traditional research, such as outlined by Aharoni (1971), Grünärml (1975) and Raghunathan and Chandran (1990), considers foreign employees a performance characteristic, the approach herewith presented regards foreign employees as a particular representation of the constitutional part of an organization and, thus, of structural kind. This standpoint also falls in line with some of the late research on MNE classification (Aggarwal et al., 2011, p. 560). Lastly, behavioral characteristics, such as research and development (R&D), patents and world mandates or global strategy, are complemented by international marketing.

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The latter term thereby includes all context-specific factors, such as connected with different leadership styles, managerial attitudes, the degree of management autonomy and product- or marketing-related adaptations. In a second step, the standardized structure as developed beforehand is now applied for the analysis of definitions drawn from the literature with the excerpts. In the underlying case, the application refers to more than 100 excerpts and focuses on the examination of the content-related diversity within such. While this process also highlights the multidimensionality of foreign business activity, it especially serves to generate insight and consensus on the definition and characteristics of the international, transnational, multinational and global dimension. While Figure 2.3 and Table 2.3 picture the results from the connection between characteristics and dimensions on a high-level as well as from a more detailed standpoint respectively, the findings and implications identified within the analysis are addressed and discussed as follows. The high-level and detailed results that are delivered from the assessment of performance, structural and behavioral criteria in connection with the individual dimensions reveal three major theoretical implications. Firstly, Figure 2.3 shows that 75.6 and 67.7 percent of the characteristics associated with the international and multinational dimension relate to the performance criterion. With more than two thirds respectively, the high share thus separates the international and multinational from the other two dimensions that experience a substantially lower performance characteristics proportion. The results therefore implicate a certain similarity amongst the international and multinational dimension, whilst a clear distinction can be observed based on the respective composition of performance characteristics and the discrepancy provided in the stake of structural and behavioral criteria. Both implications can be addressed when considering the detailed results available from Table 2.3, which are of support for further dimension specification and separation. Focusing on the different criteria, the results from the analysis of excerpts indicate that both international and multinational dimension derive the dominant performance proportion, among others, especially from characteristics such as foreign sales or revenues and assets or investments. The international dimension, however, is also described using foreign income or earnings and international transactions, while the multinational dimension sees higher affection towards foreign production or value chain. For the structural criterion, the results from the analysis of excerpts indicate that the differences in stakes stem from a higher number of excerpts using foreign employees when referring to the international dimension as well as the preferred association of foreign legislative exposure and equity with the multinational dimension. For the behavioral criterion, the results

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from the analysis of excerpts indicate that characteristics such as research and development, international marketing and world mandates or global strategy are hardly factored in for the international but find steady consideration as part of the multinational dimension.

Figure 2.3 High-level results from the systematization and analysis of excerpts.42 Source: Own illustration.

The comparison of performance, structural and behavioral criteria and their discussion consequently implicate that the international dimension is more performance- and structural-oriented and less behavioral-driven than the multinational dimension on the high level. The detailed results, in contrast, implicate that the multinational dimension is often connected with a wider range of facets over all criteria, which demonstrates the superior level of complexity and handling expertise when dealing with the multinational dimension as a research object.

42 See Appendix 5: Terminological- and Content-Related Analysis of Excerpts for the full details of this analysis.

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Secondly, the high-level results from the analysis of excerpts indicate that the transnational dimension is more balanced in its outline of characteristics than the international, multinational or global dimension. With individual stakes of 57.6 percent for performance, 27.3 percent for structural and 15.2 percent for behavioral characteristics, the results furthermore indicate that the transnational dimension has the highest proportion of structural characteristics (Figure 2.3). Focusing on the performance criterion, the detailed results indicate that the excerpts on the transnational dimension also refers to foreign joint ventures and subsidiaries as considerable characteristics. More specifically, the intra-criterion comparison of these characteristics reveals that none of the other dimensions experience such a strong affection towards foreign joint ventures and subsidiaries (Table 2.3), which, especially in comparison to the multinational dimension, is yet surprising. Focusing on structural and behavioral criteria, the high-level and detailed results furthermore indicate that the transnational dimension could be identified as a mixture of the international and multinational but also the global dimension. With respect to the composition of the structural criterion, the transnational dimension thereby shares stakes comparable to the international or the multinational dimension for foreign employees, (legislative) exposure or equity. Concerning the behavioral criterion, the 15.2 percent and 16.4 percent stake for the transnational and multinational dimensions further show that the dispersion associated with the two dimensions is in fact strongly similar on the higher level (Figure 2.3). The detailed results, however, do not provide a clearer picture (Table 2.3). The comparison of performance, structural and behavioral criteria and their discussion shows that the transnational dimension represents somewhat of a mixture of characteristics proven by other dimensions. The results from the analysis of excerpts thus implicate that the transnational dimension can be associated rather as a product of practitioners and populism than theoretic concretization and delineation (for details, see: Dunning, 1993, p. 11). Thirdly, the results from the analysis of excerpts indicate that the global dimension, which refers to stakes of 43.5 percent for performance, 8.7 percent for structural and 47.8 percent for behavioral characteristics respectively (Figure 2.3), is not dominated by any of the three criteria considered. If compared to the other three dimensions, the global dimension is thereby subject to the lowest stake of performance characteristics while it experiences by far the highest proportion of behavioral characteristics. In addition to this high-level, the detailed results and the intra-criterion comparison also confirm that the global dimension represents a rather special case with characteristics very differently composed in contrast to other dimensions (Table 2.3). For the performance

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criterion, the results from the analysis of excerpts thereby indicate that authors prefer to broadly refer to foreign operations than to any other characteristics. Concerning the behavioral criterion, the results from the analysis of excerpts further indicate that international marketing and world mandates or global strategy, which account for 17.4 and 21.7 percent of the dimension respectively, are the most important characteristics for the global dimension. This contrasts Table 2.3 Detailed results from the systematization and analysis of excerpts.43 International

Transnational

Multinational

Global

Foreign operations

16.9%

12.8%

21.1%

12.1%

23.4%

15.9%

40.0%

17.4%

Foreign sales Foreign assets or investments

16.9%

12.8%

10.5%

6.1%

14.8%

10.1%

20.0%

8.7%

22.0%

16.7%

15.8%

9.1%

23.4%

15.9%

10.0%

4.3%

Foreign production or value chain Foreign services

15.3%

11.5%

15.8%

9.1%

19.5%

13.2%

20.0%

8.7%

1.7%

1.3%

0.0%

0.0%

2.3%

1.6%

0.0%

0.0%

3.4%

2.6%

10.5%

6.1%

0.8%

0.5%

0.0%

0.0%

10.2%

7.7%

15.8%

9.1%

10.2%

6.9%

10.0%

4.3%

10.2%

7.7%

0.0%

0.0%

4.7%

3.2%

0.0%

0.0%

3.4%

2.6%

5.3%

3.0%

0.8%

0.5%

0.0%

0.0%

0.0%

0.0%

5.3%

3.0%

0.0%

0.0%

0.0%

0.0%

100.0%

75.6%

100.0%

57.6%

100.0%

67.7%

100.0%

43.5%

46.7%

9.0%

33.3%

9.1%

23.3%

3.7%

0.0%

0.0%

33.3%

6.4%

22.2%

6.1%

43.3%

6.9%

10.0%

4.3%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

3.3%

0.5%

0.0%

0.0%

20.0%

3.8%

33.3%

9.1%

30.0%

4.8%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

11.1%

3.0%

0.0%

0.0%

10.0%

4.3%

100.0%

19.2%

100.0%

27.3%

100.0%

15.9%

20.0%

8.7%

Performance

Foreign joint ventures Subsidiaries Foreign income or earnings International transactions M ergers and acquisitions

Structural Foreign employees Foreign (legislative) exposure Foreign exchange listing Industry details Foreign equity Foreign taxation Global accounts

Behavioral 0.0%

0.0%

0.0%

0.0%

9.7%

1.6%

9.1%

4.3%

25.0%

1.3%

60.0%

9.1%

41.9%

6.9%

36.4%

17.4%

World mandate or global strategy Patents

25.0%

1.3%

20.0%

3.0%

22.6%

3.7%

45.5%

21.7%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

Unclear or not stated

50.0%

2.6%

20.0%

3.0%

25.8%

4.2%

9.1%

4.3%

5.1%

100.0%

15.2%

100.0%

16.4%

100.0%

47.8%

R&D International marketing

100.0%

100.0%

100.0%

100.0%

100.0%

Source: Own illustration. 43 See Appendix 5: Terminological- and Content-Related Analysis of Excerpts for the full details of this analysis. Errors in aggregation may occur due to rounding.

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with the results from the multinational dimension, where these characteristics account for only 6.9 and 3.7 percent each.44 The comparison of performance, structural and behavioral criteria and their discussion consequently implicate that the outline of characteristics on the global dimension appeals less advocated and elaborated but especially in contrast to the international or multinational dimension. The differences in criteria and characteristics furthermore highlight the uniqueness of the multinational and global dimension and permits to conclude that (regional and global) MNEs are separable from global firms with each representing specific (sub-) dimensions. Conclusively, this subsection follows an alternative path to create insight and consensus for the underlying line of research. Based on the application of a standardized approach, the excerpts and their analysis contribute to the debate by drawing up dissimilarities between and overlaps for the respective dimensions. Whereas the results on the transnational dimension may be less pathbreaking, the two-step approach presented consequently shows that the international, multinational and global dimensions can be separated from each other. To locate and illustrate these findings and whilst focusing on the generation of further understanding of consensus, the following appraisal and evaluation thus deals with the implications arising and the questions ahead for operationalization and measurement within this line of research.

2.3.3

Critical (Re-) Appraisal and Evaluation

Taking into account the findings from the analysis and discussion of each scientific integration and origin, terminological bias and dichotomy as well as conceptual- and content-related diversity, the previous section provides specifics as well as consensus on the field’s coverage and regarding the implementation of the international, transnational, multinational and global dimension.45 Whereas reasoning for the content-related diversity connected with the dimensions is due to remain manifold, the paragraphs hereinafter serve to harmonize the implications that can be drawn from the respective results while establishing further guidance on the terminology at hand. In connection with the introduction from Chapter 1 (esp. Subchapter 1.1), dissimilarities and overlaps are thus 44 In relation to the focus of the present work, it is most reasonable to provide a comparison with the multinational but not the international or transnational dimension. 45 The transnational dimension is listed for reasons of completeness only. As indicative results cannot be determined based on the results in the previous, the contents as outlined focus on the international, multinational and global dimension.

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addressed to lay ground and derive awareness for the terminological usage of terms such as international firms, multinational enterprises, global firms or world corporations and, moreover, regional and global MNEs as subdimensions. Considering firm business activity, it can be established based on field and debate that inter means across borders while the characteristics do not yet provide implications for a specific number of countries involved. The literature thereby often connects international firms with operations in more than one country (Buckley and Casson, 1976, p. 1; Caves, 2007, p. 1; Dunning and Lundan, 2008b, p. 1). Thereby, the term (foreign) operations is held relatively vague when applied to customer location, revenue generation or asset holding. In contrast, the term business activity relates to operational, investing and/or financing processes alike and thus relates to a wider range of objects. (International firm) Business activity therefore also includes operations based on the location of customers or supply through direct or indirect exports and imports (for example, when products are being sold to customers in (another country) using intermediaries, such as (foreign) wholesalers, or when foreign value creating activities are of support to home country business activity; author’s note).46 International firms consequently cross national borders while having business activities in more countries than the home country only. Similarly, interregional firms cross regional borders while having business activities in more regions than the home region only.47 Based on multi meaning more than two48 , the previous paragraph’s thinking principle relating to international firms can be transferred to multinational enterprises, which therefore cross borders based on their business activities and, for reasons of indicating the complexity to this dimensions of foreignness and under consideration of the results from consensus provided in the previous subsection, possess and control foreign value creating activities in more than two countries. In other words, multinational enterprises have business activities in at least three countries. In contrast, theoretical and conceptual contributions often associate firm-specific competitive advantage and the integration of foreign-located business activity with an increase in complexity for organizational entities (for example: Doz, 1986; Dunning, 1988a). Previous efforts hence refer to multinationality as an enterprise’s expansion that relates to 46 Among

others, see Wiersema and Bowen (2011) for an in-bound perspective. Chapter 1, especially Section 1.1, for PTAs and RTAs that respectively coin this terminology. 48 See Cambridge University Press (2018) and Merriam-Webster (2018), who define the term multi (-lateral) as involving more than two groups or countries. 47 See

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separate orientations such as foreign market penetration, foreign production or value chain presence, foreign country or planning scope and the degree of diversity thereby experienced (among others: Rugman et al., 1985, p. 7; Sullivan, 1994a, p. 337; Thomas and Eden, 2004, pp. 92–94; Kirca, 2008, pp. 44–47; Hennart, 2011, pp. 136–137; Wiersema and Bowen, 2011, pp. 155–156; Matysiak et al., 2018, pp. 240–244), which illustrates that MNE research experiences severe debate amongst academics and is in fact a multidimensional construct. From the business activity perspective, the MNE-related increase of complexity thereby results in alternative solutions for operationalization and measurement, whereas scholars consider measures of size, such as sales, assets, subsidiaries and employees (Rugman, 1976, p. 76), that find additional simplification based on the implementation of relative stakes (among many others, for example: Rugman, 1981, 2005c, 2006). Whilst the inclusion of absent characteristics, such as shareholder locations, would not necessarily serve to fully display the complexity of the object under investigation, the processes as developed yet allow to control and manage the underlying objects of research. The implementation of MNE-related subdimensions, such as regional and global (in its most popular form: Rugman and Verbeke, 2004a; Rugman, 2005c; author’s note), thereby refers to the bias existing in the business activity of these firms. While considering the argumentation from the previous paragraph, it does yet seem opposing at first sight, but connecting the MNE with a bias thus also allows for a national or domestic MNE-related subdimension (Hejazi, 2007).49 Following this understanding, it can be argued that MNE subdimensions are in state of (theoretical) co-existence. When considering territorial aspects, the prior remarks regarding international firms and MNEs allow for the creation of dimension-based groups and subgroups. Following a bottom-up approach, possibilities for separation consequently insist for domestic (for example: local, regional, national), international (for example: international, multinational, global), interregional (for example: interregional, multiregional, global) and multinational (for example: domestic/national MNE, regional MNE, global MNE) dimensions and subdimensions respectively. This process yet implies that MNEs can be considered as a subdimension of international firms whereas regional and global MNEs represent subdimensions of the MNE. The consensus drawn can furthermore be considered for understanding and closing a research gap that 49 The terms national or domestic thereby refers to the bias the MNE experiences in its business

activity.

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exists regarding the differentiation for MNEs (in general, but also regional and global MNEs respectively; author’s note) from global firms (or world corporations). In line with the results from the characteristics as part of the previous subsection, multinational and global dimensions are thereby to be separated from another. Whereas behavioral but withal strategic characteristics cannot be operationalized and measured using available firm data, such as sales, assets, subsidiaries or employees.50 The operationalization and measurement of regional and global MNEs as subdimensions of the MNE can therefore be considered for assessment and possibly provide an indication on the foreignness of the respected actors’ business activity, which is not similarly possible for the global dimension as drawn from consensus. Whilst the previous sections and paragraphs show that the analysis of dimensions is clouded by controversy and variety of interpretation, the debate is not as static as one could presume thereupon. The definition of terminology is also subject to much self-reflection and critique (among others: Hochmuth, 1978; Hood and Young, 1979, pp. 2–5; Fieldhouse, 1986), which fosters the alignment focus that is somewhat handled and captioned in the present work. Whereas these approaches respectively provide a different kind of value for an advancement of MNE-related definitional processes, prior research does not clearly separate or compare multinational (sub-) dimensions from otherwise existing terminology under the consideration of (the foreignness of) business activity respectively in order to provide a clearer picture of debate. Therefore, previous contents do not answer the question how MNE-related subdimensions, such regional and global, can be defined or specified from each other based on their business activity. The realization of a differing approach thus results in the requirement to review and analyze the operationalization and measurement associated with MNEs as follows. The results from the analysis and discussions provided throughout the previous subsections are yet not free of limitations which are addressed hereinafter. Firstly, the selection of excerpts and structural approach developed differ from the conceptual or operational focus presented in prior research (for example: Raghunathan and Chandran, 1990; Aggarwal et al., 2011).51 As this work proceeds otherwise, the differences in approach and input increase the possibility for result variation in connection with findings and implications 50 For example, product diversity or adaptation cannot be operationalized and measured from the data stated. 51 Raghunathan and Chandran (1990, pp. 11–12) apply a different understanding to their sample of definitions, whereas Aggarwal et al. (2011, pp. 558–559) do not provide reasoning for their research focus on journal-based contributions only.

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previously offered. Whilst this does not limit the authenticity of the present or prior research, the lack of comparison to foregoing studies possibly reduces the value generated hereby. Secondly, the analytical setup in the third subsection focuses on three criteria, namely performance, structural and behavioral. The appropriateness and validity of the multidimensionality applied is not challenged and, hence, most likely not objective either. As there exist no formal process to verify the criteria and characteristics considered, the results presented consequently reflect solely a fraction of the picture that could be drawn for the definition of (sub-) dimensions if proceeded otherwise. Conclusively, the analysis and discussion provide structural insight on the definitions of different (sub-) dimensions in relation to the origins and terminological dichotomy of the international business and management literature. By all criticism that this approach may experience, it is noteworthy that the underlying process for the development of consensus and implications developed for the definition of regional and global MNEs yet promises to remain superior to the random listing of (heuristic, empirical or practical; author’s note) facts or facets. As reflected, the studies dealing with the differences in understanding provide no ultimate say to the definition of the MNE, neither does prior research consider the existence of a connection between subdimensions and dimensions respectively. This work thereby pictures a different path to draw basic consensus on characteristics while generating specification of the terminology applied. The continuum of the field thereby serves as foundation, the present work chooses to narrow down perspectives, whereas prior research, in search for a fundamental understanding or general paradigm to explain MNEs, in retrospect, rather broadened and extended the field than provided solution.52

2.4

Operationalization and Measurement Associated with Multinational Enterprises

The contents previously explicated regarding definitions and concepts reflect the wide-ranging backgrounds that exist from discourse-related terminology and semantics. Whereas this expertise factually represents evidence for scientific richness, it can be observed that many of the contributions discussed beforehand circumscribe or share details and characteristics for the same dimensions. 52 General support for the challenge outlined is also provided in a detailing contribution by Buckley and Casson (2003, p. 219, 2009, p. 1563) as well as by Buckley (2016c, pp. 74–76, 2016b, p. 892).

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Consequently, questioning remains how these dimensions, but especially MNEs in general and the business activities associated with the regional and global subdimensions, experience operationalization and measurement within this line of literature. Subchapter 2.4 therefore deals with international firm- and MNE-related typologies and classifications and follows the idea that these build further ground for the systematization of the dimensions’ definitions as well as their application. Underlying the assumption that further development and progress can thereby be achieved for the sophistication of dimensions, field- and debate-related typologies and classifications are reviewed for substantial characteristics and design to carve out priority and focus areas on regional and global MNEs as follows. To shed further light on the operationalization and measurement associated with regional and global MNEs, the following four sections of this subchapter thus provide a standardization dealing with the understanding regarding relevant terminology and foreign entry and operation modes (Section 2.4.1), a characterization of contexts and measures as executed alongside international firm-related heuristic and empirical typologies and classifications (Section 2.4.2), an analysis and discussion of the prior remarks on the operationalization and measurement regarding regional and global MNEs (Section 2.4.3) as well as an evaluation that builds ground and consensus for further review of literature and empirical examination within this line of research (Subsection 2.4.4).

2.4.1

Introduction to the Review on Operationalization and Measurement

As provided throughout the prior subchapter, the dimensions and characteristics yet exemplify the terminological bias and dichotomy but also the content-related diversity. Whilst operationalization and measurement represent alternatives to generate further insight on regional and global MNEs, the way forward is most likely subject to similar observations. While outlining these and to lay ground for the characterization of typologies and classifications in the following, foreign entry and operation modes and their respective terminology in relation to operationalization and measurement are reviewed as part of this introduction hereinafter. Whereas in the previous being also considered as substantial parts of definitions and concepts for international firms and MNEs alike, foreign entry and operation modes, moreover, represent a pivotal element in the composition of MNEs (Ietto-Gillies, 2010). The models thereby operationalize the foreign market involvement of firms using resource commitments or investment size in

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relation to firm-, industry- and nation-specific contexts (for example: Johanson and Vahlne, 1977; Cavusgil, 1980; Dunning and Lundan, 2008b, p. 216), whereas systematizations apply measures of control to differentiate between non- and foreign direct investment-related forms of engagement (Anderson and Gatignon, 1986; Hill et al., 1990).

Indirect export

Licensing and franchising

Direct export excl. foreign direct investment incl. foreign direct investment

Contract manufacturing Strategic alliance Subsidiaries Joint venture Mergers

Market

Cooperation

Hierarchy

Figure 2.4 Overview and systematization of foreign entry and operating modes. Source: Own illustration, on the basis of Zentes et al. (2010, pp. 217–221) and Berndt et al. (2016, p. 166).53

As outlined using Figure 2.4, foreign entry and operating modes can be differentiated in the continuum of market (for the execution of external trade activities; author’s note) and hierarchy (for the integration of business activities as part of internal firm structures; author’s note) (Zentes et al., 2010, pp. 218–220; Berndt et al., 2016, pp. 165–166).54 Exporting activities are by this means often considered as a starting point for firms growing into foreign business (Cavusgil and Zou, 1994; Leonidou, 1995) and find constitution amongst two alternatives, namely indirect and direct export. While indirect export relates to trade activities through merchants that organize and deliver the goods sold in foreign contexts, direct export refers to firms that conduct all of 53 See Andersen (1997), Kutschker and Schmid (2011, pp. 850–855) and Schramm-Klein (2012), who review and provide overviews and criteria systematizing research on foreign entry and operating modes. 54 See Kutschker and Schmid (2011, pp. 848–941), for reading on foreign entry and operation modes and other forms, such as exports throughout the use of foreign sales or representative branches, which include foreign direct investment, or minority interests in joint ventures or subsidiaries, where firms do not necessarily own full control of foreign engagement.

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these selling, general and administrative functions themselves and on a domestic basis (Rugman et al., 2006, pp. 6–7; Kutschker and Schmid, 2011, pp. 855–866). Foreign entry and operation modes are additionally reflected based on cooperative modes, such as licensing, franchising or contract manufacturing. For licensing, the licensor, a firm granting access to their brands, patents or technology, thereby agrees to contractually arrange with the licensee, a firm that provides royalties in exchange for the access or rights granted (Rugman et al., 2006, p. 42; Berndt et al., 2016, pp. 169–172). For franchising, the concept of licensing is equally transferred for the delivery of marketing and distribution concepts when a franchisee is permitted access to a franchisor’s proven set of procedures as well as brand and marketing strategy (Dunning and Lundan, 2008b, pp. 217–218; Kutschker and Schmid, 2011, pp. 875–878; Berndt et al., 2016, pp. 172–173). Another, third mode of cooperative foreign entry and operation that does not yet consider an inclusion of foreign direct investments is contract manufacturing. In this case, foreign manufacturers are locally contacted for the purposes of production. In comparison to licensing or franchising, the specifics of this foreign entry and operation mode lay with a principal that reassures the purchase of the volumes produced and their sales distribution respectively (Dunning and Lundan, 2008b, pp. 215–219; Kutschker and Schmid, 2011, pp. 881–882; Berndt et al., 2016, p. 172). Agreements for collaboration are also exercised for foreign entry and operation based on (international) strategic alliances and joint ventures, whereas these modes are yet more likely to impact firm hierarchy. Strategic alliances thereby relate to contractual arrangements between firms and their competition or up- and down-stream ties respectively. While remaining independent, firms engaging in alliances share control, distribution and management in specific areas of expertise for the benefit of the network created throughout the partnership implemented (Dunning and Lundan, 2008b, pp. 225–227; Kutschker and Schmid, 2011, pp. 897–899; Berndt et al., 2016, pp. 176–177). While strategic alliances are not necessarily involved in mutual foreign direct investment, joint ventures, however, refer to the setup of an intercorporate legal entity. The jointly held firm can thereby experience equally and unequally held ownership, whilst control55 and risk are agreed upon in a binding contract (Dunning and Lundan, 2008b, pp. 228–231; Kutschker and Schmid, 2011, pp. 887–891; Berndt et al., 2016, pp. 174–175). 55 See Jaussaud and Schaaper (2006), who analyze the mechanisms of control, such as share of capital, expatriation, training, participation or technology transfer, over subsidiaries in China by European and Japanese MNEs, for further reading.

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Foreign direct investments are per se included for foreign entry and operation modes such as (foreign) subsidiaries and acquisitions. Whereas subsidiaries cover strategic, functional or specialized (such as research and development-related) roles in firms, their ownerships range from majority interest to wholly owned affiliates. In the light of their creation, it is thereby to note that greenfield investments represent new establishments whereas brownfield investments refer to the acquisition of existing foreign entities (Zentes et al., 2010, pp. 245–247; Kutschker and Schmid, 2011, pp. 905–908). In contrast, mergers reflect the process where a foreign firm is united with a previously domestic entity for the purpose of creating one large, more risk-averse organization. The engaging firms thus form a single economic, legal entity thereinafter, whereas unequal stakes held in the new entity can result in power struggles between partners (Dunning and Lundan, 2008b, pp. 224–228; Kutschker and Schmid, 2011, pp. 923–924). While the operationalization of foreign entry and operation modes relates to strategic, environmental and transaction-specific determinants from a decision-making perspective (Malhotra and Gaur, 2014; Hill et al., 1990), its measurement is yet associated with a wide range of approaches and terminology alike. In line with nationalization, which can be defined as causing something to be under the control of a national government (Pausenberger, 1982, p. 118; Schmid, 2000, pp. 13–15), the terms denationalization and internationalization are most often referred to as synonyms of a process with a two-way tendency to incrementally or gradually enter and operate across national borders with regard to the respective firm business activities (among many others: Johanson and Vahlne, 1977; Melin, 1992; Calof and Beamish, 1995, p. 116; Benito and Welch, 1997; Buckley and Chapman, 1997; Welch and Welch, 2009; Vissak, 2013). Even though the meaning of each of the following is distinct, the terminology is thereby often connected with a large body of subterminology such as level (Dunning, 1983; Berrill and Kearney, 2010; Aggarwal et al., 2011; Hillemann and Gestrin, 2016), stage (Turnbull, 1987, pp. 22–26; Contractor et al., 2003, pp. 7–9; Wickramasekera and Oczkowski, 2006, pp. 44–45), degree (Sullivan, 1994a; Asmussen et al., 2007; Sommer, 2009), path (-way) or pattern (Franko, 1975; Lundan and Tolvanen, 2008; Kuivalainen et al., 2012b, pp. 449–450; Sui et al., 2012, pp. 520–521; Baum et al., 2015, pp. 754–757), breadth (Ietto-Gillies, 1998, pp. 17–27; Hsu and Boggs, 2003, p. 27; Thomas and Eden, 2004, pp. 92–94; Kirca, 2008, pp. 45–47), depth (Anderson and Gatignon, 1986; Erramilli and Rao, 1990; Hill et al., 1990), scale (Qian and Li, 2002, pp. 327–328; Oh, 2009, pp. 338–339; Mudambi et al., 2018, pp. 929–936), scope (Delios and Beamish, 1999, pp. 711–713; Pantzalis, 2001, pp. 133–135; Stephan and Pfaffmann, 2001; Qian and Li, 2002, pp. 328–329; Goerzen and Beamish, 2003, pp. 1289–1290; Elango, 2004, pp. 433–434; Peng and

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Delios, 2006, pp. 386–389; Asmussen, 2009; Oh, 2009, pp. 339–340; Kim, 2013, pp. 898–900; Oh et al., 2019, pp. 561–564) as well as epochs, rhythm, time, pace or speed (Kutschker et al., 1997, pp. 110–118; Vermeulen and Barkema, 2002, pp. 640–642; Jones and Coviello, 2005, pp. 290–294; Zahra and George, 2006, pp. 263–270; Lin, 2012, pp. 48–50; Casillas and Acedo, 2013, pp. 16–23; Casillas and Moreno-Menéndez, 2014, pp. 86–88; Chetty et al., 2014, pp. 634–640; Li et al., 2015, p. 310; Johanson and Kalinic, 2016, pp. 829–833; Hilmersson et al., 2017, pp. 32–33).56 Whereas this is also the result of a great amount of empirically-driven research, subterms are used rather loosely and mistakenly as synonymous in some cases (for example: Wickramasekera and Oczkowski, 2006, pp. 39–41; Berrill and Hovey, 2013; Chadha and Berrill, 2016).57 The terms degree or level thereby refer to a measure, position or rank of intensity in which a firm experiences a foreign expansion of its business activities whilst the term stage refers to a distinct point in development for firms set in a stages-model (Contractor, 2007, pp. 12–16; Papadopoulos and Martín, 2010, p. 390; Oh and Contractor, 2014, pp. 42–46). A pattern refers to a specific composition of a firm’s state when considering several stages in a previously defined model of such, and therefore an earlier demarcated, observable behavior of cross border business activity (Jones and Coviello, 2005, p. 292; Casillas et al., 2012, pp. 466–467; Kuivalainen et al., 2012a, p. 373). Moreover, depth is defined in relation to market engagements and commitments by foreign entry and operation modes (Ietto-Gillies, 1998, p. 19; Aggarwal et al., 2011, pp. 562–563). In addition, the terms breadth and scale refer to the geographic dispersion or spread of business activity, such as sales, assets or subsidiaries, whereas, last but not least, the term scope reflects the number of countries or regions therewith connected (Oh, 2009, pp. 338–339; Cerrato and Depperu, 2011, p. 321; Aggarwal et al., 2011, pp. 563–564; Oh et al., 2019, p. 560). As explicated throughout the previous paragraphs, entry and operation as well as the expansion into foreignness therewith connected result in debate amongst scholars on the best and most comprehensive way(s) for measurement. Whereas 56 Among others, see Kirca (2008), who reviews the state and process aspects of internationalization, for further reading. 57 The synonymous use is consequently possible in some cases, whereas this does not necessarily apply for all of the (sub-) terms previously stated. As pointed out in the previous paragraph, the large body of literature does not yet allow to include a comparing view of (sub-) terminological operationalization throughout the field as part of the present work. The literature cited, however, allows to set a starting line in order to follow up in doing so with respect to future research projects. Furthermore, this review precludes a view on all of the subterminology listed in the above (for example: epochs, rhythm, time, pace or speed).

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some of the earlier contents share these foci when combining definition and empirical observations on foreign entry and operation modes (among others, see: Aharoni, 1971, p. 34), it can similarly be determined that two kinds of alternatives, namely relative and absolute numbers (for example: Benvignati, 1987, p. 449; Rugman, 1988, pp. 3–4; Thomas and Eden, 2004, p. 92), exist to quantify the respected characterizations. Relative numbers thereby indicate the contribution of foreign to the overall or total of a firm’s business activity (Schmidt, 1981, pp. 58–60; Pausenberger, 1982, pp. 120–122; Schmidt, 1989, pp. 966–967), whereas absolute numbers, in contrast, do not compare the different contexts with each other. In this way, approaches for measurement ultimately qualify to provide guidance while demonstrating the magnitude of foreign business activity. As outlined in the above, the implementation of operationalization and measurement in international business and management research is complemented by specific terminology such as typology, categorization or classification.58 The application of this terminology yet results in occasional confusion59 , which exemplifies the need to review each of the terms individually. Types and typologies are generally omnipresent in both daily routine as well as social sciences’ language whilst no to little awareness is paid to the origin of their creation (McKinney, 1969, pp. 4–8). Types and typologies thereby reflect the results of grouping processes, whereas objects of research find division using one or more attributes respectively (Lazarsfeld, 1937; Friedrichs, 1990, p. 90; Kluge, 1999, pp. 25–26, 2000, pp. 2–3). In doing so, the definition and consistency of specific constructs or sets of attributes relate to the creation of relevant types, which are yet homogenous from an internal but heterogeneous from an external point of view. Types can consequently be characterized based on overlapping attributes within research objects, whilst typologies highlight the dissimilarities amongst types by providing a content-related and systematic connection. Throughout this process, typologies embody types whereas both of the latter thus function to improve structuredness and comprehensibility of the underlying objects of research under examination (Kluge, 1999, pp. 25–31). Moreover, typologies find further specification based on their heuristic or empirical reference. Heuristic typologies thus address research objectives from the standpoint of theoretical conceptualization, whereas empirical typologies lay out characteristics based on the analysis of quantitative or qualitative empiricism 58 See Fischer (2006, pp. 24–27) for an epistemological approach and differentiation of the terminology applied. 59 See Doty and Glick (1994, p. 233) for two examples on the mixture between typologies and classification systems.

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(Kluge, 1999, pp. 60–68).60 In this way, type- and typological-based theorizing plays a substantial role when explaining cause-effect relationships in MNE-related organizational research (Doty and Glick, 1994, pp. 231–236; Fiss, 2011, pp. 395–399) and conceptually creating idealistic types (for examples, see: Mintzberg, 1979; 1983; Porter, 1980; 1985) that are associated with distinct but resolute conclusions (Doty and Glick, 1994, p. 232). In comparison to types and typologies, classifications are not based on theoretical schematics only while likewise sourcing guidance for creation and implementation throughout evidence from practice (Cain, 1964; McKelvey, 1975, 1978; Carper and Snizek, 1980; Chrisman et al., 1988; Rich, 1992). In addition, classification systems thereby offer decision rules — whereas typologies do not — when relying on distinct lines of demarcation (Doty and Glick, 1994, p. 232). While capturing and focusing on analogies of objects under investigation, naming and determination of classes and use of classifications is constituted throughout exclusivity, internal homogeneity, integrity, stability and unambiguity (Kluge, 1999, pp. 31–34; Chrisman et al., 1988, p. 416). By following reasoning for simplification and, possibly, prediction, classes and classification thereby serve to build relationships and structures within sets of data to allow for an increase in organizational efficiency and information retrieval (Gordon, 1999, pp. 5–6; Jacob, 2004, p. 523). While separating for objects with similarities, classifying is thus the process of dividing into classes (among others before: Hartigan, 1975). As early demonstrated by Rosch et al. (1976, p. 384), the terms classification and categorization are thereby randomly applied to describe similar processes.61 In contrast, a direct comparison of this terminology shows that categorizing can refer to the context of perceived overlaps whilst classifying is an analysis relating to a sufficient amount of characteristics. Boundaries are therefore static for classifications while remaining vague for categorizations. Whereas this increases flexibility for categories set, classes withhold a particularity that 60 As pointed out by Kluge (1999, p. 78), the varying levels of abstraction relating to heuristic and empirical typologies are the most substantial difference in creating a realistic picture of the objects under investigation. Therefore, the terms heuristic and empirical should rather be regarded as tendencies for integration than as strictly defined lines of differentiation. 61 See Rosch et al. (1976, p. 384), who state that the “purpose of categorization is to reduce the infinite differences among stimuli to behaviorally and cognitively usable proportions. It is to the organism’s advantage not to differentiate one stimulus from others when that differentiation is irrelevant for the purposes at hand. The basic level of classification, the primary level at which cuts are made in the environment, appears to result from the combination of these two principles; the basic categorization is the most general and inclusive level at which categories can delineate real-world correlational structures” (cf. Rosch et al., 1976, p. 384).

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results in a superior hierarchical structure (Sutcliffe, 1994, pp. 60–62; Jacob, 2004, pp. 527–531).62 The characterization of typologies and classifications hereinafter is narrowed down to relate to contributions with a greater focus on regional and global MNEs, which explicitly means that a wider range of otherwise available research cannot be considered hereinafter. This restriction principally concerns typologies and classifications with an industry- (for example: Morrison and Roth, 1992; Makhija et al., 1997), product- (for example: van Pham, 2006), distance- (for example: Zhou and Guillén, 2016) or economic-related perspective (for example: van Tulder, 1999) or their mixture (for example: Porter, 1986), but, likewise, applies for works that take various idealized forms of MNEs into account (for example: Doz and Prahalad, 1991; Kim and Aguilera, 2015).63 Additionally, the debate on regional and global MNEs is separated from publications dealing with the measurement of globalization. As this literature focuses on indices for (economic) globalization or a purely economic point of view, such as by provided by Rodrik (2001), Scholte (2002, 2005), Andersen and Herbertsson (2003), A.T. Kearney (2003), Dreher (2006; 2009a; 2009b), Heshmati (2006), Kali et al. (2007) and Kali and Reyes (2007) as well as OECD (2010), its application and contribution substantially differs from the research under investigation in the present work.64 Consequently, heuristic and empirical typologies and classifications are selected and characterized hereinafter to derive and outline specifics regarding the operationalization and measurement of regional and global MNEs.

2.4.2

Characterization of Typologies and Classifications

The previous subsection highlights the need to further determine the operationalization and measurement of dimensions relating to firm foreign business activity. Heuristic (Subsection 2.4.2.1) and empirical typologies (Subsection 2.4.2.2) and classifications (Subsection 2.4.2.3) are thus characterized to provide ground for analysis and discussion in the following section (Section 2.4.3). Table 2.4 consequently provides an overview of the contents under 62 See

Jacob (2004), who performs a review of the terms classification and categorization. In this context, it may be fruitful to outline that taxonomy is referred to as the “study of the general principles of systematics” (cf. Merriam-Webster, 2018). 63 See Macharzina and Engelhard (1991) and Schmid (1996, pp. 34–40) for a discussion of ideal-typical archetypes. 64 See Arribas et al. (2009) for further reading and an overview on the measurement of globalization from this perspective.

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examination to create further understanding for a perspective of regional and global MNEs respectively. Table 2.4 Overview of heuristic and empirical typologies and classifications.65 Typologies

Classifications

Heuristic

Empirical

Perlmutter (1965, 1969) and Heenan and Perlmutter (1979) Aharoni (1971) Johanson and Mattsson (1986) Cheng and Ramaswamy (1989) Vachani (1991)

Stopford and Wells (1972) Bartlett and Ghoshal (1989) Malnight (1995) Dimitratos et al. (2003) Park and Bae (2004)

Bruck and Lees (1966) Sieber (1970) Kaynak (1985) Rugman and Verbeke (2004a) and Rugman (2005c) Asmussen (2009) Aggarwal et al. (2011)

Source: Own illustration, on the basis and as an extension of Fischer (2006).

2.4.2.1 Heuristic Typologies This subsection provides a review of the heuristic typologies that exist regarding the operationalization and measurement of dimensions relating to firm foreign business activity. Therefore, the contributions by Perlmutter (1965, 1969) and Heenan and Perlmutter (1979), Aharoni (1971), Johanson and Mattsson (1986), Cheng and Ramaswamy (1989) and Vachani (1991) are assessed regarding their characteristics hereinafter. The three-/four-fold heuristic typology by Perlmutter (1965, 1969) and Heenan and Perlmutter (1979) stresses the relevance of managerial attitudes as an influence on the foreign business activity of firms.66 On the idea where quantitative insight is considered useful but likewise not accepted to comprehensively determine firm 65 See Appendix 6: Overview of Typologies and Classifications for details and a wide range of

typologies and classifications that find application or receive above-average attention within the discipline. Among others, on the basis of Fischer (2006), whereas different perspectives exist on the allocation of Bartlett and Ghoshal (1989) as an empirical typology. Furthermore, see Grant (1987), Geringer et al. (1989) and Tallman and Li (1996) for the degree of firm internationality. 66 Perlmutter (1965, pp. 155–158; 1969, pp. 10–14) identifies three orientations, namely ethno-, poly- and geocentric, which find complementation on the basis of Heenan and Perlmutter (1979, pp. 15–21) throughout the introduction of a fourth, regiocentric orientation. Additionally to these works, see Schmid and Machulik (2006) or Machulik (2010) for reviews.

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orientation, cultural norms, personal experiences and habits arising from decision-maker behavior serve to conceptually identify four management orientations, namely ethnocentrism (or home-country orientation), polycentrism (or host-country orientation), regiocentrism (or regional orientation) and geocentrism (or world orientation) (Perlmutter, 1965, pp. 155–158, 1969, pp. 10–14; Heenan and Perlmutter, 1979, pp. 15–26). Based on a breakdown of functions, product groups or locations, the orientations are then used to draft attitudinal profiles, which illustrate the variety in firm foreign business activity and provide insight for the appropriateness in the management of such (Perlmutter, 1969, p. 14; Heenan and Perlmutter, 1979, pp. 21 ff.). Table 2.5 The heuristic typology by Heenan and Perlmutter (1979). Enterprise aspects Orientation Ethnocentric

Polycentric

Regiocentric

Geocentric

Organizational complexity

Complex at home, simple in subsidiaries

Varied and independent

Highly interdependent on a regional basis

Increasingly complex, highly interdependent on a worldwide basis

Decision-making

In HQ

In subsidiaries

In regional HQ

HQ and subsidiary collaboration

Evaluation and control

Home standards Determined applied locally everywhere

Determined regionally

Universal standards

Geographical identification

Nationality of owner

Nationality of host Regional country company

Truly worldwide company, identifying with national interests

Recruiting and staffing

People of home country developed for key positions everywhere

People of local nationality developed for key positions in their own country

Worldwide talent for key positions everywhere in the world

Regional people developed for key positions anywhere in the region

Source: Own illustration, on the basis of Perlmutter (1965, pp. 155–158, 1969, pp. 10–14) and Heenan and Perlmutter (1979, pp. 15–26).

Table 2.5 is used to further characterize the heuristic approach under consideration of selected enterprise aspects from the perspective of regional and global MNEs, whilst the approach also finds specificity in the academic literature

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when strategic (among others: Wind et al., 1973; Kobrin, 1994; Calof and Beamish, 1994)67 or regional and global concerns (for example: Perlmutter and Heenan, 1986; Douglas and Wind, 1987; Bartlett and Ghoshal, 1989; White and Poynter, 1989) are addressed.68 In comparison to the use of managerial attitudes, Aharoni (1971) thereby applies the size of involvement or operations as well as the types of operations, such as foreign market entry and operation modes, to separate the worldwide corporation from multinational clusters or corporations. Different types of operations are consequently identified to characterize and subdivide MNCs69 as firms selling and servicing products manufactured (exporters), suppling raw materials (importers), dealing with the transportation of workforce and goods (transporters), manufacturing or assembling (manufacturers), trade controlling (traders) and petroleum producing (petroleum; Aharoni, 1971, pp. 35–36) with the approach fostering the facilitation and the development of firm intern-/multinationality indexes (Aggarwal et al., 2011, p. 559).70 A heuristic typology is likewise developed by Johanson and Mattsson (1986), who take the perspective that a firm’s foreign business activity is especially influenced by the creation and development of positions in relation to respective counterparts in foreign networks (Johanson and Mattsson, 1986, pp. 235–249). Based on extension, penetration and integration, Johanson and Mattsson (1986, pp. 249–259) propose that the degree of firm (FF) and market (MF) foreignness can be associated with four cases of marketing situations, namely early starter (low degrees in FF and MF), lonely international (high in FF and low in MF), late starter (low in FF and high in MF) and international among others (high degrees in FF and MF).71 The foreignness of firm business activity is therewith connected to the strength of and integration into networks using a matrix while 67 A

review suggests that Wind et al. (1973, p. 15) mistakenly apply the term categorization for this heuristic typology. 68 Calof and Beamish (1994), for example, design a questionnaire to identify the centricity of a firm’s attitude. 69 The terminology stated is used as applied by the respective author. 70 For examples, see Sullivan (1994a) or Gomes and Ramaswamy (1999). In addition, see Ramaswamy et al. (1996) or Ietto-Gillies (1998) for further comments on indexes and indices associated with measuring the degree of internationalization. 71 Johanson and Mattsson (1986, p. 260) focus on two characteristics, namely firm and market (environment is synonymously applied as a term for market; author’s note). In the respective contribution, the authors furthermore connect their approach with the term internationalization but not regional and global MNEs per se, which is adapted for the research hereby presented due to the objects under investigation. Additional limitations stem from the fact that the authors do not directly specify how network relationships can be created, controlled or managed on the firm-level.

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implying that firm or market foreignness increases with the magnitude and interconnectedness of these network(s).72 The degree of firm or market foreignness is also considered by Cheng and Ramaswamy (1989), who assume that organizations acquire raw materials or resources (input), which are converted (transformation) and then returned to the environment (output). For the purposes of optimization, some or all of these activities are therefore chosen to be performed in one or more foreign countries (Cheng and Ramaswamy, 1989, p. 107).73 The construct Cheng and Ramaswamy (1989, pp. 106–108) thereby create results in the generation of eight firm types (or so-called “profiles”; cf. Cheng and Ramaswamy, 1989) that range from domestic to highly diversified with operations in different countries respectively.74 In this context, Table 2.6 is used to describe the typology, which is characterized by input-, transformation- and output-serving system functions on one end and a distinct grouping of domestic- and foreign-bound operations, Type 2 through 8 respectively, at the other end. A geographical diversification of (products and foreign) business activities is similarly considered by Vachani (1991, pp. 308–310), who proposes the advancement of existing entropy measures75 to assess the global diversification of firms (Vachani, 1991). Based on similarities and differences in physical and cultural proximity as well as the level economic performance among the industries and countries in which firms have (foreign) operations, Vachani (1991, pp. 310–314) additionally argues that there exists a need to distinguish between 72 It may be valuable to point out that the approach is considered a heuristic typology though the authors obtain empirical input received from practice (see Johanson and Mattsson, 1986, p. 261; author’s note). The respective contribution does not yet provide any evidence on whether this practical input is of influence for the approach and typology as presented. In addition, see Fina and Rugman (1996) for an application in the context of internalization and internationalization theory. 73 Under the consideration of a second assumption, Cheng and Ramaswamy (1989, p. 107) emphasize that firms align their operations under the norms of rationality in order to optimize overall organizational efficiency and/or effectiveness. 74 Cheng and Ramaswamy (1989, pp. 107–108) note that their systems typology serves to generate an approximate picture of the complexity surrounding firms that operate in foreign environments. Though the approach remains abstract, it is likewise considered in previous research discussing the multidimensionality of the firm foreignness (for example: Annavarjula and Beldona, 2000; Kirca, 2008; Sommer, 2009). In addition, it may be pointed out that the authors also provide data from two firms, namely Merck and Squibb, and the years 1977, 1982 and 1987 to then highlight the workings of their typology. 75 See Kim (1989, pp. 378–381), who proposes a total diversification measure based on unrelated diversification, global market diversification and global related diversification. Also, see Palepu (1985) for research applying entropy measures.

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Table 2.6 The heuristic typology by Cheng and Ramaswamy (1989). Input

Transformation

Output

Type

Domestic

Domestic

Domestic

1

Foreign

2

Foreign

Domestic

3

Foreign

4

Domestic

5

Foreign

Domestic Foreign

Foreign

6

Domestic

7

Foreign

8

Source: Own illustration, adapted on the basis of Cheng and Ramaswamy (1989, p. 107).

unrelated and related geographic diversifications. Vachani’s (1991, pp. 312–313) total global diversification index thus relates to different kinds of diversification, namely (1) across unrelated industries, (2) unrelated country clusters, (3) similar countries within country cluster and (4) related products, to outline international geographic and global diversification (strategy; author’s note) amongst five types: global, focused international and diffused diversifiers as well as international non-diversifiers and unrelated diversifiers (Vachani, 1991, pp. 313–316).76

2.4.2.2 Empirical Typologies The previous subsection provides a review of (heuristic) typologies that exist regarding the operationalization and measurement of dimensions relating to foreign business activity. This subsection supplements these contents whereas the empirical typologies by Stopford and Wells (1972), Bartlett and Ghoshal (1989), Malnight (1995), Dimitratos et al. (2003) and Park and Bae (2004) are assessed regarding their characteristics hereinafter.77 Based on the empirical study of 187 US firms, Stopford and Wells (1972, pp. 27–29) argue that most sample firms follow a three-stage pattern of foreign 76 Vachani (1991) separates amid two analytical levels while specifically referring to diversification in- or outside a region. 77 See Harzing (2000, pp. 104–105), who reviews and discusses ulterior empirical typologies that do not necessarily refer to regional and global MNEs, and, among many others, Ghoshal and Bartlett (1990), Bartlett and Ghoshal (1992), Rugman and Verbeke (1992) as well as Kutschker and Schmid (2011, pp. 297–306) for additional reading on this topic.

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expansion.78 Stopford and Wells (1972, pp. 63–84) thereupon derive a typology from an organizational perspective while assuming that strategy and structure are subject to adaptation if an increase in either one or both of the variables considered, namely the relative stake of foreign sales and the degree of product diversity, arises. Whilst the respective model79 in connection with functional structures, product and area divisions as well as matrix or mixed structures is consequently subject to intense verification and revision80 (among others: Daniels et al., 1984; Egelhoff, 1988; Pla-Barber, 2002; Wolf and Egelhoff, 2002; Qiu and Donaldson, 2012), Wolf and Egelhoff (2001, pp. 125–127) specify such regarding hypothesis on the structures to be associated with the international, transnational, multinational and global dimension.81 One if not the most popular empirical typology in the international business and management literature82 is presented by Bartlett and Ghoshal (1989), who use case studies to identify four types of strategic roles associated with firms’ foreign operations (Bartlett and Ghoshal, 1989, pp. 13–17).83 On the basis of continuous 78 See as outlined in Stopford and Wells (1972, pp. 3–6), who use a list of Fortune Global 500

firms to examine the foreign activities of 187 firms based on public sources, interviews with managers and questionnaires. Furthermore, see Wolf (2011) and Grant (2016, pp. 154–159) for additional reading on organizational forms and structures. 79 According to Stopford and Wells (1972), firms tend to implement (1) functional structures for low stakes in foreign sales and product diversity, (2) worldwide product divisions for a low stake in foreign sales and a high stake in product diversity, (3) area divisions for a high stake in foreign sales and a low stake in product diversity as well as (4) matrix or mixed structures for high stakes in foreign sales and product diversity. 80 Egelhoff (1988, pp. 11–12), in a widespread revision, for example, further introduces the relative stake of foreign manufacturing as a variable to frame the interdependency and depth of firm foreign business activity. 81 While building upon Perlmutter (1969) and Bartlett and Ghoshal (1989), Wolf and Egelhoff (2001, p. 125) specifically exclude matrix or tensor structures for the international dimension. For the multinational dimension, Wolf and Egelhoff (2001, pp. 125–126) presume that firms with a multinational strategy tend to have a regional, matrix or tensor structure. For the transnational dimension, Wolf and Egelhoff (2001, pp. 126–127) further hypothesize that firms with a transnational strategy tend to have a matrix, tensor or mixed structure. For the global dimension, Wolf and Egelhoff (2001, p. 126), lastly, find that global firms operate with a global strategy and tend to have functional, product, matrix or tensor structures. 82 Tallman (1990, pp. 157–159) early seizes a (partially very) critical perspective when reviewing the unique selling points of Bartlett and Ghoshal’s (1989) contribution: intuitive appeal, close proximity, strong statements and persuasive argumentation. For further assessment, see Ferreira (2011), who shares comparable views on an extended basis. 83 The interviewees, who already contribute to an earlier work by Bartlett and Ghoshal (1987), hold positions with Ericsson, General Electric, ITT, Kao, Matsushita, NEC, Philips, Procter & Gamble and Unilever (Bartlett and Ghoshal, 1989, p. 13).

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consultation with practitioners — the relevant cases rest on interviews with more than 200 managers over a period of five years — Bartlett and Ghoshal (1989) shape and formulate a four-type evolutionary approach regarding firm strategy, structure and environment that is described using Table 2.7 as follows.84 Table 2.7 The empirical typology by Bartlett and Ghoshal (1989). Type

Strategy

Structure

Environment

International

Worldwide transfer of home innovations, administrative control, portfolio of businesses

Coordinated federation

Differentiated

Multinational

Local diversification in products, personal control, national responsiveness

Decentralized federation

Local

Global

Standardized products, tight central control of operational decisions, global scale efficiency

Centralized hub

Single integrated market

Transnational

Specialized resources/capabilities, interdependent flows, coordination and cooperation

Integrated network

Complex

Source: Own illustration, on the basis Bartlett and Ghoshal (1989, pp. 48–55 & 75–94).

Taking into account the underlying empiricism (Bartlett and Ghoshal, 1989, pp. 213–237), Bartlett and Ghoshal’s (1989) perspective may seem historically outdated as characteristics change or evolve over time (Macharzina and Engelhard, 1991, pp. 28–29; Harzing, 1999, p. 32).85 The contribution yet establishes an important link between environment, strategy and structure while allowing for switches from one type to another when considering the rise of inor external changes. Consequently, Bartlett and Ghoshal’s typology is not directly considered to be part of a(n) (for example: internationalization; author’s 84 The

four-type approach as proposed by Bartlett and Ghoshal (1989) is subject to heavy debate whereas strategy follows structure or vice versa (among others: Chandler, 1962; Stopford and Wells, 1972; Harzing, 1999, p. 32). 85 In this context, Mees-Buss et al. (2019) compare and analyze the core characteristics of Unilever while outlining and exemplifying the transformation from a transnational organization towards a so-called neo-global corporation.

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note) process (Sundaram and Black, 1992, p. 740; Harzing, 1999, 34–40). Under this prospect, the typology by Bartlett and Ghoshal is therefore subject to continuous theoretical and practical extension (among others: Ghoshal and Nohria, 1993; Leong and Tan, 1993; Harzing, 2000; Wolf and Egelhoff, 2002; Levy et al., 2007; Djodat and Knyphausen-Aufseß, 2017) that also considers a perspective of regional and global MNEs (for example: Rugman et al., 1995; Rugman et al., 2010).86 An empirical typology is likewise presented by Malnight (1995), who identifies adjustments in a firm’s resource configuration (resource focus; author’s note) and organization (organizational focus; author’s note) as a result of ongoing global competitive challenges (Malnight, 1995, p. 131). By reflecting on interdependencies observed based on a case study in the pharmaceutical sector87 , Malnight (1995, pp. 131–140) develops a(n) (up to) four-stage evolutionary model by providing individual functional types for ethnocentric firms.88 Table 2.8 is used to describe Malnight’s (1995) typology as follows. Table 2.8 The empirical typology by Malnight (1995). Type

Resource focus

Organizational focus

Appendage

Leverage domestic resources

Direct international activities

Participation

Expand international resources

Manage international expansion

Contribution

Upgrade international resources

Support international activities, coordinate worldwide activities

Integration

Reallocate worldwide resources

Integrate worldwide activities

Source: Own illustration, adapted on the basis of Malnight (1995, p. 138).

While separating between different recourse functions, Malnight thus does not consider the firm as a single entity only but pictures a functional perspective of its respective foreign business activity (Fischer, 2006, pp. 78–79). Therefore, resources and organizational foci are applied to harmonize strategy and environment while providing horizontal or informal links between headquarters and subsidiaries to encounter constraints (Barkema and Vermeulen, 1998, p. 21). 86 The title and content of the contribution suggest that Rugman et al. (2010, p. 273) mistakenly apply the term classification. 87 In his case study, Malnight (1995, pp. 122–123) carries out semi-structured interviews and examines archival documents from the pharmaceutical firm Eli Lilly and Company to investigate changes over a fourteen-year period for its activities. 88 See subsection 2.4.2.1 or Perlmutter (1965; 1969) and Heenan and Perlmutter (1979) for a definition of ethnocentric firms.

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Dimitratos et al. (2003) propose another empirical typology while exploring the characteristics of micromultinational enterprises (mMNEs) using a case study approach.89 The authors thereby argue that mMNEs somewhat differ from (traditional or; author’s note) exporting small firms, whereas seven types of firms are introduced to outline the emerging intensity between foreign business activity and these novel kinds of environments (Dimitratos et al., 2003, pp. 169–171). The control and management of value adding functions or (the respective joint) operations are consequently considered to exemplify empirical type-related constellation and investment modes. Table 2.9 provides a description of this empirical typology and its respective types as follows. Table 2.9 The empirical typology by Dimitratos et al. (2003). Type

Strategy

Environment

Network seekers

(Gradual) Implementation of operating modes

Resource constraints

Market hunters

Customer service excellence

Service niche customers

Flexibility pursuers

Flexible national responses, removal Bureaucratic hierarchies of administrative barriers

Resource trackers

Relocation of production or resourcing facilities

Resource advantageousness

Global market chasers Tapping market niches through economies of scale and scope

Competitive markets

Learning seekers

Development and acquisition of experiential knowledge

Market idiosyncrasies

Competition players

Replicate rival strategy to preempt or follow competition

Player rivalries

Source: Own illustration, on the basis of Dimitratos et al. (2003, p. 167).

In addition, Park and Bae’s (2004) empirical typology has its origin in the (strategic; author’s note) statics and dynamics as experienced based on the developments of international new ventures90 in South Korea (Park and Bae, 89 Dimitratos

et al. (2003, p. 168) collect evidence from a qualitative examination of five firms in three countries with different economic characteristics. The methods applied on two US, two United Kingdom (UK) and one Greek firm, that stem from various sectors, include semi-structured interviews with managers and an investigation of firm documents and archives. 90 See Oviatt and McDougall (1994, p. 49) for a definition of the term international new ventures (INVs).

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2004, pp. 85–91). Following a two-step approach to build their framework91 , Park and Bae (2004, pp. 91–97) demonstrate the interest mix between local and global markets while highlighting three facets, namely technological capabilities, which refer to the R&D intensity as measured based on human resources and investment, product/market maturity, which represents the product life cycle’s stage, and target market, which is defined using internationalization intensity (in this case: export sales to total sales; Park and Bae, 2004, p. 92). The empiricism is then used to derive seven types of growth patterns (Park and Bae, 2004, pp. 97–101), which find further description on the basis of Table 2.10.92 Table 2.10 The empirical typology by Park and Bae (2004). Type

Strategy

Reactive initiator

Local followers in local existing Existing market in maturity market decline stage

Import substitution

Local pioneers in local existing market

Proactive localization Local followers in local emerging market

Environment

Inferior technological capabilities Technological and market uncertainty

Creative initiation

Local pioneers/global followers First-mover or follower in local emerging/global advantageousness existing market

Global niche

Global pioneers in global existing market

Price-based, intensified competition

Early market entry

Global followers in global emerging market

Acceleration of technological changes, shortening product life cycles

Global innovator

Global pioneers in global emerging market

Invention and commercialization of new technology, new products

Source: Own illustration, on the basis of Park and Bae (2004, pp. 87–91).

91 The five cases that Park and Bae (2004, pp. 92–97) analyze all relate to Korean technologybased firms that are publicly held and listed on the Korea Stock Exchange or the Korean Securities Dealer Automated Quotation System. The cases are developed by conducting interviews with founders or managers that are involved in the early stages of firm development. 92 In addition to the empirical typologies selected, research on the taxonomies of small- and medium-sized enterprises (SMEs) also stems from Knight and Cavusgil (2005) and, more recently, Hagen et al. (2012) and Cerrato et al. (2016).

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2.4.2.3 Classifications The two previous subsections provide a review of typologies that exist regarding the operationalization and measurement of dimensions relating to foreign business activity. This subsection complements foregoing contents while the classifications by Bruck and Lees (1966), Sieber (1970), Kaynak (1985), Rugman and Verbeke (2004a) and Rugman (2005c), Asmussen (2009) and Aggarwal et al. (2011) are assessed regarding their characteristics hereinafter. Bruck and Lees (1966, p. 128, 1968, 14–15) consider empirical data and foreign to total measures for firm classification whilst analyzing the firm operations on the basis of sales, profits, employees, assets or production. The authors thereby connect empirical data from Fortune Global 500 firms with four-way thresholds to determine the respective classification. The classification names and thresholds applied are described using Table 2.11.93 Table 2.11 The classification by Bruck and Lees (1966, 1968). Classification

Thresholds

Multinational corporations

Firms with over 50 percent of foreign operations

Internationally oriented corporations

Firms with 25 to 50 percent of foreign operations

Firms with significant foreign operations

Firms with 10 to 24 percent of foreign operations

Firms with small foreign operations

Firms with less than 10 percent of foreign operations

Source: Own illustration, on the basis of Bruck and Lees (1966, p. 128, 1968, 14–15).

The use of thresholds is likewise considered as part of the classifications by Sieber (1970) and Kaynak (1985). Sieber (1970, p. 419), for example, thereby uses the percentage of foreign (capital) investments to determine whether firms can be classified as (1) international with a stake of at least 25 to 50 percent, (2) 93 In the process of data management, Bruck and Lees (1968, p. 15) provide three classes that do not necessarily relate to their classification directly, namely foreign-owned corporations for firms representing subsidiaries of foreign parent company affiliations, undisclosed for firms that provide evidence of foreign operations but no empirical data and none for firms with insignificant foreign operations. The authors obtain data for 281 firms, with another 117 firms undisclosed, 97 firms with insignificant operations (classified none) and five firms classified as foreign owned corporations. When applying the thresholds on their data, Bruck and Lees (1968, p. 16) only consider firms that publish statistics on foreign operations.

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multinational with more than 50 and up to 75 percent or as (3) world corporation with more than 75 percent. Kaynak (1985, pp. 200–206) similarly analyzes the gross export sales by manufacturing firms und uses the percentage of export sales in total sales to identify whether exporters’ involvements fall within one of the following five classes respectively: (1) less than 10 percent, (2) 10 to 19 percent, (3) 20 to 29 percent, (4) 30 to 50 percent and (5) 50 percent and more.94 The classification by Rugman and Verbeke (2004a) and Rugman (2005c) relates to the regiocentric orientation from the previous subsections while applying thresholds to the use of empirical data under consideration of the broad triad concept (Ohmae, 1985, p. 5; Rugman, 2000b, p. 114).95 Based on Ohmae (1985, p. 121) arguing that market rivalry drives firms into all three regions of the triad, Rugman and Verbeke (2004a) and Rugman (2005c) provide a classification system to measure the regionality in MNE business activity. The bias of MNE-related subdimensions, namely home region-oriented, bi-regional, host region-oriented and global MNE, is described using Table 2.12 and finds application in connection with data from Fortune Global 500 firms. While Hejazi (2007) subsequently extends the approach with the use of a domestic subdimension, the classification as primarily introduced is subject to a wide body of research focusing on criticism, adaptation and extension as well as various sets of (additional or re-testing of the original) empirical data (among many others, for example: Aharoni, 2006; Westney, 2006; Dunning et al., 2007; Osegowitsch and Sammartino, 2008; Asmussen, 2009; Aggarwal et al., 2011; Mudambi and Puck, 2016; Oh et al., 2019; Jeong and Siegel, 2020).96 While the classification by Rugman and Verbeke (2004a) and Rugman (2005c) finds its origins throughout the use of data on foreign direct investments (for example: Rugman, 2000a), the approach receives refinement based on the proposition of a multidimensional index of regional and global orientation by 94 In comparison to Sieber (1970, pp. 418–419), who addresses from a conceptual perspective for empirical use, Kaynak (1985, p. 206) also applies his classification to empirical data from Nova Scotian firms for the years 1978, 1979 and 1980. 95 Though often considered, neither Rugman and Verbeke (2004a) nor Rugman (2005c) necessarily display the pioneering contribution for this classification whilst setup, data and conclusions are broadly similar considered and published as part of prior research (for example: Moore and Rugman, 2003, p. 2; Rugman, 2003a, pp. 4–5, 2003c, p. 413; Rugman and Brain, 2003, pp. 9–11; Rugman and Girod, 2003, p. 32, but especially Rugman and Verbeke, 2004b). The classification as provided by Rugman and Verbeke (2004a) and Rugman (2005c) can thereby also be regarded as an extension of the typologies by Perlmutter (1965, 1969) and Heenan and Perlmutter (1979) as well as by Bartlett and Ghoshal (1989). 96 A detailed review of criticism, adaptation and extension as well as empiricism is therefore presented as part of Chapter 3.

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Table 2.12 The classification by Rugman and Verbeke (2004a) and Rugman (2005c). Classification

Thresholds

Home region-oriented MNEs with at least 50 percent of sales (or assets) in their home region of the triad Bi-regional

MNEs with at least 20 percent of sales (or assets) in each of two regions, but less than 50 percent of sales (or assets) in any one region

Host region-oriented

MNEs with 50 percent of their sales (or assets) in a triad market other than their home region

Global

MNEs with 20 percent or more of sales (or assets) in each of the three parts of the triad, but less than 50 percent of sales (or assets) in any one region of the triad

Source: Own illustration, on the basis of Rugman and Verbeke (2004a, pp. 6–7) and Rugman (2005c, p. 64).

Asmussen (2009). Asmussen’s (2009, pp. 1195–1197) construct thereby suggests to normalize previous measures by connecting data with global gross domestic product (GDP) distribution for the purposes of scaling. Whilst the analysis of MNE geographic scope thereby provides additional, sophisticated insight for a national, regional, host-regional and global subdimension in MNE business activity, the combination of measures yet results in limiting the original classification’s practical appeal (Banalieva and Dhanaraj, 2013, p. 92). In their approach for classification, Aggarwal et al. (2011) assess the degree of firm-level multinationality with regard to six regions, namely Africa, Asia, Europe, North and Central America, Oceania and South America (Aggarwal et al., 2011, pp. 562–563). When separating the breadth of geographical spread for a domestic (D), regional (R), transregional (T) and global subdimension (G) and applying firm sales and investments (on the basis of subsidiary counts; author’s note) as measures for engagement depth, MNEs find division in a matrix of 16 classes that range from purely domestic (D) to global (G6) (Aggarwal et al., 2011, pp. 562–567). According to Aggarwal et al. (2011, p. 563) and as described using Table 2.13, a firm is thereby referred to as regional if a MNE has business activities in less than one-third of the countries in the region (R), between one-third and two-thirds (R2) and more than two-thirds (R3). Transregional firms are defined as MNEs that have business activities in two (T2), three (T3), four (T4) or five regions (T5). Global MNEs have business activities in all six regions based on the classes (G) through (G6).

Global

Transregional

Regional

Domestic

Global

Transregional ✓

✓

✓

R1

✓

✓

R2

✓

✓

R3

✓

✓

T1

✓

✓

T2

Source: Own illustration, adapted on the basis of Aggarwal et al. (2011, p. 564).

Subsidiaries

✓

Regional

D

Sales

Domestic

Business activity

Classification

Table 2.13 The classification by Aggarwal et al. (2011).

✓

✓

T3

✓

✓

T4

✓

✓

T5

✓

✓

G

✓

✓

G1

✓

✓

G2

✓

✓

G3

✓

✓

G4

✓

✓

G5

✓

✓

G6

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Whereas this classification is initially tested with data from the largest 100 G7 firms (Aggarwal et al., 2011, pp. 565–567), the approach itself as well as the spinoffs and adaptations therewith connected by the respective co-authors empirically demonstrate how the application of different measures and contingencies can lead to the generation of different results (among others: Aggarwal et al., 2011, p. 572; Berrill, 2015, p. 99; Mullen and Berrill, 2015, p. 303; Chadha and Berrill, 2016, pp. 6–7; O’Hagan-Luff and Berrill, 2016, p. 209).97 The previous contents consecutively outline the characteristics associated with selected typologies and classifications from international business and management research. To offer insight on implications for regional and global MNEs and to prepare for the review of existing empiricism, the typologies and classification are analyzed and discussed in the next section.

2.4.3

Analysis and Discussion of Typologies and Classifications

The characterization of selected heuristic and empirical typologies and classifications from the previous section shows that many descriptions and forms serve as a basis for the analysis and discussion from a regional and global MNE-related perspective. In this context, Table 2.14 provides a summary whereas typologies and classifications are reviewed in relation to six criteria, namely the number of types and classes, consideration of subgroups/-dimensions, affiliation and diversity between types and classes, examination levels, scientific theory perspectives as well as the order of contents, as follows. A first criterion is reflected by the number of types or classes, which, as outlined using Table 2.14, ranges from a minimum of three to a maximum of eight or, respectively, up to 16 for the selected typologies and classifications. Thereby, more than three quarters of the typologies and classifications apply between three to five types or classes, which displays that more or very detailed approaches for division, such as presented by Dimitratos et al. (2003), Park and Bae (2004) and Aggarwal et al. (2011), do not present the general but rather a subordinate case. Looking at the four-class system created by Rugman and Verbeke (2004a) and Rugman (2005c), it can equally be observed that a preliminary, three-class approach does not consider the sub-dimension of host-region orientation (see Rugman and Girod, 2003, p. 32), which thus

97 See Chapter 3 for a more detailed review of the empirical studies considering the classification by Aggarwal et al. (2011).

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represents an eye-catching and more than slight reduction compared to its subsequent extension. While this practically represents a change in the configuration of the approach, the procedure yet highlights how typologies and classifications serve as a link for the consideration of subgroups/-dimensions. As a second criterion, types and classes therefore do not intend to display the international firm or the multinational enterprise per se with the analytical foci considered stemming from research object size, such as SMEs or MNEs (Dimitratos et al., 2003; Rugman, 2005c; Aggarwal et al., 2011), attitudes, such as managerial or strategic (Heenan and Perlmutter, 1979; Bartlett and Ghoshal, 1989), temporality, such as new ventures (Park and Bae, 2004), entry or operating mode, such as capital investments or export trading (Sieber, 1970; Kaynak, 1985) and configuration, such as structures or resources (Stopford and Wells, 1972; Malnight, 1995). In extension, the classification by Aggarwal et al. (2011) further emphasizes this finding with regard to its two-tier application (T, T1–T5; Table 2.13). A third criterion relates to the affiliation and diversity between types and classes. At least two of the selected typologies and classifications thus refer to a series of different possibilities for stages as part of a firm development process (for example: Heenan and Perlmutter, 1979; Johanson and Mattsson, 1986), whereas most of the classifications find equal weighting for their underlying classes. Classifications are thereby subject to the application of relative numbers, such as exports or, more generally, foreign to the overall or total of a firm’s business activity (among others: Kaynak, 1985; Rugman, 2005c; Aggarwal et al.) or a combination of financials, such as sales, assets and employees (Bruck and Lees, 1966, p. 128). In contrast and with Stopford and Wells (1972) being an exception, this is not the case for the selected typologies (among others: Aharoni, 1971; Bartlett and Ghoshal, 1989). A fourth criterion that can be drawn from the prior characterization is reflected throughout the different examination levels. The respective dimensions are thus conceptually either seen as a single organizational unit or as the composition of different expertise- or value-adding functions within an expanding firm. The dominant stake of the selected typologies and classifications thereby views the firm as a single organizational unit (among others: Vachani, 1991; Asmussen, 2009), whilst the examinations by Cheng and Ramaswamy (1989) and Malnight (1995) display the reproduction of a functional perspective of firm denationalization. From the perspective of scientific theory, which represents a fifth criterion, it can be observed that the selected typologies and classifications substantially vary regarding their direction. Whilst regional and global thereby represent two possible dimensions that are associated with the firm-level (for example:

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Table 2.14 Summary of heuristic and empirical typologies and classifications. Author(s) (year)

Taxonomy

Types or classes (number) Focus

Perlmutter (1965, 1969) and Heenan and Perlmutter (1979)

Typology (heuristic)

Ethnocentric, polycentric, Decision-maker regiocentric, geocentric attitudes (4)

Bruck and Lees (1966)

Classification

Small foreign operations, Firm operations significant foreign operations, internationally oriented, multinational (4)

Sieber (1970)

Classification

International, multinational, world corporation (3)

Aharoni (1971)

Typology (heuristic)

Multinational Firm operation sizes corporation/cluster, and types worldwide corporation (3)

Foreign (capital) investments

Stopford and Wells Typology (1972) (empirical)

Functional structures, Firm structures product and area divisions, matrix or mixed structures (5)

Kaynak (1985)

Classification

Export involvement less than 10 percent, 10 to 19 percent, 20 to 29 percent, 30 to 50 percent and 50 percent and more (5)

Firm exporting activities

Johanson and Mattsson (1986)

Typology (heuristic)

Early starter, lonely international, late starter, international among others (4)

Firm network integrations

Bartlett and Ghoshal (1989)

Typology (empirical)

International, multinational, transnational, global (4)

Firm internationalization

Cheng and Ramaswamy (1989)

Typology (heuristic)

Domestic, international (2–8; 8)

Systems typology

Vachani (1991)

Typology (heuristic)

Global, focused Firm product and international and diffused geographic diversifiers, international diversification non-diversifiers, unrelated diversifiers (5) (continued)

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Table 2.14 (continued) Author(s) (year)

Taxonomy

Types or classes (number) Focus

Malnight (1995)

Typology (empirical)

Appendage, participation, Firm resource contribution, integration configuration (4)

Dimitratos et al. (2003)

Typology (empirical)

Network seekers, market hunters, flexibility pursuers, resource trackers, global market chasers, learning seekers, competition players (7)

Firm micromultinationality

Park and Bae (2004)

Typology (empirical)

Reactive initiator, import substitution, proactive localization, creative initiation, global niche, early market entry, global innovator (7)

Firm internationalization

Rugman and Verbeke (2004a) and Rugman (2005c)

Classification

Home region-oriented, host region-oriented, bi-regional, global (4)

Firm regionality

Asmussen (2009)

Classification

National, (home-) regional, host-regional, global (4)

Firm geographic scope

Aggarwal et al. (2011)

Classification

Domestic, regional (R1-R3), trans-regional (T1-T5), global (G1-G7) (16)

Firm multiregionality

Source: Own illustration, based on the contributions by the author(s) stated respectively.

Rugman, 2005c; Asmussen, 2009; Aggarwal et al., 2011), plenty of possibilities for alternatives are provided throughout the use of different perspectives, such as throughout structural (for example: Stopford and Wells, 1972) or network-related approaches (for example: Johanson and Mattsson, 1986). A sixth criterion considers the varying order of contents throughout the selected typologies and classifications. Some of the types and classes thereby focus on making use of characteristics in order to describe the respective (regional and global) dimensions (for example: Heenan and Perlmutter, 1979; Bartlett and Ghoshal, 1989; Vachani, 1991), whilst others use the dimensions in

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order to specify or predetermine the characteristics therewith associated (for example: Rugman, 2005c; Aggarwal et al., 2011). The foregoing paragraphs consequently display alongside six criteria that the selected typologies and classifications not only vary regarding their characterization but also concerning the criteria that can be applied to them in the respect of analysis and discussion. Whereby this illustrates the need for further structuralizing, the findings drawn from the analysis and discussion of selected typologies and classifications are subject to critical (re-) appraisal and evaluation throughout the following section.

2.4.4

Critical (Re-) Appraisal and Evaluation

Building on the analysis and discussion of definitions and concepts, the previous sections serve to outline the operationalization and measurement associated with MNEs in general as well as from a regional and global perspective. While this concerns the understanding of foreign entry and operation modes, the use of key terminology as well as the analysis and discussion of selected typologies and classifications, the review circumscribes the substance and importance of numerous characteristics, or variables, relating to this line of research and focus. While bringing operationalization and measurement thus into line with the characterization from selected typologies and classifications, the previous contents conclusively follow and exemplify the very initial assumption stated whereas there exist more than one type or class of firm. While operationalization and measurement thereby identify MNEs as complex and multidimensional constructs once more, typologies and classifications fulfill the purpose to provide further guidance on the research object under investigation from a theoretical and empirical perspective.98 In this way, the respective types and classes represent an alternative to theorize the yet many-faceted, MNE-related dissimilarities and overlaps and provide additional understanding on the respective (sub-) dimensions available for investigation throughout the use of theoretical concepts and empirical data. As outlined alongside six criteria, previous definitions and concepts of MNE-related subdimensions assist in specifying the alternative foci. Particularly the mutually exclusive and comprehensive groups of classification systems thereby serve as a 98 Concerning the empirical perspective, it is hereby referred to the contents of the typologies and classifications selected, which do not represent a reproduction of all typologies and classifications in the field but in respect to chosen contents that can refer or can apply to the focus of this work, regional and global MNEs.

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distinct solution to reduce and control the complexity associated with regional and global MNEs, whereas the prior analysis and discussion also emphasize that typologies and classifications can be considered for more than firm-level research. The mixture observed throughout the previous sections, especially in relation to scholars’ drive to connect typologies and classifications with strategic or structural insight, reveals that operationalization and measurement deal with more than just pure classification. Whilst the use of relative numbers facilitates manageability and results in the possibility to adopt accurate, unique classes, the consideration of typologies and classification systems is nevertheless substantial in order to provide a realistic representation of MNEs, the respective subdimensions as well as their business activities. In contrast, it is to note that types and classes can thereby only frame a reduced picture of MNE- and subdimension-related complexity, while, furthermore, the characteristics analyzed stand in interdependence, and thus influence, with each other. In this way, the analysis and discussion of characteristics from selected typologies and classifications demonstrate the imperative necessity to consider qualitative and quantitative empirical aspects as part of decisive compositions respectively. Alongside existing research from a meta perspective within this line of research (among others: Harzing, 2000, pp. 102–107; Cerrato and Depperu, 2011, pp. 320– 325)99 , the prior sections and paragraphs conclusively result in the offer of six variables, namely sales, assets, employees, capital, relationships and orientation, for the operationalization and measurement of MNE business activities. While illustrated and outlined in more detail using Figure 2.5, the approach and variables are consequently challenged regarding their appropriate- and usefulness for the operationalization and measurement of regional and global MNEs as follows.

99 See Harzing (2000, p. 102), who refers to seven variables, namely environment/industry, strategy, organizational design, subsidiary strategy, subsidiary structure, control mechanisms and human resource practices, as well as Cerrato and Depperu (2011, p. 321), who describe six variables, namely demand/market side, resources, geographical scope, orientation, networks and financials.

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Foreign/home region assets or subsidiaries to total

Foreign/home region sales to total

Foreign/home region employees to total

Assets

Sales

Employees

MNE

Capital

Relationships

Orientation

Foreign/home region debt, shares or owners to total

Foreign/home region partners to total

Foreign/home region work experience to total

Figure 2.5 Variables for analysis in the context of regional and global MNEs. Source: Own illustration, on the basis of Cerrato and Depperu (2011, p. 321) while adapted for and limited to the use in the context of regional and global MNEs.100

In line with the approach from Subchapter 2.3, sales and assets are referred to as performance characteristics whereas employees represent a structural characteristic. The use of variables based on ratios, such as foreign sales to total sales (FSTS), foreign assets to total assets (FATA) and foreign employees to total employees (FETE), is thereby strongly supported by the respective implementation throughout the literature (among many others: Sullivan, 1994a; Li, 2007). In contrast, the use of capital-related ratios, such as based on debt, shares or owners, is rather unpopular, which as an observation equally applies to the use entropy measures.101 Based on the selected typologies and classifications, relationships and orientation are furthermore identified as substantial components for the operationalization and measurement of MNE business activity. While networks provide a range of opportunities for firms to access resources and competencies (for example: Johanson and Mattsson, 1986; Malnight, 1995; Dimitratos et al., 2003), the prior characterization of typologies shows that a standardized approach for operationalization and measurement of relationships is not yet in sight. Therefore, the display of this variable, especially regarding the possibility 100 See Kutschker and Schmid (2011, pp. 327–339) for an exemplification of (additional) variables in other contexts. 101 See Appendix 7: Analysis for the Use of Selected Measures within the Research Field for more details.

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of differentiation between different depths of market engagements and commitments and, thus, value-chain or business activities, remains problematic. Likewise, orientation as a variable for the operationalization and measurement of MNEs is undergoing various interpretations and consequently in need of further specification, such as concerning the possibility of a geographic perspective.102 While serving the purpose to further reduce complexity associated with the sphere of MNEs as research objects, the variables can conclusively be separated based on the findings drawn from the analysis of typologies and classifications. For the operationalization and measurement from a perspective of regional and global MNEs, sales, assets and employees can therefore be referred to as tier-one variables, whereby capital, relationships and orientation represent tier-two variables. In connection with Figure 2.5, the separation for tier-one and tier-two variables consequently displays that capital, relationships and orientation differ regarding their individual setup, whereas sales, assets and employees, in comparison and based on their wide acceptance throughout discipline and field, can thus be identified as standardizable or standardized measures for regional and global MNEs.103 Concluding from the previous paragraphs’ remarks, especially the classifications and research presented by Rugman and Verbeke (2004a) and Rugman (2005c) and Aggarwal et al. (2011) as well as their respective extensions and sets of data qualify for a further review and the generation of an updated empirical standpoint in relation to regional and global MNEs. While these works prominently emphasize the use of tier-one variables, it is equally observed that these classifications raise further questioning, among others, regarding the number and levels of (sub-) dimensions, the grouping of countries and regions or the thresholds applied. Countries and regions, for example, can be clustered based on a variety of characteristics that include economic, demographic and political aspects but also income- or export-related reasoning (for example: World Bank, 1996, pp. 238–241). International business and international management scholars therefore agree to define regions based on “a grouping of countries with physical continuity and proximity” (Ronen and Shenkar, 1985; Aguilera et al., 2007; cf. Arregle et al., 2009, p. 94), a definition which does not yet precisely provide definitive forward guidance when carrying out assessments of empirical data. 102 This

statement implies possible differences in the definition of the term foreign work experience. 103 In contrast to prior research (for example: Cerrato and Depperu, 2011, pp. 320–323), the present work therefore questions the use of absolute numbers or counts of countries and subsidiaries as meaningful for regional and global MNEs.

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As emphasized throughout the paragraphs beforehand, the critical (re-) appraisal and evaluation brings a close to the analysis and discussion of typologies and classification that relate to the operationalization and measurement associated with regional and global MNEs as well as the respective business activities. Consequently, the following Subchapter 2.5 serves to provide a résumé from the review and assessment of international business theory and MNEs from the perspective of a regional and global subdimension.

2.5

Résumé from the Review and Assessment of International Business Theory

The four previous subchapters review, analyze and discuss international business theory for the generation and from the perspective of regional and global MNEs.104 The consideration of the historical foundation and origin as well as the nature and motives of international business activity from the past decades is thereby essential to outline the reasoning for scholars engaging in an attention-drawing field of research between regional and global imperatives.105 Thereupon, the analysis and discussion of definitions and concepts circumscribe regional and global MNEs as a bias of a multinational dimension. Based on the consensus drawn from the literature, MNEs in general as well as regional and global MNEs are therefore separated from the international and global firm. Furthermore, the analysis and discussion of typologies and classification provide implications for standardization on the operationalization and measurement associated with the business activities of regional and global MNEs as subdimensions of the MNE respectively (Figure 2.6). In comparison to domestic firms, enterprises with business activities in more than one nation or region are subject to substantial challenges regarding their organizational structure and functions (Simon, 1947; Vernon, 1971). Hence, contributions in organizational theory (for example: Blau, 1957) or on the strategy-structure-paradigm (among others: Chandler, 1962; Stopford and Wells, 1972; Egelhoff, 1982) apply a general fit between the structural outline of an organization and its corporate strategy or on the interdependencies among organizational and its (foreign) subsidiaries. Nevertheless, these works consider 104 In

consequence, the present work refers more to concepts for multinationality than to fundamental theorizing, such as connected with institutional or internalization theories in the underlying research field. 105 On the basis of Figure 2.6, the respective contents from these first two subchapters are summarized in this résumé to be both part of an introductory review.

2.5 Résumé from the Review and Assessment of IB Theory

Section(s)

Purpose, focus

99

Details on section(s) and purpose, focus

Introductory review

Review of discourse historical integration and nature, motives for international business activity

Review of prominent works, units of analysis Integration of the MNE’s eminent role as a research object Review of nature, motives facilitating cross-border activity

Conceptualization

Review, analysis and discussion of MNE-related definitions and concepts

Compilation, analysis of more than 100 excerpts related to firm internationality definitions, concepts Application of standardized criteria, characteristics for differentiation using four dimensions (namely international, transnational, multinational, global)

Operationalization and measurement

Review, analysis and discussion of MNE-related typologies and classifications

Characterization, analysis and discussion of regional and global MNE-related heuristic and empirical typologies as well as classifications (and classification systems) Re-appraisal and evaluation of variables applicable for analysis in the context of regional and global MNEs

Figure 2.6 Résumé of the approach for an examination of regional and global MNEs (1). Source: Own illustration.

too few factors in order to establish or support ultimate theorizing (Udy, 1962, pp. 123–125; Turner, 1973, p. 451). Building on this idea, this work applies the analysis and discussion of definitions and concepts as well as typologies and classification as a basic element for the separation of dimensions in the context of firm multidimensionality. Whereby the focus on regional and global MNEs is thus associated with bringing structure to the puzzle observed, the perspective on MNE-related subdimensions also highlights additional outstanding progress within this line of research. Consequently, a next pivotal step concerns reflecting and questioning the research design and methodologies applied for regional and global MNEs throughout the examination of existing standpoints. Within this process, it is necessary to accept, as part of a trade-off, that certain limitations go alongside this implementation. The focus and selection of typologies and classifications provided within the underlying stream of literature represents merely one of these. Based on the validation of existing, ground-building approaches for regional and global MNEs’ operationalization and measurement and in line with consensus previously explicated, necessity exists to provide a review of the studies (empirically and conceptually) associated with this focus of research. The implementation and application of individual, MNE-related subdimensions and their respective cross-border integration thereby also results in the need for a review of the strategic orientation that scholars continuously connect to regional biases, such as home-region orientation (Rugman and Verbeke, 2004a; Rugman, 2005c; Wolf et al., 2012). In line with recent research arguing that MNEs and

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cross-border integration can thereby be subject to waves of change (among others: Mullen and Berrill, 2015; Cuervo-Cazurra et al., 2017; Globerman, 2017; Oh et al., 2019; Jeong and Siegel, 2020), regional and global MNEs conclusively emerge as research objects that require an updated perspective. For the generation of further insight, the way forward consequently considers the literature and data and dealing with regional and global MNEs to provide an overview of the current state of argumentation and the empirical results therewith connected. The contributions that associate home-region orientation with a strategic intent are therefore challenged in order to further legitimate this substantial line of academic research, whilst regional and global MNEs are examined regarding changes over time or in relation to national or regional economic cycles.

3

Regional and Global Multinationals: A Literature Review

“The absence of alternatives clears the mind marvelously.” Henry A. Kissinger (1978)

The present chapter follows the purpose to provide a perspective on regional and global MNEs by reviewing and analyzing the existing body of the literature. To prepare for such a task, debate-related challenges concerning different foundations and theoretical frameworks, varying definitions for an understanding of the applied terminology and changing directions concerning the operationalization and measurement of MNEs as a multidimensional construct are considered within previous contents (Chapter 2). The classification of firms and MNEs thereby emerges as a traditional scientific field (Everitt, 1979, p. 169) and ultimately causes the need to further question the results of its respective empirical address in detail.1 Chapter 3 of the present work consequently follows this path by methodologically approaching the literature on regional and global MNEs, their business activities and classification as well as by discussing theoretical and empirical findings under the consideration of prominent standpoints. The respective literature on classification thereby often refers to MNEs and, more precisely, their business activities as semi-, pro-, largely or dominantly2 1 The classification of firms and MNEs lies in contrast to the question of how organizational or

corporate globalization can be measured, such as exemplified by Kuchinka (2004) or others. or dominance for stakes of 50.0% or greater. As exemplified throughout previous contributions and many sets of data, this represents common practice in field and debate.

2 From an empirical perspective, this work applies the terms dominant

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 C. Czychon, Regional and Global Multinationals, mir-Edition, https://doi.org/10.1007/978-3-658-33737-7_3

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(home-) regional (among many others, for example: Rugman, 2000b; Ghemawat, 2003; Rugman and Verbeke, 2004a; Rugman, 2005c; Dunning et al., 2007; Flores and Aguilera, 2007). Thereby, more recent contributions provide distinct ways forward, develop alternative approaches to investigate the phenomena at hand or consider an increased versatility when findings and implications stem from different sets of underlying data (for all three of the above, see, among others, the examples as follows: Asmussen, 2009; Aggarwal et al., 2011; Vahlne and Ivarsson, 2014; Aguilera et al., 2015; Berrill, 2015; Oh et al., 2019; Jeong and Siegel, 2020). Debates consequently arise from this variety in fundamental, conceptual and empirical standpoints of argumentation (for example: Mudambi and Puck, 2016) that, henceforth and in line with earlier contributions (for example: Buckley and Ghauri, 2004), demonstrate the substantiality of regional and global MNEs for IB and IM scholars, policymakers and managerial practice alike. Under these circumstances, the purpose and aim of the following systematic review process for the literature on regional and global MNEs are threefold. Firstly, the examination of (conceptual and empirical) contributions serves to create an overview of the discourse-related richness that can be associated with MNE classification and provides the opportunity to examine distinct differences in the approaches facilitated throughout the academic community. In doing so, the present work provides a current state of the field’s progress. Secondly, key and detailed findings from existing theorizing and empiricism are considered to outline an extensive picture of the geographic boundaries from MNE business activity that, wherever possible, are reviewed for statics and/or changes in the bias associated with regional MNEs, such as home region-oriented MNEs, and their (global) “counterparts”. Thirdly, the review takes existing implications from prior performance-, strategy- and managerial-linked academic output from the research stream into account and perspective. This process is required to ensure integration and comprehensibility of research gaps delineated and addressed as part of the review at hand. The contents as previously described find division in between four subchapters. In the first subchapter, an introduction to the discourse serves to determine the boundaries for the literature review as conducted. In this process, the methodological approach as technically followed is explained and the characteristics and structure of the literature review are described (Subchapter 3.1). In the second subchapter, prior approaches and studies are reviewed and analyzed to elaborate on accepted, yet separable frameworks connected with regional and global MNEs. In this context, key findings from the review are presented and contributions from the discourse are chronologically

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integrated for further analysis (Subchapter 3.2). The third subchapter deals with the findings from the systematic review and analysis of prior approaches on a more detailed basis. Therefore, distinctly chosen and often debated standpoints, such as the use of different regional groupings, classes and levels of thresholds, contexts and actors as well as multinationality in performance-linked as well as strategic- or managerial-related research, are discussed (Subchapter 3.3). Lastly, the fourth and final subchapter takes the contents from Chapter 3 into perspective to draw conclusions from the review in order to support the definition and formulation of research gaps (Subchapter 3.4).

3.1

An Introduction to the Discourse and Literature Review

Members of the IB and IM research community have shown substantial efforts since the mid of the 20th century to investigate and explain international firm and MNE business activity (for broader recaps, among others, see: Rugman, 1999, 2005d; Glaum and Oesterle, 2007; Seno-Alday, 2010; Rugman et al., 2011; Buckley, 2016b; Hitt et al., 2016). While refuting Levitt’s (1983) article on The Globalization of Markets (Paliwoda, 2001, p. 358), Rugman’s (2000b) monographic work titled The End of Globalization builds upon the concept of Ohmae’s (1985, 1986, 1987) triad (power) and provides a rich set of empirical data to outline the dominance of world FDI and trade from the perspective of its key players, namely the EU, NAFTA and Japan. Rugman (2000b, pp. 114–160) thereby not only backs the importance of these key players for the world market with substantial data, but also combines the use of statistical analysis with firm-level case studies in the automotive, telecommunication or pharmaceutical sector when illustrating that MNE activities are (mostly) performed on an intraregional basis. This approach, which is ultimately followed upon thereinafter (among many others, for example: Rugman and Verbeke, 2004a; Rugman, 2005c; Rugman and Verbeke, 2008a) establishes a change from the consideration and analysis of (foreign direct) investment data relating to (bi- or multilateral) trade agreements towards the examination and explanation of MNE-related, firm-level evidence and cases on (home-) regional and global business activity. Whereas liability of foreignness, transaction cost economics as well as resource- and knowledge-based standpoints emerge as prominent before many different theoretical foundations in the field (Dabic et al., 2014), the shift in the source of data from FDIs to sales or assets from firm annual reporting (to shareholders (ARS); author’s note) is subject to much debate between

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contributing scholars (among others, for example: Cantwell, 1992, pp. 87–99; Stephan and Pfaffmann, 2001; de Backer and Yamano, 2008, pp. 39–40; Beugelsdijk et al., 2010; Rugman and Oh, 2011, pp. 204–206). Together with a continuum of foregoing contributions (for example: Hamel and Prahalad, 1985; Bartlett and Ghoshal, 1989; Morrison et al., 1991), the introduction of a classification and its respective MNE-related biases by Rugman and Verbeke (2004a) and Rugman (2005c) provides superior insights in comparison to prior academic approaches (for example: Hirst and Thompson, 1996, pp. 90–98) and exemplifies how the analysis of firm-level data enables the application of a change in focus from previously seeking a global solution (for example: White and Poynter, 1989; Yip, 2003) towards research in regional MNEs and their business activities. Whilst the dominance of home-region activity in the triad reveals a fresh view on firm-level multiregionality/-regionalization, Rugman and Verbeke’s (2004a) and Rugman’s (2005c) classification and its combination with “ground-breaking evidence” (cf. Oh and Rugman, 2014, p. 108) thus provides the authors with the opportunity to assume that the concept of (economic) globalization can be rendered as meaningless as well as to reconcile with existing research that calls for a need of change in managerial mindsets to think regional, act local and forget global (Doz, 1976, pp. VIII-26; Bartlett and Ghoshal, 1989, pp. 1–17; Rugman, 2000b, p. 18, 2001, p. 11). By using adapted regional groupings or thresholds, various contexts or actors and updated or extended data, many following studies verify or challenge the initial findings by Rugman and Verbeke (2004) and Rugman (2005c) on MNE home-region orientation (for initial, yet broader recaps, see: Oh, 2009; Oh and Rugman, 2014) while other scholars aim for harmonization and explanation when sourcing from different or associated academic fields (for example: Wolf et al., 2008, 2012; Verbeke and Kano, 2012, 2016). Based on the existing research, scholars thereby consequently illustrate that classification can reveal a (dominantly) home region-oriented bias when assessing the business activities of MNEs, which, over time, continuatively fosters the assumption that advantages from an interregionalization of business activity may be somewhat limited on a global scale (Rugman and Verbeke, 2004a, p. 16; Rugman, 2005c, p. 5; Rugman and Sukpanich, 2006; Rugman et al., 2012, p. 230). The classification by Rugman and Verbeke (2004) and Rugman (2005c), which forms this process and qualifies as a substantial challenge to anti-globalization critics (Aharoni, 2006, pp. 445–446; Westney, 2006, p. 447; Burr and Fischmann, 2008, pp. 139–140), therefore created a dominant narrative on the business activities of MNEs. This can easily be demonstrated by drawing directly from the respective authors, who, in line with the data, see the necessity to highlight the term global in a prominent work’s subtitle

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referring to regional and global MNEs (The Regional Multinationals: MNEs and “Global” Strategic Management, for: Rugman, 2005c; author’s note), though business activity is apparently clearly home-regional, or state that “globalization […] does not exist, nor has it ever existed […]” whereby “today’s reality of triad based production and distribution […] will remain the reality long into the future” (cf. Rugman and Moore, 2001, p. 68). Under these circumstances, the hypothesis on home regionality in the context of MNE business activity and classification ultimately leads to a concentration of a previously underestimated issue into the center of debate (Osegowitsch and Sammartino, 2008, pp. 192–193), initiates the examination of home- and host-regional level factors (for example: Enright, 2005; Muller, 2006; Asmussen et al., 2007; Arregle et al., 2009; Li et al., 2010; Heinecke, 2011; Amann et al., 2014; Peterson and Søndergaard, 2014) and serves as foundation for updated research agendas (for example: Beugelsdijk and Mudambi, 2013; Hernández and Pedersen, 2017, p. 142; Nguyen, 2017, pp. 38–39; Nguyen and Kim, 2020, p. 10). With only few works fundamentality succeeding in the attempt to question the home-region hypothesis for business activity and classification as empirically provided over almost two decades (for example: Vahlne et al., 2018), critical approaches are persistent with debate participants from each of the sides providing argumentation for an emphasis or generalization of MNE business activity concentration in the home region (for example: Dunning et al., 2007; Osegowitsch and Sammartino, 2007, 2008; Rugman and Verbeke, 2007, 2008c; Oh et al., 2019; Jeong and Siegel, 2020), the revision and alignment of regional groupings or classes (for example: Delios and Beamish, 2005; Aguilera et al., 2007; Aggarwal et al., 2011; Flores et al., 2013) and the continuative re-visitation or update of data (for example: Oh, 2009; Kolk et al., 2014; Oh and Rugman, 2014; Vahlne and Ivarsson, 2014; Berrill, 2015; Mullen and Berrill, 2015; Vahlne et al., 2018). Thereby, comprehensive reviews as part of the debate are a rare find with many authors accepting the phenomena as previously explicated or focusing on the analysis of individual, debate-related facets, such as the composition of regional groupings, the definition and thresholds of classes or their comparison (for examples, see: Aguilera et al., 2007, pp. 218–219; Seno-Alday, 2009; Aggarwal et al., 2011; Flores et al., 2013, pp. 454–456; Verbeke and Asmussen, 2016; Brennan et al., 2017, 2018; Jeong and Siegel, 2020).3 3 In this case and throughout the following, the works/recaps provided by Khan (2010) and Hii

and Ko (2019) are not fully considered as these publications do not meet all basic requirements associated with best practices from academic research. In addition, the contribution by Rosa et al. (2020) cannot be considered due to the short notice and time of its availability.

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While subsequently following up on this rationale, the direction of the systematic literature review presented hereinafter remains threefold.4 Firstly, the following sections serve to provide state-of-the-art perspectives on the existing methodological variety that is carried out by scholars contributing to the debate on regional and global MNEs and their business activities over time. Secondly, these efforts are closely connected to many sets of empirical evidence that ultimately require consolidation. The existing empiricism and findings are therefore investigated for aligning and contradictory statements or contents. Thirdly, the review presented hereinafter considers nearshoring or associated, yet emerging scientific discourses from the debate to initiate fundamental rethinking in relation to the use of measures from multinationality for performance-linked and strategic- or managerial-related research. Consequently, the focus and directions of this review remain closely related to the following three research questions: 1. How does existing research conceptualize and assess regional and global MNEs? 2. What are empirical results from the assessment of regional and global MNEs? 3. What kind of issues relate to the debated line of research and how can theoretical thinking and (empirical) analytics on regional and global MNEs be advanced?

3.1.1

Methodological Approach for a Systematic Review of the Literature

While the existing body of the literature on regional and global MNEs is examined hereinafter, this section serves to provide explanations, reasoning as well as insight on the methodological approach as implemented for the systematic review.5 With ground-laying publications by Ohmae’s (1985) and Rugman (2000b), the contributions by Rugman and Verbeke (2004a) and Rugman (2005c) kick-off the development of classifications relating to the MNE-related measurement of firm-level multinationality and initiate their extension (for example: Asmussen, 4 Among

others and adding to the research used as follows, see DiMaggio (1995, pp. 393– 396) or Alvesson and Sandberg (2011, pp. 248–251) for further guidance on the process of constructing research questions from existing or prior research. 5 See Appendix 8: Systematic Literature Review on Regional and Global MNEs for all details on the following contents.

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2009; Aggarwal et al., 2011). As outlined throughout the previous paragraphs, the biases therewith connected do not exist as units of analysis before that.6 With regard to the perception of inter- and intraregional business activities, home-region orientation as well as regional and global MNEs (Rugman, 2000b, 2001; Hall, 2001; Paliwoda, 2001; Simmonds, 2001), the beginning of this millennium and the year 2001 can consequently be regarded as a starting point for a review of previous research.7 In the process of the systematic review of the literature, this work follows the selection process recommended and executed by other IB scholars (for example: Jormanainen and Koveshnikov, 2012; Nguyen, 2017; Nguyen and Kim, 2020). To ensure analytical reliability, three steps are consequently implemented in a systematic manner for the period selected while methodologically following Duriau et al. (2007) and Kirca et al. (2011). In a first step, the database Business Source Complete by EBSCO Information Services, a product and division of EBSCO Industries Inc., is defined as the preferred database accessed to search for articles using discourse-related key words, such as home region (orientation), global strategy, or regional MNEs or a combination of these terms respectively.8 In a second step, articles relating to regional and global MNEs from leading journals in the research area of IB, IM and neighboring fields, such as Asia Pacific Management Journal, European Management Journal (EMJ), Global Strategy Journal, International Business Review, Journal of International Management, Journal of International Business Studies (JIBS), Journal of International Management, Journal of World Business, Management International Review, Strategic Management Journal as well as The Multinational Business Review (MBR) and others are carefully examined on an issue-by-issue basis. With reference to guidance provided by The Association of Business Schools (ABS) Journal 6 In this process, the data used for the Templeton Global Performance Index (TGPI) cannot be accessed for verification. 7 The period of selection can consequently be defined as the 2001–2019 period, whilst the 2001–2016 period (serves as an initial period of selection and; author’s note) could be defined as the core period under review. Further contributions relating to regional and global MNEs that emerge thereinafter, such as Brennan et al. (2017, 2018), Vahlne et al. (2018) or Jeong and Siegel (2020) are equally considered within the following contents. These works as well as fundamental contributions on regional and global MNEs from the period before 2001 can thus be considered as part of a widening of the (initial; author’s note) period of selection and contribute to a holistic approach that is generated on the basis of the work at hand. 8 See Appendix 9: Key Words Used for Business Source Complete by EBSCO for all details and combinations. From the viewpoint of some authors, it is thereby argued that the present stream also deals with regional and/or global strategy. The key words are therefore chosen to also include these contributions.

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Quality Guide, VHB-Jourqual and Scimago Journal Rankings, most of these journals are recognized as publication outlets with high impact factors and therefore especially qualify for detailed consideration or review. In a third step, the reference sections of all works from the previous two steps are screened in order to identify contributions on regional and global MNEs that may have been missed or overlooked during prior actions. At the end of this process, all articles from the database and journals are carefully examined.9 Therefore and in line with previous, discourse-affiliated research (for example: Nguyen, 2017, p. 315), titles, abstracts, key words, introductions, conclusions and implications are read. While including conceptual, (empirical) literature reviews and meta-analysis articles, 271 contributions are identified that deal with the debate on regional and global MNEs directly or find entitlement to debate-related issues (on an indirect basis or in a wider sense; author’s note). This number also includes 22 prominent works of fundamental kind that stem from the time prior to the (initial) period selected as well as thirty (30) publications from the years post to the (initial) period selected (2017 through 2020) respectively.10 When deducting the 22 pre-selection period publications from the list of works for further review, a total of 249 contributions are consequently identified from the literature throughout the three-step process. To further narrow the focus on the business activity and classification of regional and global MNEs and the empiricism therewith connected, eight (8) book reviews as well as eight (8) obituaries relating to the achievements of (the late; author’s note) Alan M. Rugman are excluded from the systematic review at this point. Whereas these contributions are taken into consideration for the generation of a holistic view far along, three additional filters are applied to align the selection of contributions for a systematic review of the debate at hand. This process serves to allow for a specified examination of the contributions and their characteristics, which is of assist when deriving guidance for the further structure of this review. The remaining 233 contributions are consequently subject to a more detailed approach of separation, which divides the discourse-related works drawn from the literature in relation to whether they make a direct contribution to the business activity or classification of regional and global MNEs. For each of the redactions applied to the initial set of 233 9 For this process as throughout the entire work at hand, Citavi, a reference management and knowledge organization program by Swiss-based Swiss Academic Software, is used to digitally manage and organize the entire literature available. 10 These thirty publications emerge or are published throughout the process of writing this review or thereinafter.

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contributions selected for review, abstracts, conclusions and implications as outlined by the respective authors are read. These contents are conclusively read up to three more times to filter the selection for overall discourse affiliation (61 contributions, titled Redaction 1 or R1; author’s note), (in-) direct regional and global affiliation (45 contributions, titled Redaction 2 or R2; author’s note), and, lastly, regional and global MNEs (27 contributions, titled Redaction 3 or R3; author’s note). Based on this process, literature that does not (directly) contribute to whether MNEs and their respected business activities are classified as regional and global, such as Qian et al. (2008) or Cerrato (2009), is excluded from systematic review but remains in near reach of the present examination overall. Conclusively, 100 contributions are considered for the review on regional and global MNEs hereinafter (titled R3(C&A); author’s note), whereas at least 73 of these 100 publications withhold empirical data on (different) context and actors and, thus, provide a direct relation to the study of the phenomenon as introduced and now aligned/available for further investigation.

3.1.2

Characteristics and Structure of the Literature under Review

Throughout this section, fundamental insights on the 249 contributions from the non-redacted (full) and the 100 contributions from the redacted literature are provided when examining and outlining the characteristics associated with the research included for review. In addition, the structure applied for the presentation of the findings from the systematic review is explained for the purpose of (forward) guidance. The characteristics from the non-redacted (full) and redacted selection of contributions are therefore assessed in relation to their publication outlet or format, authorship and publication year as follows, which is in line with the practice in previous, debate-related contributions or general, academic recommendation (for example: Acedo and Casillas, 2005; Peng and Zhou, 2006; Booth et al., 2012, pp. 124–137). The contributions considered for the redacted and non-redacted literature are associated with 42 and 70 different outlets or formats respectively. As described using Table 3.1, most contributions from the (redacted/non-redacted) sample stem from journal-based outlets or formats with MBR (14/26) taking the lead, followed by EMJ (11/16) and JIBS (10/29). The contributions in these three outlets amount to more than one third of the total literature considered (35.0%) from the redacted literature (R3), which represents an increase when compared to the stake of these journals associated with the non-redacted (or full) literature.

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This consequently highlights the concentrated knowledge that can be gained from these sources. The seven (7/17) contributions from the Research in Global Strategic Management book series are accompanied by five (5/11) chapters from other collective volumes, titled book chapters, with three (3/10) monographies, namely Rugman (2000b, 2005c) as well as Ghemawat (2007) complementing the contributions that are not journal-based. This evidence clearly illustrates that journal-based outlets dominate for both the redacted and non-redacted samples from the literature. While reflecting a contradiction in comparison to the sample drawn from the literature on MNE-related definitions and concepts in the previous chapter (esp. Subchapter 2.3), this finding strongly indicates that contributions on regional and global MNEs and particularly the regional and global debate in general are more likely to be provided on an article or journal basis. Whereas the difference in the stake of the publication format could be easily connected with the selection period as applied for this systematic review, it can likewise only be hypothesized that this behavior by the individuals holding authorship stems from the fact that research on regional and global MNEs contains a somewhat empirical affiliation that benefits from the manageability and pace of double-blind peer review processes. Table 3.1 Publication outlets or formats on regional and global MNEs by rank (excerpt).11 Rank

Publication outlet or format

Redacted (R3)

Non-Redacted

1

The Multinational Business Review

14

26

2

European Management Journal

11

16

3

Journal of International Business Studies

10

29

4

Research in Global Strategic Management (book series)

7

17

5

Management International Review

6

17

6

International Business Review

5

15

7

Book chapters (or similar)

5

11

8

Monography (or similar)

3

10

9

Global Strategy Journal

3

8 (continued)

11 See

Appendix 10: Literature on Regional and Global MNEs byPublication Format, Outlet for full details.

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Table 3.1 (continued) Rank

Publication outlet or format

Redacted (R3)

Non-Redacted

10

British Journal of Management

2

9

11

Journal of International Management

2

7

68

165

Subtotal Source: Own illustration.

Table 3.2 Authors on regional and global MNEs by rank (excerpt).12 Rank

Author

Redacted (R3)

Non-Redacted

1

Rugman, Alan M.

43

60

2

Oh, Chang Hoon

15

21

3

Verbeke, Alain

9

22

4

Berrill, Jenny

9

9

5

Collinson, Simon

5

6

6

Aguilera, Ruth V.

4

5

7

Osegowitsch, Thomas

4

4

Sammartino, André

4

4

9

Asmussen, Christian G.

3

7

10

Brain, Cecilia

3

3

Flores, Ricardo

3

3

102

144

Subtotal Source: Own illustration.

The 100 contributions from the redacted literature are associated with 92 different contributors holding (co-) authorship. For the non-redacted sample of 249 contributions, this figure increases to 264 individuals. The dominant stake of these contributors (67/194) can only be associated with one contribution, leaving 23 and 70 contributors respectively to be associated with more than one contribution. Table 3.2 provides the data for the ten most contributing authors on regional and global MNEs and their number of contributions from the redacted 12 See Appendix 11: Literature on Regional and Global MNEs by Author, Authorship for full details.

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and non-redacted literature for these individuals. Alan M. Rugman consequently is entitled with (co-) authorship for 43 out of the 100 contributions from the redacted sample, while his stake in contributions decreases for the non-redacted literature. Standalone, these numbers substantially verify and underline the outstanding, remarkable academic role and achievements of Alan M. Rugman, that rightfully find appraisal throughout the discourse and the field of IB and IM in general (among many others, for example: Dunning, 2005; N.N., 2005; Verbeke, 2005; Cantwell, 2014; Oh, 2014; Narula and Verbeke, 2015; Oh and Li, 2015; van Tulder et al., 2015; Verbeke, 2015; Buckley, 2016a; Casson, 2016; Hillemann and Gestrin, 2016) and yet demonstrates how Alan M. Rugman and his co-authors dominate the debate over two decades. As further described on the basis of Table 3.2, the five top-ranked (co-) authors by number of contributions account for 81 out of the total 194 (co-) authorships from the redacted literature. While several existing co-authorships may provide a misleading implication, the data do not necessarily indicate that these contributors hold (co-) authorship for almost half of the contributions. Nevertheless, the data therefore highlight the strong ties of the literature on regional and global MNEs with the respected (co-) authors. At the same time, the data indicate that the (co-) authors from the list with three or more contributions are also entitled to many other works that are closely related to the literature on regional and global MNEs as part of the non-redacted literature. The contributions from these top-ranked authors thereby span across the entire (initial) period selected for review with the year 2002 being the single exception. As described using Figure 3.1, the absolute number of contributions for the non-redacted (full) literature peaks with 24 for two consecutive years in 2007 and 2008. Likewise, the data show a peak (13) for the absolute number of contributions from the redacted sample (R3) in 2007. While the absolute number of contributions consolidates in the 2008–2011 period following thereinafter, the data indicate an additional increase in contributions for the non-redacted (full) literature with a start in 2011. In contrast, the absolute number of contributions for the redacted literature (R3) provides a different picture. While an overlap exists for the increase with a start by 2003 and the consolidation thereinafter, the redacted literature does not experience the second leg of increase for the 2008–2011 period. The data thus suggest to conclude that there exists a momentum and trend where the contributions that are initially identified from the literature with this review are drifting away from its original context and the overall focus of this work, regional and global MNEs, in the 2011–2016 period.

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While the increased usage of standardized buzz or key words in combination with the large amount of literature available from (online) databases may enable or facilitate such an observation, the finding fosters the rationale to consider literature from Redaction 3 (R3) for the following systematic review of the literature on a preferred basis. Consequently, this sample is identified as the core of the literature on regional and global MNEs. As stated within the previous section, at least 73 out of these 100 R3-contributions withhold empirical data on (different) contexts and actors. These contributions are therefore additionally tagged R3(C&A). Using the relative stake of these R3(C&A)-tagged contributions in the non-redacted (full) literature indicates that the overall contributions are nevertheless driven by publications that withhold empirical data on (different) context and actors for the years 2011 and 2012. Based on this measure, it is further possible to identify three prominent waves of contributions to the literature on regional and global MNEs, namely 2003–2005 (1st wave; author’s note), 2007–2008 (2nd wave; author’s note) and 2011–2012 (3rd wave; author’s note). 25

100.0% 90.0%

20

80.0% 70.0%

15

60.0% 50.0%

10

40.0% 30.0%

5

20.0% 10.0%

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Full

R1

R2

R3

R3(C&A)

R3(C&A)/Full (in %)

0.0%

Waves

Figure 3.1 Contributions dealing with regional and global MNEs, 2001–201613 . Source: Own illustration.

For the 2013–2016 period, the data conclusively indicate that the kind of research originally driving the field and representing the core and focus of this work shows a loss of momentum. This observation consequently results in ten-year lows for contributions from the redacted literature by 2016, the end of 13 See

Appendix 12: Literature on Regional and Global MNEs by Year for more details.

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the (initial) period selected for review, and further fosters the previous finding whereas the literature associated with buzz and key words for regional and global MNEs is drifting away from its original context.14 At this point it can only be hypothesized whether or in which ways the contributions from the non-redacted literature are in parts or overall disconnected from the discourse’s origin for the period since 2013 or how these contributions make use of the (regional and global) paradigms as established within prior research. Either way, the data suggest to conclude that the region and global debate is continuous, which strengthens the purpose and mandate associated with this systematic review, but losing momentum based on the number of contributions is identified. As outlined over the previous paragraphs, a large stake of contributions can be tagged R3(C&A) and thus provides insight relating to (different) contexts and actors. Additional tags are thus introduced to implement further structure for the following systematic review of the literature on regional and global MNEs. The articles are therefore analyzed qualitatively (Welch et al., 2011). Firstly, the entire contents of the 100 contributions from the redacted literature (R3) are again read carefully and documented in an excel spreadsheet (for examples, see: Suddaby and Greenwood, 2005; Jormanainen and Koveshnikov, 2012). To support analysis, additional tags are applied on whether the content of a publication makes an actual contribution to (1) regional groupings, (2) classes or thresholds (for example: threshold adaptations, and (3) context and actors; author’s note) or (4) provide a linkage to performance- as well as (5) strategicor managerial-related research. While drawing from the multiple screening of the contributions as previously explicated as well as from existing findings from research and critique on regional and global MNEs (among others, for example: Stevens and Bird, 2004; Osegowitsch and Sammartino, 2008; Aggarwal et al., 2011), the introduction of a total of five tags reflects a structure used for both the purpose of sorting the literature as well as for preparing the review, analysis and discussion of prominent standpoints throughout the next subchapters.

14 For the 2017–2019 period, only six works tagged R3 (C&A) can be identified. These works are complemented by one additional work, namely Jeong and Siegel (2020), from the year thereinafter that is also considered as part of this review.

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3.2

115

Review and Analysis of Prior Approaches and Empirical Results

The 100 contributions selected for the systematic review on regional and global MNEs provide a rich theoretical and empirical foundation for further assessment. Summaries of the findings on home-country/-region orientation and MNE classification from this literature are therefore outlined throughout this subchapter followed by a chronological overview of the 100 studies explicitly exploring regional and global MNEs. The summaries and presentation of findings thereby lay ground to discuss the classifications by Rugman and Verbeke (2004a) and Rugman (2005c) and Aggarwal et al. (2011), hereinafter abbreviated RV and ABHK respectively, as follows. The picture on regional and global MNEs is of course much wider than the results presented in this subchapter may demonstrate. Hence, it is explicitly referred to also consider the contents of the subchapter hereinafter, Subchapter 3.3, and advised that the summarized remarks and findings as well as the chronological overview outlined throughout the following paragraphs do not intend to serve as a rash generalization on the subject matter. In relation to home-country/-region orientation, 46 contributions can be identified amongst the 100 contributions from the redacted literature explicitly dealing with regional and global MNEs that provide transfer-/adoptable data on foreign-to-total (FTT) and/or home-region-to-total (HRTT) measures. These data are overall available from the literature regarding the years 1980, 1991 (see Rugman, 2007, 2008), the 1995–2012 period (various contributions; author’s note) and 2016 (see Vahlne et al., 2018). 38 of these contributions thereby apply HRTT measures to their overall sample, whereas the four (4) contributions are limited to a triad-based split only. Data on HRTT measures from a triad perspective are thereby considered within 18 contributions that sample firms with headquarters in North America or NAFTA (titled HRTT (NAFTA); author’s note), 20 contributions with firms from Europe or the EU (titled HRTT (Europe); author’s note) and 21 contributions with firms headquartered in Asia or Asia-Pacific (titled HRTT (Asia-Pacific); author’s note). For home-country orientation and FTT measures, that do not reflect the (primary) focus of this work, 21 contributions can be identified.15

15 An analysis of home-country orientation is equally provided throughout the following paragraphs. Transfer- and adoptability of data is given if the data can be accessed and analyzed using a standardized format. Some contributions, such as Jeong and Siegel (2020), present/outline their data from a distinct perspective. Though explicitly dealing with regional and global MNEs, the data are therefore not necessarily available for transfer and analysis using the standardization applied.

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Focusing on home-region orientation, 21 of the 42 contributions previously stated offer firm samples with data on HRTT measures for more than one financial year. Three (3) contributions provide pooled data on HRTT measures only (see Verbeke and Brugman, 2005; Sethi, 2009) and another two contributions provide HRTT measures regarding exports. These data are not considered for the review to follow. Altogether, the contributions from the literature thus provide data on HRTT measures for a total of 253 sets of sampled data (titled datasets; author’s note) available for review (Figure 3.2). Throughout these datasets, HRTT measures are provided for either or both the overall sample as well as distinct triad perspectives, whereas for six (6) datasets HRTT measures are thereby limited to a triad or regional perspective only. Separate splits on HRTT measures are thereby available for North America or NAFTA (25 datasets), Europe or the EU (40 datasets) and Asia or Asia-Pacific (28 datasets). While referring to the dataset year but not the publication date, Figure 3.2 illustrates the number of HRTT datasets that can be identified from the literature spreading across 18 different calendar years. For the 253 HRTT datasets that are available on a sampled basis from the literature for the years 1991, 1996– 2012 and 2016 period, data availability in terms of sampled financial data clearly peaks over the 2000–2008 period with a 5-year mean of 33.4 in 2005.16 For all other calendar years for which HRTT data are available, namely 1980, 1991, 1996, 1998–1999, 2009–2012 and 2016, the 42 contributions17 provide less than 5 HRTT datasets per calendar year. With nine (9) calendar years (2000–2008) only, the data consequently indicate that an overwhelming majority of the datasets available from the discourse, specifically 93.2% or 236 of the 253 datasets, stems from a comparably short, very limited time period. Whilst this result generally supports the idea of the existence of a wave or waves regarding the literature on regional and global MNEs, the datasets available clearly indicate that — though disregarding the output from this research at this point in time — the academic discourse is clearly imbalanced due to the immense amount of datasets connected to the 2000–2008 period. For the 38 contributions with data on HRTT measures considered, data are available based on sales, assets, affiliates, employees or income. The dominant part of the data on HRTT measures thereby stem from sales, which accounts for 16 For some years stated, HRTT data relate to exports. As mentioned, the data are not considered for calculation or illustration. 17 The total of 42 contributions includes three contributions that consider pooled or export data.

3.2 Review and Analysis of Prior Approaches and Empirical Results

117

Figure 3.2 HRTT datasets available from the literature, 1991–2016. Source: Own illustration.

54.5% or 138 of the 253 datasets considered. An additional noteworthy proportion of data stem from assets (36.0% or 91 datasets), while data on affiliates (6.7 percent or 17 datasets), employees (2.0% or five datasets) or income (0.8% or two datasets) are of limited substance. On broader terms, data are conclusively available and provided for HRTT measures on sales and, partly, assets, whereas data availability from the literature is limited for affiliates and especially employees or income. With the number of datasets available per calendar year and their basis varying throughout the existing research and literature, it could be misleading to provide consolidated or cumulative results on HRTT measures from the discourse as part of this review. Likewise, the size in terms of a firm count or the sources of the datasets are so far not taken into consideration for the review of HRTT measures and could yet present another factor of consideration in the process of further interpreting the findings from this review. The summary from the datasets on home-region orientation/HRTT measures is therefore presented as an indication on overall discourse-related findings that may be in the need of further separation when drafting or generating implications in detail (Figure 3.3 and Figure 3.4). For the 1990–2016 period, Figure 3.3 and Figure 3.4 consequently illustrate the results from the analysis and review of 38 contributions on regional and global MNEs in relation to home-region orientation or HRTT measures with a breakdown by the source of data for measurement (Figure 3.3) or based on the triad key players (Figure 3.4).18 For the datasets available that include HRTT 18 The data available Rugman (2007, p. 81) and Rugman (2008, p. 31) for 1980 and other years are based on exports but not firm sales and may thus not provide an accurate representation of regional and global MNEs or HRTT measures.

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100.0

90.0

80.0

70.0

60.0

50.0 1990

1995

2000 Sales

Assets

2005 Affiliates

Employees

2010

2015

Income

Figure 3.3 Results from the review of home-region orientation (1). Source: Own illustration.

100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 1990

1995

2000 Asia-Pacific

2005 Europe

North America

Figure 3.4 Results from the review of home-region orientation (2). Source: Own illustration.

2010

2015

3.2 Review and Analysis of Prior Approaches and Empirical Results

119

measures based on sales, assets, affiliates, employees or income (Figure 3.3), home-region orientation thereby ranges from highs of 93.1% in 2004, 2007 and 2008 (Rugman and Li, 2007; Almodóvar, 2011) to a low of 54.5% in 2002 (Rugman and Brain, 2004a). Without weighing for sample size, the means for each year of the 2000–2008 period thereby range from as high as 77.2% in 2004 to 74.6% in 2007. Taking into consideration all datasets available with overall HRTT data19 , the mean for home-region orientation is 75.4%. For the datasets available that offer HRTT measures from a triad perspective (Figure 3.4), home-region orientation ranges from a high of 97.3% in 2000 for data with firms from North America or NAFTA (Rugman and Girod, 2003) to a low of 35.9% for a dataset of (mostly) Swedish MNEs (Vahlne et al., 2018). In decreasing order and including the limitations as previously explicated for this high-level data from the contributions under review, the means on home-region orientation from a triad perspective are 78.5% for North America, 77.0% for Asia-Pacific and 69.2% for Europe.20 Based on the data from the existing literature on regional and global MNEs, the business activities of the firms sampled throughout the discourse are conclusively strongly and dominantly intraregional. Whereby seemingly only few if at all a merely handful of exceptions thereby exist (for example, see: Vahlne et al., 2018), the data provided suggest that home-region orientation is lower for European MNEs. Likewise, it is exemplified that the extensive amount of data from these contributions requires further review and analysis. Focusing on home-country orientation and FTT measures, data are available from the 1990–2013 period as well as the year 2016. A total of 218 datasets are thereby provided with the majority of these based on sales (68.3% or 149 datasets), a noticeable proportion available for assets (22.5% or 49 datasets) and limited data in relation to affiliates (7.3% or 16 datasets), employees (1.4% or three datasets) or income (0.5% or one dataset). As illustrated using Figure 3.5, FTT measures thereby range from lows of 17.8% in 2000 (Rugman and Girod, 2003) and 18.0% in 2001 (Rugman, 2003a) to highs of 81.0% in 2010 and 84.0% in 2016 (Vahlne et al., 2018). Throughout the 1996–2012 period, the means for FTT measures increase from a 21.5% in 1997 to 42.2% in 2012. Based on the 218 different samples available, the aggregation of the datasets 19 For clarification, this means datasets that to do not separate for key players, such as AsiaPacific, Europe or North America. 20 Due to the richness of the data herewith associated, it is hereby referred to the appendices of this work for further insight.

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from the contributions on regional and global MNEs conclusively demonstrates that home-country orientation is noticeably decreasing over time. The data from FTT and HRTT measures thus indicate that the firms from these samples internationalize with their regions. 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 1990

1995

2000

Sales

Assets

2005

Affiliates

Employees

2010

2015

Income

Figure 3.5 Results from the review of home-country orientation. Source: Own illustration.

In relation to the classification by Rugman and Verbeke (2004a) and Rugman (2005c), 33 contributions can be identified amongst the 100 contributions that provide data on the classification of a total of 33,827 firm years (titled total firms classified; author’s note).21 This number is reduced by 195 firms classified where the year is either not explicitly stated (101 firms classified, see: Moore and Rugman, 2003; Rugman, 2004; titled not stated; author’s note) or pooled over several financial years (94 firms classified, see: Verbeke and Brugman, 2005; Filippaios and Rama, 2008; titled pooled; author’s note) leaving a total of 33,632 firms classified that can be drawn from 29 contributions.22 The 21 The total of 32,063 firms classified partially includes supposedly equal data published within different outlets or formats. 22 This figure partially includes supposedly equal data that published within different outlets or formats as well.

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121

different datasets that serve as sources for this number of total firms classified offer data from the 1991–2012 period (various contributions; author’s note). The longest periods are sampled by two contributions, namely Mullen and Berrill (2015) and Brennan et al. (2017) for the 1998–2012 and 1991–2010 periods respectively, whereas another eight (8) contributions provide classification results for more than one financial year. Vice versa, the contributions dominantly consider data for a single year only. As described using Table 3.3, 85.0% or 28,575 of the 33,632 total firms classified are home region-oriented, 4.3% or 1,456 are host region-oriented, 8.0% or 2,702 are bi-regional and 2.7% or 899 are global MNEs throughout these 29 contributions.23 The data from research on regional and global MNEs thus strongly indicate that home region-oriented MNEs are dominant within the 1991–2012 period. Table 3.3 further indicates that the data for the 33,632 total firms classified throughout these contributions stem from sales (82.3% or 27,674 total firms classified), which is complemented by a noticeable proportion from assets (13.9% or 4,660 firms classified) and very limited substance from affiliates (3.8% or 1,279 firms classified), employees (10 firms classified) or income24 (9 firms classified). The breakdown by the source of data for measurement consequently indicates that the results from the literature on MNE classification and home-region orientation are dominantly triggered by sales data.25 Table 3.3 Results from the review of classification on regional and global MNEs. Home-region oriented Sales Assets Affiliates Employees Income Total

23,594 4,222 747 8 4 28,575

85.3% 90.6% 58.4% 80.0% 44.4% 85.0%

Host-region oriented 1,097 136 222 1 0 1,456

4.0% 2.9% 17.4% 10.0% 0.0% 4.3%

Bi-regional 2,261 236 199 1 5 2,702

8.2% 5.1% 15.6% 10.0% 55.6% 8.0%

Total firms classified

Global 722 66 111 0 0 899

2.6% 1.4% 8.7% 0.0% 0.0% 2.7%

27,674 4,660 1,279 10 9 33,632

82.3% 13.9% 3.8% 0.0% 0.0% 100.0%

Source: Own illustration.

Table 3.4 consequently provides the results from the review of the literature on regional and global MNEs related to the classification system by Rugman and Verbeke (2004a) and Rugman (2005c) in relative and absolute terms under the 23 The relevant breakdowns by data, financial year or both are provided within the appendices, titled classification analysis. 24 In the underlying cases, income is defined as net income, pre-tax earnings or similar. 25 Additional details are provided throughout this and the subchapter hereinafter.

2002 86.8

2003 87.0

2004 86.2

2005 84.1

2006 84.4

2007 82.8

2008 81.5

2009 80.6

21

26

1.6

103

6.4

56

3.5

114

2.2

349

6.8

176

3.4

28

1.6

124

7.2

77

4.4

48

2.7

124

6.9

61

3.4

48

2.6

139

7.5

69

3.7

72

2.9

222

9.1

95

3.9

47

2.6

167

9.3

67

3.7

56

3.2

177

10.0

70

4.0

61

3.5

189

10.8

73

4.2

45

3.7

126

10.4

64

5.3

46

3.8

118

9.7

76

6.3

976

80.3

2010

44

3.9

121

10.8

59

5.3

892

79.9

2011

47

4.2

113

10.2

63

5.7

884

79.9

2012

26 As previously stated, errors in sums may occur due to rounding for this as well as for other figures and tables provided. The firms classified throughout the 1998–2012 period sum up to a total of 26,860 firms classified, which adds ups to the total of 26,674 firms available for classification based on sales from Table 3.1 when complemented by a total of 814 firms classified on a sales basis for the 1991–1998 period.

1,369 1,604 5,124 1,732 1,788 1,858 2,452 1,799 1,762 1,743 1,214 1,216 1,116 1,107

12

976

1.5

80

51

1.2

5.8

5.2

33

23

Source: Own illustration.

Total

Global

Bi-regional

2001 87.5

1,235 1,419 4,485 1,503 1,555 1,602 2,063 1,518 1,459 1,420 979 2.4

2.4

890

2000 88.5

3

Host region-oriented

90.2

1998 1999

Home region-oriented 91.2

Classification

Table 3.4 Results from the review of regional and global MNEs (sales data).26

122 Regional and Global Multinationals: A Literature Review

3.2 Review and Analysis of Prior Approaches and Empirical Results

123

consideration of sales data only. The number of firm observations is thereby driven by data for the year 2001, which account for 5,124 total firms classified. Over the 15-year, 1998–2012 period for which data are consecutively available from more than one sample, the stake classified as home region-oriented ranges between a high of 91.2% in 1998 and a low of 79.9% in 2012. The mean is 84.7% for that same period. While the review consequently indicates that regional and global MNEs are dominantly home region-oriented, the data also show that the stake for home region-oriented MNEs decreases 11.2% by 2012. Host region-oriented MNEs increase 2.8% to 5.7%, bi-regional MNEs increase 5.5% to 10.2% and global MNEs increase 3.0% to 4.2% in that same period. Using the sales data from Table 3.4, Figure 3.6 illustrates the results from the review of the literature on regional and global MNEs for the classification by Rugman and Verbeke (2004a) and Rugman (2005c) while taking the sample size for each year and class into consideration. It is thereby noteworthy that two vertical axes are applied for the purpose of scaling the large difference in results on firms classified as either home region-oriented or host region-oriented, bi-regional and global. For firms classified as home region-oriented, center points are added to indicate the exact location of the data. Conclusively, a slight decline in firms classified as home region-oriented can be observed over period spanning from 1998 until 2012.

Figure 3.6 Results from the review of regional and global MNEs (sales data). Source: Own illustration.

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In line with these findings, Table 3.5 consequently provides a chronological overview of the 100 contributions from the literature on regional and global MNEs. Due to the many differences connected with this research, an emphasis is considered that focuses on distinctly chosen aspects or facets, such regional splits, measures applied, samples examined and sources accessed as well as findings and contributions, or summarizes otherwise considerable and noteworthy contents by the respective authors regarding regional and global MNEs.27 The contributions from Table 3.5 are addressed in more detail throughout the following paragraphs to further explicate the chronological overview of research on regional and global MNEs. In this process, the existing frameworks for classification by RV and ABHK and the empirical results therewith connected are considered to establish a deepening understanding on discourse-related overlaps and dissimilarities. Furthermore, the contributions narrating and surrounding this classification-providing research find integration when outlining the existence of consistent and contradictory standpoints respectively.

27 Throughout this process, a focus is provided on regional and global MNEs and the respective firm-level data. Therefore, FDI data, for example such as provided by Rugman and Doh (2008, p. 27), is not considered for review and analysis.

Rugman (2000b)

Rugman and Hodgetts (2001)

Rugman and Girod (2003)

Rugman (2003a)

Rugman and Verbeke (2003b)29

1

2

3

4

5

North America/Europe/Asia-Pacific

Retail: EU/NAFTA/JP Banks: US & CA/EU & CH/JP & AU

NAFTA/EU & Europe/JP & Asia

NAFTA/Asia/EU

North America (US & CA)/Asia (JP)/Europe

Regional split(s)

Measure(s)

FSTS, HRSTS

FSTS, FATA

FSTS, RSTS, stores

World trade exports, sales, stores

FSTS, FATA, HRSTS, TNI, FDI

Sample(s); source(s)

Finding(s); contribution(s)

Retailers and banks are mainly triad-based, home-regional MNEs

MNEs are dominantly intraregional and domestic, not global

Mixture of world trade exports and cases shows MNE-based intraregional bias

Trade volumes (exports; author’s note) and FDI are intraregional

(continued)

366 Fortune Global 500 MNEs are home firms, 2001 region-oriented, not global

49 Fortune Global 500 retail firms, 2000; 26 TGPI multinational banks, 2001

49 Fortune Global 500 retail firms, 2000

Ten cases: Philips, Matsushita, IKEA, Kingfisher, Nokia, Ericsson, Nortel, P&O, Unilever, Procter & Gamble

Fortune Global 500 firms, 1998; sources: IMF, 1999; UNCTAD, 1999, and may others; industry-based cases

29 Conference

contribution (incl. minor differences; author’s note), supposedly a draft of Rugman and Verbeke (2004a).

28 The research from the table is listed by publication date with all data available from the appendices. Classification-providing research by Rugman and Verbeke (2004a) and Rugman (2005c) and Aggarwal et al. (2011) is emphasized.

Author(s)

#

Table 3.5 Chronological overview for the research on regional and global MNEs.28

3.2 Review and Analysis of Prior Approaches and Empirical Results 125

Author(s)

Rugman and Brain (2003)

Rugman (2003b)

Rugman (2003c)

Rugman and Verbeke (2003c)

Moore and Rugman (2003)

Rugman and Brain (2004a)

#

6

7

8

9

10

11

Table 3.5 (continued)

Regional split(s)

North America/Europe/Asia-Pacific

US/EU/JP

FSTS, HRSTS

HRSTS

FSTS, HRSTS

FSTS, HRSTS

FSTS, HRSTS

FSTS, FATA, FPTP

Measure(s)

Sample(s); source(s)

Finding(s); contribution(s)

World economy is a triad one with home regional, not global MNEs

MNEs are dominantly home region-oriented

US MNEs are dominantly home regional

MNE triad activity is dominantly home regional

(continued)

7 Chemical, 12 Pharmaceutical MNEs are Pharmaceutical Fortune dominantly home Global 500 firms, 2002; region-oriented six cases: GlaxoSmithKline, AstraZeneca, Merck, Pfizer, Eli Lilly, Aventis

25 Largest US Fortune Global 500 firms, data info not stated

20 Most International UNCTAD World Investment Report firms, 2001; sources: ARS

365 Fortune Global 500 MNEs are intraregional in firms, 2001; cases: sales, with the home region Wal-Mart, Eli Lilly, being dominant DaimlerChrysler

50 Largest BRG firms, 2001; 365 Fortune Global 500 firms, 2001

Top 20 World’s Most International Fortune Global 500 firms, 2000

3

North America/EU & Europe/JP

Asia (JP)/EU/North America

North America/Europe/Asia-Pacific

NAFTA/Europe/Asia-Pacific

126 Regional and Global Multinationals: A Literature Review

Rugman (2004)

Stevens and Bird (2004)30

Rugman and Collinson (2004)

Rugman and Brain (2004b)

13

14

15

16

Regional split(s)

HRSTS

FSTS, HRSTS

Measure(s)

Finding(s); contribution(s)

100 Largest firms, data year not stated

Major trend: intraregional trade increases in triad blocs

365 Fortune Global 500 MNEs are dominantly home firms, data for 2001; regional with a sales average sources: BRG of 80% in the home region

Sample(s); source(s)

North America/Europe & Other Europe/Asia-Pacific & Asia

North America/Europe/Asia & Asia-Pacific

FSTS, HRSTS, bank accounts, deposits

FSTS, HRSTS, assets, production capacity, units delivered

No evidence of global products, solely regional production, intraregional sales are dominant; sub-regional clusters dominate MNE geography

(continued)

40 Banking Industry, Banking industry and financial 27 Financial Service service MNEs operate on a Fortune Global 500 home regional basis firms, 2001; cases: Citigroup, Deutsche Bank, Bank of America, Crédit Suisse, JP Morgan Chase

29 Automotive Fortune Global 500 firms, 2001; cases: General Motors, Volkswagen, Toyota, DaimlerChrysler, Honda, Ford, Premier Auto Group, Renault and Nissan

Six responses (definition of terminology and regions, line of argumentation, measures, data and data interpretation, culture and contexts) to Rugman (2003b), whereas globalization is alive and well.

EU/NAFTA/Asia

North America/Europe/Asia-Pacific

others, Stevens and Bird (2004) do not provide empirical data but commentary or critique relating to prior research.

Rugman and Verbeke (2004a)

12

30 Among

Author(s)

#

Table 3.5 (continued)

3.2 Review and Analysis of Prior Approaches and Empirical Results 127

Delios and Beamish (2005)

Grosse (2005)

Rugman (2005c)

Rugman and Collinson (2005)

18

19

20

21

NAFTA/EU/Asia-Pacific

North America/Europe/Asia-Pacific

Measure(s)

Sample(s); source(s) Eleven leading Chinese firms, Top 100 Foreign Exporters in China, 2003; sources: Chinese Ministry of Commerce

HRSTS

FSTS, HRSTS (among others; author’s note)

Branches or offices, income

Finding(s); contribution(s)

Financial institution income is intra- or bi-regional

Prevalence of home-regional MNEs that persists over time

Asia-based firms dominate the foreign exporters in China; expansion by Chinese firms is a regional, with domestic ties

119 European Fortune European MNEs are Global 500 firms, 2001; dominantly home cases: Carrefour, region-oriented TotalFinaElf, Deutsche Bank, Nokia, Philips, GlaxoSmithKline, L’Oréal, Diageo, AstraZeneca (continued)

365 Fortune Global 500 MNEs are dominantly home firms, 2001; 60 Top region-oriented, not global; Intraregional Sales no change 2001–2002 Fortune Global 500 firms, 2001–2002; sources: ARS, web pages; several cases

Ten financial institutions, 2002; sources: ARS; cases

FBTB, HRBTB; 1,229 Japanese firms, among others: 2000; various national R&D intensity sources and databanks

FDI, Chinese sales by foreign MNEs

3

US/Europe/Japan/Other Asia/Elsewhere

Asia/Africa/Europe/the Middle East/North America/Oceania/South America

Yin and Choi (2005) Domestic (CN)/Asia; JP/US/EU (and regional splits; author’s note)

17

Regional split(s)

Author(s)

#

Table 3.5 (continued)

128 Regional and Global Multinationals: A Literature Review

Verbeke and Vanden Asia-Pacific/Europe/North America/South Bussche (2005) America

Rugman and Dossett (2005)

Oh and Rugman (2006)

Rugman and Collinson (2006)

23

24

25

26

Regional split(s)

Verbeke and Brugman (2005)

22

North America/Europe/Asia-Pacific

Europe/America/Asia

North America/Europe/Asia/South America

US/EU/Asia/Other

Author(s)

#

Table 3.5 (continued) Measure(s)

Sample(s); source(s) 13 Automotive Fortune Global 500 firms, 1998–2003

FSTS, HRSTS

HRSTS, HRATA

FSTS, HRSTS

75 Large Asia-Pacific Fortune Global 500 firms, 2001; cases: Sumitomo Chemical, Nippon Steel, NEC, Toyota, Nissan, Honda, Canon

100 Cosmetics firms, sources: ARS, Worldscope, Compustat, 2003; cases: Avon, Gucci

Cases: Wal-Mart, Carrefour; sources: ARS, 2001 & 2004

Global 34 Firms or airlines, alliances, possibly more, operation modes engaging in global alliance groupings across regions, data year not stated

HRSTS (average; author’s note), operating income

Finding(s); contribution(s)

(continued)

Asia-Pacific MNEs are dominantly home regional

Using sales and assets, cosmetic firms are dominantly home regional

Wal-Mart and Carrefour are home regional

Global strategic alliances are used for MNEs to operate in host regions/markets

There is no global automotive carmaker, 7 are home region-oriented and 6 are bi-regional MNEs

3.2 Review and Analysis of Prior Approaches and Empirical Results 129

Dunning et al. (2007)

Rugman and Verbeke (2007)31

Oh and Rugman (2007)

Hejazi (2007)

Collinson and Rugman (2007)

27

28

29

30

31

Regional split(s)

Measure(s) Sales, assets, employment, TNI, FDI, GI, GDP, RICA

Sample(s); source(s) Among others: degrees of transnationality of the 100 Largest Non-Financial firms; sources: UNCTAD, IMF, OECD, World Bank

Finding(s); contribution(s) Macro-data confirms micro-data contained in Rugman (2000b) and Rugman and Verbeke (2004a)

Asia-Pacific/Europe/North America

North America/Europe/Asia-Pacific

Asia (JP)/Europe/America

HRSTS, HRATA

HRSTS, net income, HRATA, HRETE

Operating modes, market penetration

115 (122) Asian Fortune Global 500 firms, sources: ARS, 2004

US Non-Bank firms, data from the US Bureau of Economics, 2000

95 Cosmetics firms, sources: ARS, Worldscope, Compustat, 2003; cases: Avon, Gucci

(continued)

Intraregional dominance for sales and assets

Activities of US Non-Bank MNEs are home regional, driven by a national dimension

Home-regional MNEs’ market penetration and operating modes differ from those in foreign regions

Conclusions provided on prior empirical research: (1) MNE business activity appears to be rather intra- than interregional; (2) MNE operations are organized at the regional rather than the global level. Issue methodologically arising from the use of macro data: no firm (or data) selection process.

Americas/Europe/Asia/Other; selected countries

3

31 The article by Rugman and Verbeke (2007) reflects a response to a previous contribution by Dunning et al. (2007). There are more arguments considered, which do not necessarily relate to regional and global MNE classification directly.

Author(s)

#

Table 3.5 (continued)

130 Regional and Global Multinationals: A Literature Review

Author(s)

Rugman (2007)

Osegowitsch and Sammartino (2007)

Rugman and Oh (2007)

Rugman et al. (2007)

Ghemawat (2007)

#

32

33

34

35

36

Table 3.5 (continued)

Europe/Americas/Asia & Oceania/Eastern Europe/the Middle East/Africa

North America/Europe/Asia-Pacific

North America/Europe/Asia

North America/Europe/Asia-Pacific

NAFTA/EU/JP

Regional split(s)

(International) Trade

HRSTS, ROFA

FSTS, FATA, HRSTS, HRATA

FSTS, HRSTS, ROR

HRSTS

Measure(s)

Finding(s); contribution(s) World economy is a triad one, MNEs provide data on regional pattern of economic activity

Intraregional trade, 1958–2003; sources: UN International Trade Statistics Yearbooks

27 UK Fortune Global 500 firms, 2001; with data from Rugman (2005c); for financial performance: 210 UK MNEs; different sources

(continued)

Intraregional trade has more influence than interregional trade on the large, postwar increases in international trade; nearshoring

UK MNEs are dominantly home regional

Up to 386 Fortune For sales and assets, MNEs Global 500 firms, listed operate on an intraregional in 2002, sources: ARS, basis, no change over time 2001–2005

159 Fortune Global 500 Data for 1991 and 2001 show firms from Rugman’s a decrease in HRSTS overall 2001 snapshot; sources: Datastream, with data for 1991, 1996, 2001

Intraregional exports for NAFTA, EU and JP for 1980, 1997 and 2000, 366 Fortune Global 500 firms, 2001; sources: IMF, BRG

Sample(s); source(s)

3.2 Review and Analysis of Prior Approaches and Empirical Results 131

Rugman and Li (2007)

Aguilera et al. (2007)

Flores and Aguilera (2007)

Rugman and Oh (2008b)

37

38

39

40

Regional split(s)

HRSTS, HRBTB, HRETE

Direct CI (dependent variable), among others

EU/JP/North America/Outside the triad32

North America/Europe/Asia/Unidentified; North America/Asia/Europe/ROW

CI

HRSTS, FDI, among others

Measure(s)

Europe/US/JP; EU/North America/Asia-Pacific; also: main trading blocs

North America/Europe/Asia/Unidentified

Sample(s); source(s)

Finding(s); contribution(s)

Twelve and eleven Korean Fortune Global 500 firms, 2001, 2004, 2005; data from Rugman (2005c), sources: Directory of Korean Firms in Foreign Countries, ARS

100 Largest Fortune Global 500 firms, 1980 & 2000; sources: Directory of American Firms Operating in Foreign Countries

100 Largest US Fortune Global 500 firms, 1980 & 2000; sources: Directory of American Firms Operating in Foreign Countries

(continued)

Korean firms are dominantly home regional

Firms geographically expanded international capital investments, also beyond triad regions

Review of terminology, conceptualization and application on regions; data show CI increase for Asian European locations

Eight Chinese Fortune Chinese firms are dominantly Global 500 firms; home regional or domestic sources: ARS with data for 2004

3

32 Flores and Aguilera (2007, p. 1190) apply different regional groupings to their data and uncover internationalization patterns using a fine-grained categorization of regions offered by the United Nations; for more information, see as follows: https://unstats.un.org/unsd/methodology/m49/.

Author(s)

#

Table 3.5 (continued)

132 Regional and Global Multinationals: A Literature Review

Osegowitsch and Sammartino (2008)

Rugman and Verbeke (2008c)

Filippaios and Rama Africa/Asia/EU-15 & ROE/North & Latin (2008) America/Oceania & ROW

Rugman (2008)

42

43

44

45

Regional split(s)

Collinson and Rugman (2008)

41

NAFTA/EU/JP

North America/Europe/Asia-Pacific

North America/Europe/Asia-Pacific

North America/Europe/Asia or Asia-Pacific (unclear)

Author(s)

#

Table 3.5 (continued) Measure(s)

HRSTS

HRBTB

FSTS, FATA, HRSTS, HRATA; ROS, ROA, Tobin’s Q

HRSTS

FSTS, FATA, HRSTS, HRATA

Sample(s); source(s)

Finding(s); contribution(s)

Firms expand in their home regions; for sales, assets, intraregionality is dominant and steady

MNE home regionality as outlined is overstated, longitudinal data show substantial HRSTS decrease

Exports for NAFTA, EU and JP for 1980, 1995 and 2004, 365 Fortune Global 500 firms, 2001; sources: IMF, ARS

(continued)

The overall picture is one of home regionality, not global reality

81 Food and beverage F&B MNEs are rather home (F&B) MNEs, 1996 & regional than global 2000 (pooled); sources: AGRODATA

Between 259 and 329 Fortune Global 500 firms, 2002, with data for 2001–2005; sources: ARS of each firm

198 Fortune Global 500 firms from Rugman’s 2001 snapshot; sources: Datastream, with data for 1991, 2001, 2006

64 Japanese Fortune Japanese firms are dominantly Global 500 firms, 2003; home regional based on data data sources not stated; for sales and assets cases: Sumitomo Chemical, Nippon Steel

3.2 Review and Analysis of Prior Approaches and Empirical Results 133

Rugman and Oh (2008c)

Wolf et al. (2008)

Rugman and Verbeke (2008a)

Rugman and Oh (2008a)

46

47

48

49

Regional split(s) HRSTS, HRATA, among many others: GDP

Measure(s)

Sample(s); source(s) Fortune Global 500 firms, 2000–2006; 40 Emerging Market Fortune Global 500 firms, 2006; sources: ARS and Rugman and Oh (2007)

Finding(s); contribution(s) Asian and Emerging Market firms are dominantly home regional, achieve international competitiveness through intraregional sales

North America/Europe/Asia-Pacific

EU/North America/Asia-Pacific

HRSTS, HRATA

HRSTS, HRATA

50 Largest Foreign Fortune Global 500 firms in North America, 2006; Fortune Global 500 firms, with data for 2000–2006; sources: ARS

Between 358 and 529 Fortune Global 500 firms, 2000–2006; sources: ARS, 2000–2006

(continued)

Globalization does not exist, intraregional sales and assets are steady, strong home regional effect as compete at home with other US MNEs

Service and manufacturing firms33 operate mainly within their home region of the triad

Based on nine propositions, theories from economics, business administration, psychology and sociology are employed to explain MNE home-region orientation. Among others, home-region orientation stems from firm-, industry- and home region-specific factors, which, because of political, economic and psychological influence, shape MNE characteristics. In consequence, MNEs from different home regions are likely to have different tendencies on home-region orientation.

North America/Europe/Asia-Pacific

3

33 See Rugman and Verbeke (2008a), for further insight and data on the differences associated with the average percentage of sales and assets in the home region for services and manufacturing listed Fortune Global 500 firms, 2000–2006.

Author(s)

#

Table 3.5 (continued)

134 Regional and Global Multinationals: A Literature Review

Author(s)

Asmussen (2009)

Oh (2009)

Peng and Pleggenkuhle-Miles (2009)

Sethi (2009)

Rugman et al. (2009)

#

50

51

52

53

54

Table 3.5 (continued)

FSTS, FATA, HRSTS, HRATA; NOFC, FBTB, NOIRC, HRBTB; ENT

FSTS, HRSTS, among others: GDP

Measure(s)

Sample(s); source(s)

227 Large European Fortune Global 500 firms, 2000–2006; sources: ARS

116 Fortune Global 500 firms, with data for 2000 (not precisely stated; author’s note)

Finding(s); contribution(s)

European MNEs have strong, consistent home regional presence; no trend of global diversification

Firms take home region-oriented paths; MNEs are home region-oriented with strong national biases

North America/EU/Asia; Home region/Non-home region

Latin America/North America/Europe/Asia/Africa/Oceania

HRSTS, HRATA, size, R&D intensity, among others

Between 358 and 529 Fortune Global 500 firms, 2000–2006; sources: ARS, 2000–2006; 183 North American Fortune Global 500 firms, 2006

HRBTB (among 1430 M&As from others; author’s Emerging note) Market/BRIC MNEs, eight-year period: 2000–2007; sources: Thompson One Banker database

(continued)

Using sales, North American firms have regional supply chains; rather regional than global sales improve market value

M&As from BRIC MNEs dominantly take place in the triad of North America, Europa and Asia

In global strategy (see Peng and Pleggenkuhle-Miles, 2009, pp. 55–56), global vs. regional geographic diversification is identified as one debate among three others: cultural vs. institutional distance, convergence vs. disconvergence in governance, domestic vs. overseas social responsibility.

North America/Europe/Asia-Pacific

Europe/Asia-Pacific/North America

Regional split(s)

3.2 Review and Analysis of Prior Approaches and Empirical Results 135

Rugman and Oh (2010)

Between 259 and 329 Fortune Global 500 firms, 2002, with data for 2001–2005; sources: ARS of each firm

(continued)

Firms expand into their own region; intraregionality is dominant and steady for sales and assets

Large countries may affect results; data based on the home region is biased towards large economies like the US; examine ROR and contrast with ROW sales

34 Not all the contributions provided within the journal’s special issue address the classification of MNEs or regional and global MNEs on the firm-level directly. For examples, also see: Cerrato (2009), Lee and Marvel (2009) and Hejazi (2009). In addition and for further reading on the terminology applied here, see Aguilera et al. (2019, p. 66), who also use terms such as flat and spiky in their introduction to a special issue.

FSTS, FATA, HRSTS, HRATA; ROS, ROA, Tobin’s Q

Non-Financial, TNC-listed Fortune Global 500 firms continuously listed from 1993 to 2007, data for 2006; 181 countries, sources: World Economic Outlook database

3

North America/Europe/Asia-Pacific

FSTS, HRSTS, among others: purchasing power parity-adjusted GDP

UK Exporting firms are largely home-regional MNEs, but incl. a large share of host regional MNEs

58

Africa/Americas/Asia & Oceania/Europe/Middle East

365 UK Exporting firms with data from an electronic survey for 2005

Seno-Alday (2009)

FSTS, HRSTS

57

Europe/North America/Asia-Pacific/Other

Beleska-Spasova and Glaister (2009)

Finding(s); contribution(s)

56

Sample(s); source(s)

Rugman (2009)34

55

Measure(s)

Regional split(s)

Firm-level data suggest that MNE business activities from sales and assets are intraregional. The world is spiky and dividable into three regions: Europe, North America, Asia-Pacific. Consequently, managers need to develop appropriate strategies at the regional level for each of the triad regions.

Author(s)

#

Table 3.5 (continued)

136 Regional and Global Multinationals: A Literature Review

Author(s)

Berrill and Kearney (2010)

Khan (2010)

Gardner and McGowan (2010)

Rugman (2010a)

Aggarwal et al. (2011)

Akhter and Beno (2011)

#

59

60

61

62

63

64

Table 3.5 (continued)

Regional split(s)

Measure(s) FSTS, FBTB, HRSTS, HRBTB; among others (ABHK applied; author’s note)

Sample(s); source(s)

Finding(s); contribution(s)

1143 G7 country firms, Transregional firms are eight-year period dominant; few global or 1999–2007, data for the regional, partly domestic firms year 2005; sources: Datastream, Worldscope, Who Owns Whom 2005/2006

North America/Latin America/Western Europe/Asia (titled Quad; author’s note)

Africa/Asia/Europe/North & Central America/Oceania/South America

North America/Europe/Asia

North America/Asia/Europe

Exports, FDI flows

FSTS, HRSTS, FBTB, HRBTB (ABHK applied; author’s note)

HRSTS

FSTS, HRSTS

Soft drink firms have a strong regional bias

Export data for 1970, 1980, 1994, 2006; FDI flows for 1990, 1997, 2000, 2004; sources: IMF, OECD, UN

Between 1143 and 1155 firm years for Largest G7 firms, with data for 2005; sources: Worldscope, Who Owns Whom 2005/2006

(continued)

Exports show increases in intraregional trade or trends for all regions; FDI, varying harshly, shows regional trends

Alternative classification; firms are noticeably domestic; few regional and global, mostly transregional firms

379 Fortune Global 500 MNEs from emerging markets firms, 2001; sources: are regional, not global Rugman (2005c)

Five cases: Cadbury, Coca-Cola, Cott, National, Pepsi; sources: ARS

The review and recap of the regional and global debate offers three main points: (1) two parts of with discourse, based on country- and firm-level data; (2) general approach: both regionalization and globalization are alive and well, co-existence is possible; (3) contexts as primary drivers.

Africa/Asia/Europe/North America/Oceania/South America

3.2 Review and Analysis of Prior Approaches and Empirical Results 137

Author(s)

Martelli and Abels (2011)

Almodóvar (2011)

Rugman and Oh (2011)

Oh and Rugman (2012)

Rugman et al. (2012)

#

65

66

67

68

69

Table 3.5 (continued)

Regional split(s)

Measure(s)

FSTS, FATA, NOFC, FBTB, HRSTS, HRATA, NOIRC, HRBTB

FSTS, HRSTS (among others; author’s note)

Sales, employees

Sample(s); source(s)

Up to 246 US Fortune Global 500 firms, data for the 2000–2007 period; sources:

Between 872 and 1211 Spanish Exporting firms, 2000–2008; sources: SEPI

Fortune Global 500 firms, 2005–2009

Finding(s); contribution(s)

Scope metrics overestimate foreign involvement; the activity of US firms is subject to a home region bias

Spanish firms are mainly regional with a high degree of home-region orientation

Key economic demographic variables show that firm activity is triad-focused

North America/Europe/Asia-Pacific

Europe/North America/Asia-Pacific

FSTS, HRSTS, FATA, HRATA; (locational; author’s note) competitiveness scores

FSTS, FATA, HRSTS, HRATA; among others: Tobin’s Q for size

495 and 491 Fortune Global 500 firms, Global Competitiveness Reports, 1998 & 2008 data; sources: Compustat, Osiris, World Economic Forum

Up to 219 European Fortune Global 500 firms, listed and data from 2000–2007; sources: Compustat, Osiris, ARS

(continued)

Intraregionality remains mostly stable overall, with shifts in the specific setup; internationality increases, especially for North American and Asian firms

European firms are mostly bound within their home-regional markets

3

Suggested improvements for regional and global MNE research: (1) increase the carefulness when studying firm annual reports; (2) use longitudinal data to allow for analysis of changes over time.

US & North America/Europe/Asia-Pacific (not precisely stated; author’s note)

Domestic/Europe/ROR/ROW/Latin America

Asia/North America/South America/Europe/Australia

138 Regional and Global Multinationals: A Literature Review

Author(s)

Wolf et al. (2012)

Curran and Zignago (2012)

Rugman and Oh (2012)

Gooderham (2012)

Berrill and Mannella (2013)

#

70

71

72

73

74

Table 3.5 (continued) Measure(s)

Sample(s); source(s)

Finding(s); contribution(s)

FSTS, FATA, HRSTS, HRATA, NOFC, FBTB, NOIRC, HRBTB, ENT(RB)

Trade volumes

Up to 655 Fortune Global 500 firms, data for 2000–2007; sources: ARS (number of firms varies, with no less than 350 per year; author’s note)

Data for 2007; sources: BACI international trade database

Country-based scope metrics are misleading; MNEs adopt regionally over locally or globally established internationalization practices

Different levels of orientation in trade across different types of products

Africa/Asia/Europe/North & Central America/Oceania/South America

FSTS, FBTB, HRSTS, HRBTB (ABHK applied; author’s note)

411 Fortune Global 500 firms listed in 2010, with data for 2009; sources: Bloomberg, Datastream, Worldscope, among others

(continued)

Firms range from purely domestic to entirely global MNEs; relatively few regional, most being classified transregional

Case study on firms attempting the transition from a multi-domestic to the global state. Two challenges are outlined, namely confrontation with political and social aspects. Based on the cases, the study provides a framework for shaping and guiding actions of managers in MNEs.

NAFTA/Europe (Western, Central, Eastern)/Asia-Pacific (East-/South-Asia, Oceania)

EU27/NAFTA/ASEAN + 3 (CN, JP, KR)/ROW

Generation of empirically testable propositions from existing research on home-region orientation and comparison of this literature alongside five criteria: (1) drivers of home-region orientation; (2) drivers’ internal and external factors; (3) rationality of MNE managers’ decision making; (4) general model of MNE’s managers employed by a theory; (5) permanence of home-region orientation associated with theory. Thereupon, home-region orientation can be explained in terms of FSA and external or contextual factors and is likely to be a long-lasting phenomenon.

Regional split(s)

3.2 Review and Analysis of Prior Approaches and Empirical Results 139

Author(s)

Sammartino and Osegowitsch (2013)

Vahlne and Ivarsson (2014)

Berrill and Hovey (2013)

Kolk et al. (2014)

#

75

76

77

78

Table 3.5 (continued)

Regional split(s)

Measure(s)

Sample(s); source(s)

Finding(s); contribution(s)

NAFTA/EU/Asia/ROW; with separate intra-EU splits: Nordic, North, South, Central/Eastern

17, mostly Swedish firms, with 2000–2011 data (not balanced; author’s note); sources: ARS, interviews with senior management

HRSTS, HRETE, generating capacity (megawatts; author’s note)

Seven major EU electric utility firms, 2000, 2005 and 2010, with a case study design; sources: ARS and secondary, publicly available information

FSTS, regions, Between 203 and 405 (ABHK applied; UK FTSE All-Share author’s note) Index-listed firms, each firm in each year from 1990 to 2012; sources: Datastream

FSTS, HRSTS, FETE, HRETE (among others; author’s note)

(continued)

Firms slightly increase internationality, coupled with traditional activity in the home region, but remain home country-/region-oriented MNEs

Multinationality increases over time, the degree of increase varies based on measures applied

Swedish firms are mostly global; development of a globalization process model for argumentation, that globalization can evolve to be a more general phenomenon

3

Domestic/Regions (2)-(6); Regions (1)-(10)

Western Europe/Eastern Europe/North America/South America/Asia-Pacific/Africa & ROW

Five archetypes, home-country fortress, home-region fortress, home-region saturation, permeable regions and flat world, are developed to chart how firms interact with their home region. While covering the spectrum of FSA reach and evolution, the archetypes serve as a foundation for the varying degrees associated with home-region orientation and as a benchmark to deepen questioning on what constitutes the region and its effect on firm expansion.

140 Regional and Global Multinationals: A Literature Review

Berrill (2015)

Kim and Aguilera (2015)

82

83

Finding(s); contribution(s)

HRSTS, HRBTB; (ABHK, threshold variations applied; author’s note)

1143 and 1155 G7 firms, data for 2005; 374 and 455 Fortune Global 500 firms, data for 2001, 2005; sources: Worldscope

FSTS, EBITDA, Case: Deutsche investments, Telekom, countries 1995/2003/2007–2013; sources: ARS

Depending on regional splits or thresholds applied, many firms are transregional and global

Footprint changes over time due to inter- and intraregional investments

35 Not surprisingly, it is argued that the context-dependency of MNE strategy results in the need for a variety of approaches for different contexts (author’s note).

(continued)

To adjust alongside opportunities and constraints on country and regional levels, home and (multi-; author’s note) regionality/regionalization are derived as typical internationality/internationalization trajectories in a semi-globalized/-globalizing world. The interplay of three mechanisms, namely (1) intraregional exploitation; (2) intraregional reconfiguration; and (3) interregional exploitation, is outlined for the internationalization of firms, which are moderated by macro-level contingencies.

Africa/Asia/Europe/North America/South America; among five other splits

Various splits, mostly related to ARS-format

Longitudinally, MNEs remain dominantly home region-oriented and in the home region with both sales and assets; no changes

Whalley and Curwen (2014)

Sample(s); source(s) Between 294 and 596 Fortune Global 500 firms, 1999–2008 ten-year period; sources: ARS

81

FSTS, HRSTS. FATA, HRATA

Dabic et al. (2014)35 Content analysis of 1116 contributions to MNE (strategy; author’s note), while separating for two periods, 1975–1999 and 2000–2012. Knowledge- and resource-based views are generally identified to explain MNE corporate-level-strategies, but the need for more specification is likewise outlined. The transition of firms, for instance from INVs to MNEs, is identified for future research, among others.

Measure(s)

80

Regional split(s)

Oh and Rugman (2014)

79

North America/EU/Asia-Pacific

Author(s)

#

Table 3.5 (continued)

3.2 Review and Analysis of Prior Approaches and Empirical Results 141

Author(s)

Aguilera et al. (2015)

Asmussen et al. (2015)

Mullen and Berrill (2015)

Nguyen (2015)

Mudambi and Puck (2016)

#

84

85

86

87

88

Table 3.5 (continued)

Regional split(s)

Measure(s)

Sample(s); source(s)

Finding(s); contribution(s)

FSTS, HRSTS

132 publicly listed subsidiaries in five ASEAN member countries; sources: OneSource Global Business Browser

Up to 1223 firms from seven European countries, JP, CA and the US, with data for the 15-year period, 1998–2012; sources: Datastream, Worldscope

ASEAN publicly listed subsidiaries generate a dominant stake of their sales in the home region

MNEs are majorly classified as home region-oriented, with decreases on a longitudinal basis; increases in all other three classes over time; examination of classification switching patterns

Building on Asmussen (2009), the interplay of home region and global market penetration is uncovered

(continued)

The authors argue that RV’s assessment underestimates the global dimension due to a focus on sales, assets. Thus, the entirety of a firm’s footprint is disregarded while internalized value chain activities of MNEs, such as exposure to (global) resources, markets or outsourced activities, are not considered.

North America/Europe/JP

FSTS, FBTB, HRSTS, HRBTB (RV comparison applied; author’s note); among others: GDP share

FSTS, HRSTS, 220 of the world’s 2000 FBTB, HRBTB, largest firms, min. three GDP years for 1995–2005 data; sources: Worldscope, Lexis Nexis

3

North America/Europe/Asia; Europe/North & Central America/Asia/South America/Africa & the Middle East/Oceania/Other

Europe/North America/Asia (not precisely stated; author’s note)

Key insights from regional MNEs and economic geography is aggregated for possible alignment of regional borders within the IB literature and discusses how regions matter in the internationalization strategy of MNEs. Therefore, the theoretical foundations and progress of MNE research is critically assessed when (regional) boundaries relating to international diversification find (re-)conceptualization.

142 Regional and Global Multinationals: A Literature Review

O’Hagan-Luff and Berrill (2016)36

Verbeke and Asmussen (2016)

Chadha and Berrill (2016)

Meyer and Benito (2016)

89

90

91

92

Regional split(s) FSTS, segments, regions (among others; author’s note)

Measure(s)

Sample(s); source(s) 396 US-listed Russell 1000 firms, with data from 1996 to 2010; sources: Form 10-K (possibly more, but not stated; author’s note)

Finding(s); contribution(s) Balanced sample, with an increase in foreign extent and scope, while domestic remains constant; non-linear patterns, semi-global state

-

JP/Asia/Regions (2)-(6)

Between 155 and 195 Japanese, 1998–2013; Nikkei 225-listed in 2013; sources: Datastream, Worldscope

Country Eleven cases of MNE location, leading HQs relocations, in the reasons 1995–2015 period

FSTS, FBTB, segments, regions (ABHK applied; author’s note)

(continued)

MNE HQs relocations are rare events, whilst most MNEs’ HQs are in the home country or region

Multinationality increases over time, the degree of increase varies based on measures applied

The contribution provides an overview of the main insights arising from regional strategy literature, while arguing that the region, in addition to the country and the global level, should be introduced as a geographic level of analysis to explain boundaries, diversification, beyond home region footprints.

US/North America/Regions (2)-(6)

data from the 1996–2010 period are used in Berrill et al. (2019). For a comparison as well as a verification, see Table 2.1 by O’Hagan-Luff and Berrill (2016, p. 208) and Berrill et al. (2019, p. 675) respectively.

36 Similar

Author(s)

#

Table 3.5 (continued)

3.2 Review and Analysis of Prior Approaches and Empirical Results 143

Author(s)

Mauri et al. (2017)

Brennan et al. (2017)

Brennan et al. (2018)

Vahlne et al. (2018)

#

93

94

95

96

Table 3.5 (continued) HRSTS, among others: HRBTB, employees, countries of employment

Measure(s)

Europe (in-/excl. Sweden)/Americas/Asia/Africa/Oceania/Not specified

FSTS, FETE, HRSTS, HRETE

FSTS, HRSTS

Sample(s); source(s)

50 largest Swedish manufacturing firms, 2010–2016, 10 Swedish global manufacturing firms, 2016; sources: ARS

88 Fortune Global 500 or convenience samples firms, with data from 1990 to 2010; sources: Datastream

88 Fortune Global 500 or convenience samples firms, with data from 1990 to 2010; sources: Datastream

Two samples for US manufacturing firms, with 1992–1997 and 1999–2013 data; sources: Compustat, US Direct Investment Abroad

Finding(s); contribution(s)

(continued)

Continuous increase of internationality and multiregionality; economic downturns are observable; regionalization as a step

Comparison of RV, OS and ABHK classification results for home-/bi-regional MNEs; for RV, a crushing proportion of MNEs is home-regional

ABHK: transregional firms are dominant, which is of support for semi-globalization hypothesis; RV: home region-oriented firms are dominant over time, with slight decrease

Location-bound FSAs hinder interregional; non-location-bound FSAs, host market resource affinity, efficiencies facilitate intraregional expansion

3

Domestic; North America/South America/Europe/Asia/Oceania/Africa

Africa/South America/Asia, the Middle East, FSTS, HRSTS RU & TR/Europe/North America/Oceania & (ABHK and RV AU applied, among others; author’s note)

North America/Europe/Asia-Pacific

Regional split(s)

144 Regional and Global Multinationals: A Literature Review

Oh et al. (2019)

Berrill et al. (2019)

Hii and Ko (2019)

Jeong and Siegel (2020)

97

98

99

100

Source: Own illustration.

Author(s)

#

Table 3.5 (continued) Measure(s)

Sample(s); source(s)

Finding(s); contribution(s)

FSTS, segments, regions (among others; author’s note)

396 US-listed Russell 1000 firms, with data from 1996 to 2010; sources: Form 10-K (same as O’Hagan-Luff and Berrill (2016); author’s note)

MNEs, on average, experience increasing levels of internationality with periods of deinternationalization

Asia/Africa/Europe/North America/non-North America Americas/Oceania

FSTS, HRSTS, (internal) production inputs

Up to 1828 US MNEs, with 1994, 1999, 2004 and 2009 data; sources: US Bureau of Economic Analysis

US MNEs are substantially more global than acknow-ledged in the IB literature

The authors provide high-level data on regional commerce blocs and draw practical examples from several MNEs, such as Tesla, Inc. or Honda Motor and the respective production or manufacturing locations, to point out indications that firms lean toward regionalization more than globalization.

US/North America/Regions (2)-(6)

Using the data from Oh and Rugman (2014), the authors outline three generic paths of international expansion and show that different geographic scopes of operation are linked to industry characteristics.

Regional split(s)

3.2 Review and Analysis of Prior Approaches and Empirical Results 145

146

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Regional and Global Multinationals: A Literature Review

While applying the broad triad 37 and considering data from the Templeton Global Performance Index (Gestrin et al., 1998), Rugman (2000b, pp. 96–99, 129–138) initially shows that FDI and trade activity occur on a mostly intraregional basis for the years 1991, 1993, 1995, 1997 and 1998. While restating this HRTT data as provided based on Table 3.6, it is to bear in mind that intraregional export data do not take into account any activity from a domestic perspective, which, most likely, would result in a sharp change of these figures. From FDI and exports, Rugman (2000b) then shifts to a firm-/micro-level perspective when consecutively analyzing the activities from Fortune Global 500 firms by industries, such as automotive (p. 154), pharmaceutical (pp. 65, 148–149) and telecommunication (pp. 142–144). With respect to TGPI and Fortune Global 500 data, automotive firms thus distribute their assets (HRATA) on a dominantly intraregional basis with HRTT measures at 64.3% for US MNEs, 66.3% for Japanese MNEs and 92.5% for European (in this case French-based; author’s note) MNEs (p. 154).38 A similar indication is provided in relation to pharmaceutical firms (p. 65), whereas ten (10) out of 14 firms have a geographic stake of less than 50% on a foreign-to-total basis in terms of assets (FATA) and only four firms39 , all of which have their headquarters outside the US, have an asset distribution with more than 50% outside the home country. Given this initial data, the measures attest the dominance of the home country/region from a view in 2000. Rugman and Hodgetts (2001) then connect the existing data for intraregional and in between broad triad bloc export activity (or “world trade”, cf. Rugman and Hodgetts, 2001, p. 334; author’s note), which accumulates to 82.2% for Europe, 80.2% for NAFTA and 96,9% for JP in 1997 (Rugman, 2000b, pp. 127, 134, 137), with a strategic management perspective when presenting a matrix for the linkage of economic integration and (global) responsiveness. While the key players from the broad triad in fact rely heavily on intraregional and inter-triad member trade or business activity, the strategic directive often associated with the debate ultimately goes back to the framework by Rugman and Hodgetts (2001, pp. 334–336), titled international management strategy matrix (Rugman and Hodgetts, 2001, p. 335), which represents an adaptation and extension of Bartlett and Ghoshal’s (1989) transnational solution and serves as a tool to question the appropriateness of global 37 For a differentiation of the core members and the respective extension, see Rugman (2000b, p. 114). 38 Data on Japanese assets equals the data available for Asia as a region. Europe as a region considers only data for two firms, namely Renault and Peugeot. Four US firms, namely GM, Ford, Dana and Johnson Controls, and seven Japanese firms, namely Mitsubishi Motors, Nissan, Fuji Heavy Industries, Denso, Mazda Motor, Honda and Toyota. 39 Namely Astrazeneca, Roche, SmithKline Beecham and Aventis (Rugman, 2001, p. 65).

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Table 3.6 Rugman’s (2000b) perspective on intraregional export data. Exporter origin

1991

1993

1995

1997

1998

Europe

76.4

72.1

73.4

73.1

-

thereof EU

-

66.8

61.7

62.4

60.6

DE

-

72.8

73.2

73.0

-

UK

69.7

58.2

59.8

59.4

51.8

JP

50.1

51.8

51.6

53.7

NAFTA

36.5

40.8

38.4

39.8

-

thereof US (to NAFTA)

28.1

32.6

29.5

32.2

-

Source: Own illustration, on the basis of Rugman (2000b, pp. 129–138).

strategists’ perspectives. Taking into consideration the framework and data for analysis as provided, Rugman and Hodgetts (2001, pp. 336 ff.) build a case on the “‘global’ failures” of three MNEs, namely Coca-Cola, Disney and Saatchi & Saatchi. In pursuing a “pure global strategy”, these firms are characterized to “focus heavily on going international to achieve the benefits of global integration using a successful home base product or service” and described as “where the benefits of global integration are sought and the need to adapt products to local markets is largely ignored” (cf. Rugman and Hodgetts, 2001, pp. 335–336). Various issues arising from this characterization of global strategy, such as centralized decision-making, standardized operating practices, language barriers as well as differences in labor policies and working conditions, are then discussed and illustrated on a more detailed basis. Based on the analysis of an additional ten MNEs, namely Philips, Matsushita, IKEA, Kingfisher, Nokia, Ericsson, Nortel Networks, Unilever, Procter & Gamble and P&O, Rugman and Hodgetts (2001, pp. 337–341) then lay ground to derive that “successful multinational firms do not always use the ‘pure’ globalization, one-size-fits-all strategy […]” (cf. Rugman and Hodgetts, 2001, p. 337) with the ten cases exemplifying that MNEs seek for optimization of the balance between economic factors, such as the integration in relation to economies of scale, and local factors/national responsiveness. While taking from the analysis that European MNEs tend to be relatively more successful in coping with the existing challenges (Rugman and Hodgetts, 2001, p. 341), it can be concluded that Rugman and Hodgetts (2001) discuss the nature of regional business activity on the firm-level and use cases to outline the conditioning for and failure of to what is their understanding of regional and global strategy. Thereby, Rugman and Hodgetts (2001) do not directly rely on any form of quantification or measurement prevailing the debate thereinafter

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when addressing the separation of firms based on the strategy matrix as introduced. On the contrary, it can be argued that the authors fail to provide a detailed explanation of the criteria involved when allocating the firms exemplified to one of the four quadrants of their framework. On this basis or as a continuation of Rugman (2000b), the contribution by Rugman and Hodgetts (2001) nevertheless represents an important part of the transition from preceding research towards the beginnings, workings and misunderstandings as what can be understood as a very early debate of the benefits associated with regional and global MNEs or business activity. In comparison to Rugman and Verbeke (2003a, 2003c, 2004b), who follow the framework-oriented direction as advocated by Rugman and Hodgetts (2001), Rugman and Girod (2003) choose to analyze the business activities of the largest 49 Fortune Global 500 retail MNEs with data for the year 2000. While using HRTT measures from sales and asset (store) data and a three-class draft of the RV classification (Rugman and Girod, 2003, pp. 27–34), the authors find that the firms from the sample heavily rely on their intraregional business with 18 purely domestic firms, 24 home region-oriented, five (5) bi-regional and only one (1) global MNE. From this concentration on the so called “home-triad base of MNE activity” (cf. Rugman and Girod, 2003, p. 28) and the interplay between FTT and HRTT measures, Rugman and Girod (2003, p. 36) and Rugman (2003a, p. 8), who uses a similar sample of firms but data for 2001 in a supplementary publication, conclude that Fortune Global 500 retail MNEs operate on a strongly segmented, (home-) regional basis and expansion requires a regional but not a global solution to the strategy of these firms (Rugman and Girod, 2003, p. 36). Another dataset that early fosters the direction of classifying MNEs that also relates to firms listed in Fortune Global 500 is presented by Rugman and Brain (2003), who therefore analyze FTT and HRTT measures and additionally classify the world’s most international firms from TGPI (ranked by FSTS; author’s note).40 The sales (FSTS: 39.6%) and assets (FATA: 38.3%) from the samples’ 246 Fortune Global 500 firms thereby indicate dominantly domestic ties, while the classification of 20 firms from TGPI based on four classes shows that MNEs are dominantly regional and not global. Specifically, twelve (12) home region-oriented firms are complemented by five (5) bi-regional, two (2) host region-oriented and one (1) global MNE (Rugman and Brain, 2003, pp. 6–11). It is thereby noteworthy that data from TGPI, which are based on the list of Fortune Global 500 firms, 40 Based on Rugman (2000b), Rugman and Brain (2003, p. 7) argue that firms listed in Fortune

Global 500 dominate the IB landscape when accounting for more than 90 percent of the world’s stock of FDI and over 50 percent of world trade. In addition to these works, see Ogrean (2017) for a more recent analysis of firms listed in Fortune Global 500 by industry.

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indicate that sales and asset data available are far more international-oriented for firms from the EU (FSTS: 52.9%, FATA: 55.5%) than for firms from the US (FSTS: 37.5%, FATA: 32.8%) or JP (FSTS: 27.2%, FATA: 23.5%). In contrast to the data, Rugman and Brain (2003, p. 3) state that “the best evidence on the current nature of international strategy comes from examination of the activities of the 500 largest multinational enterprises, as listed in the Fortune [Global; author’s note] 500” (cf. Rugman and Brain, 2003, p. 3). While further referring to differences relating to the degree of internationality between different sectors, such as banking, chemicals, computers, electronics and electrical equipment, motor vehicles and parts, petroleum refining, pharmaceuticals and retailing (Rugman and Brain, 2003, p. 6), Rugman and Brain (2003) build the foundation to call for additional, industry-related empiricism but fail to question the research object and data selected in regard to or as a consequence of their own data and findings as presented. While data, framework or conclusions are in retrospect at minimum partially considered for other, preceding contributions or submissions (for example: Rugman and Verbeke, 2003b; Rugman, 2003b, 2003c), the full dataset available from firms listed in Fortune Global 500 in 2001 is then used by Rugman and Verbeke (2004a) and Rugman (2005c) to introduce their four-way classification (for details of the workings, see Subchapter 2.4; author’s note). Under consideration of the broad triad, the respective 20% and 50% thresholds and 365 firms (for which sales data are available; author’s note), RV consequently classify 87.7% or 320 of these firms as home region-oriented and 3.0% or eleven (11) as host region-oriented, 6.8% or 25 as bi-regional and 2.5% or nine (9) as global MNEs (Rugman and Verbeke, 2004a, p. 7; Rugman, 2005c, p. 4).41 The respective HRTT measures furthermore emphasize the nature of home-region orientation for Fortune Global 500 firms, whereas intraregional sales (HRSTS) account for a 71.9% stake (Rugman and Verbeke, 2004a, p. 5; Rugman, 2005c, p. 5). The empirical evidence from 365 of the world’s 500 largest firms thus reveals that these organizations mainly perform in the home region of the triad. In contrast and as implied from the terminology in use for the (sub-) title of the related article in JIBS or the monography, the authors analyze business activity and do not necessarily perform an analysis of regional and global strategy as claimed.42 41 For this summary of empirical findings and the relative stakes stated here or hereinafter, the overall data for calculation considered for the review refers to home- and host regionoriented, bi-regional and global MNEs. Firms with insufficient or no data are consequently not considered, which may result in a discrepancy when compared to some but not all of the contributions available. All data and calculations are available from the appendices. 42 See Section 3.3.5 for details as well as an elaboration of this concluding statement.

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While these exact findings are consistently and consecutively restated on the basis of additional publications (for example: Moore and Rugman, 2003, p. 2; Rugman, 2004, p. 14, 2005b, pp. 172–173), the RV framework on home-region orientation is also used to publish slightly modified or updated and different parts of the sample from Fortune Global 500 or other firm listings. The dominance of HRO and firms classified as home region-oriented is thus exemplified for samples from different industries, such as chemical and pharmaceutical (Rugman and Brain, 2004a), automotive (Rugman and Collinson, 2004; Verbeke and Brugman, 2005), banking and finance (Rugman and Brain, 2004b; Grosse, 2005), airlines (Verbeke and Vanden Bussche, 2005), retail, food & beverage (F&B) or cosmetics (Rugman and Dossett, 2005; Oh and Rugman, 2007, 2006; Filippaios and Rama, 2008; Gardner and McGowan, 2010), non-financial (Hejazi, 2007; Seno-Alday, 2009), telecommunications (Whalley and Curwen, 2014), electric utility (Kolk et al., 2014) and, more generally, manufacturing and/or services (Rugman and Verbeke, 2008a), or regarding headquarters location, such as Japanese (Delios and Beamish, 2005; Collinson and Rugman, 2008), European (Rugman and Collinson, 2005; Oh, 2009; Oh and Rugman, 2012), Asian and/or emerging markets (Rugman and Collinson, 2006; Collinson and Rugman, 2007; Rugman and Oh, 2008c; Sethi, 2009; Li and Oh, 2016), UK and/or British (Rugman et al., 2007; Beleska-Spasova and Glaister, 2009), Chinese (Yin and Choi, 2005; Rugman and Li, 2007), Korean (Rugman and Oh, 2008b), US (Hejazi, 2007; Rugman and Oh, 2008a), Spanish (Almodóvar, 2011), (mostly) Swedish (Vahlne and Ivarsson, 2014; Vahlne et al., 2018), ASEAN (Nguyen, 2015) and G7 country (Berrill, 2015), and/or on an individual basis (Mullen and Berrill, 2015; Brennan et al., 2017). A wider or generalizable exception regarding the dominance of home-region orientation or home region-oriented firms can thereby not be identified from these contributions.43 This also applies for contributions that address home-region orientation and RV classification based on a sample for the full list (meaning for which sales or asset data are available; author’s note) of Fortune Global 500 firms from a multi-year, such as midterm or longitudinal, perspective (among others: Rugman and Oh, 2007, 2008c, 2008a; Rugman, 2008; Rugman and Verbeke, 2008a; Oh, 2009; Rugman and Oh, 2010, 2011, 2012; Oh and Rugman, 2012; Rugman et al., 2012; Oh and Rugman, 2014; Mullen and Berrill, 2015). Oh and Rugman (2014), 43 See Section 3.3.3, where HRO and classification results are addressed for contexts and actors

in detail. Individual exceptions may, based on the respective authors’ interpretations and data, apply (author’s note). In contrast to other contributions may be available from the debate, the research cited and considered throughout the previous paragraph applies the (original) thresholds and classes as introduction by Rugman and Verbeke (2004a) and Rugman (2005c).

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for example, compile a sample from Fortune Global 500-listed firms for the tenyear, 1999–2008 period. Whereas 804 different firms appeared on the lists, results on sales data are presented for a minimum of 381 and a maximum of 596 firm observations from the years 1999 and 2005 respectively. Based on the geographic distribution of sales and assets, Oh and Rugman (2014) consequently apply a fourto five-class system (the extension is available from the inclusion or separation of a domestic (sub-) class (see Hejazi, 2007), which is applied for firms with less than 10% of foreign business activity; author’s note) to a total of 5,479 and 4,547 firm observations from each sales and assets. While finding that few firms change their classification over time and concluding that there exist no strong empirical evidence of firms being classified as global MNEs (labelled “no strong evidence of firms shifting toward a global strategy”, cf. Oh and Rugman, 2014, p. 111; author’s note), the stake of home region-oriented firms, which in this case includes the firms to be found domestic, decreases in the range from 89.8% to 79.1% as well as from 89.5% to 87.8% regarding sales and asset data respectively in the 1999–2008 period (Oh and Rugman, 2014, pp. 110–111). For home-region orientation, sales and asset data remain at about 70% and 72% respectively for data from the world’s largest firms (Oh and Rugman, 2014, p. 113). Whereas Oh and Rugman (2014) do not provide any definition, evidence or explanation for their linkage and construct between classification and strategy and do not separate for the latter, the contribution, in line with other longitudinal approaches, consequently extends and updates prior research from the debate on regional and global MNEs when referring to sales and asset as well as supplemental financial data. While both confirm findings previously obtained, it is thereby reasonable to conclude from the data that the firms sampled and for which data are available mainly remain in their home region over time. Throughout the use of different contexts and actors and under the consideration of updated and/or longitudinal data, but largely in connection to Fortune Global 500 firms, many contributions consequently verify the initial findings on HRO and home region-oriented firms connected with the classification by Rugman and Verbeke (2004a) and Rugman (2005c). Therefore, it is assumed that there “appear to be no additional scale, scope, or differentiation advantages to be gained by going global” (cf. Rugman, 2005c, p. 5).44 In contrast, Delios and Beamish (2005), who use the RV framework to classify the subsidiaries of 1,229 Japanese firms, find that firms classified as 44 Likewise, Rugman and Brain (2003) find that “additional scale, scope or differentiation advantages to be gained by going global are not sufficient to compensate for the enhanced risks” (cf. Rugman and Brain, 2003, p. 7).

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home region-oriented have a lower performance than host region-oriented, bi-regional and global MNEs. While considering the return on sales (ROS) and assets (ROA) and Tobin’s Q for doing so (Delios and Beamish, 2005, pp. 28–31), it is to note that the contribution focuses on foreign data exclusively. While nurtured from this neglection of business activity in the home country, Delios and Beamish (2005) very well illustrate how the application and adaptation of a single approach, like the RV framework for firm classification, can nevertheless be equipped with a varying span of findings and implications. Likewise, Delios and Beamish (2005, pp. 23–27) early discuss and test for an adaptation, or more precisely a lowering, of the thresholds from the initial framework to a 10% level (a level considered to be “significant” by Geringer et al. (1989, p. 115); author’s note) and consider the possibility that firms change classification over time when comparing the results from 1995 and 2000 data. Both aspects are similarly addressed in more critical ways thereinafter (for example: Osegowitsch and Sammartino, 2007, pp. 47–58), whereas especially the contribution and research by Osegowitsch and Sammartino (2008) states and exemplifies that the framework by Rugman and Verbeke (2004a) and Rugman (2005c) (over-) emphasizes the concentration of business activity in the home region (Osegowitsch and Sammartino, 2008, p. 192). Firstly, their comparison of data available from Fortune Global 500 firms shows that the stake of home region-oriented firms decreases from 93.4% in 1991 to 83.8% in 2001 (Osegowitsch and Sammartino, 2008, p. 190). In line with the data available from Oh and Rugman (2014), this results in a decrease of 14.3% for the stake of home region-oriented firms in the list of Fortune Global 500 firms between 1991 and 2008 overall (an imbalance of the list or a deviation between the firms sampled is likely, but not discussed at this or a later stage; author’s note). A similar observation is thereby available from the longitudinal perspective provided by Brennan et al. (2017, 2018), whereas the stake of home region-oriented firms in their 1991–2010 sample with 88, partly Fortune Global 500 listed, convenience sampled firms reflects a 19.1% decrease from a high of 91.1% in 1992 to 72.0% in 2010.45 Secondly, Osegowitsch and Sammartino (2008) fundamentally question the merit of the broad triad/triad as central unit of analysis and argue that the discussion of threshold levels could become a contentious issue for the IB community (Osegowitsch and Sammartino, 2008, pp. 190–191, 194). Neither standing-alone nor in their combination can the 45 Based on an individual, electronic request, it is acknowledged that the respective authors provide their data and results for consideration in this work on a more detailed basis than available from the publications. Therefore, a source or page number for the exact location of these figures as stated in the literature cannot be provided.

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arguments or data provided thereby dismiss or (success-) fully disprove the fact that HRO remains dominant for the firms’ business activities and classification, which leads scholars to conclude that the permeable border of the home region is an “insurmountable barrier that only a handful of exceptional competitors[…] will be able to cross” (Osegowitsch and Sammartino, 2007, p. 61). While Dunning et al. (2007) or Akhter and Beno (2011)46 broadly confirm the findings from MNE business activity on the macro-level, Rugman (2005a) and Rugman and Verbeke (2008c) respond to prior critique (in these cases: Stevens and Bird, 2004; Osegowitsch and Sammartino, 2008) that results from classification do not imply that “globalization is entirely non-existent at the macro-level” (cf. Rugman and Verbeke, 2008c, p. 331) and argue that exogenous changes and firm-level learning in the environment of the host region (titled “regional strategy”, cf. Rugman and Verbeke, 2008c, p. 331; author’s note) can ultimately lead to a reduction of home-region orientation. In line with other framework-related contributions, such as by Hejazi (2007) and Asmussen (2009), the consideration of macro-level data can also be considered for an extension whereby the (home) regional hypothesis as postulated by RV withstands persistent criticism. In the process, the contextual understanding of home regionality is thereby deepened by only few conceptual works (for example: Asmussen, 2009; Aguilera et al., 2015) with the extension from and into other academic fields leading to the conclusion that “home-region orientation is likely to be a long-lasting phenomenon” (Wolf et al., 2012, p. 85). Most recently, scholars contributing to regional and global MNEs with a focus on the line of research relating to the classification by Rugman and Verbeke (2004a) and Rugman (2005c) are, moreover and over-again, challenging the existing narrative(s) from similar but at the same time somewhat different angles. On one side, Mudambi and Puck (2016), for example, highlight the focus on the business activity, such as sales, as established within existing research. While the foregoing data from this review generally underpin such an evaluation with the respective numbers, Mudambi and Puck (2016, pp. 1086–1087) point out that a complete picture from MNE business activity must also consider an upstream or outsourced segment, such as on the basis of exposure to resources, markets and sources of value creation. Building on this momentum from the (theoretical) perspective by Mudambi and Puck (2016), Jeong and Siegel (2020) add an empirical angle based on (1994, 1999, 2004 and 46 Akhter and Beno (2011), for example, analyze exports and FDI in order to discuss the changes taking place at the regional level while drawing implications for the development of strategic business and marketing.

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2009; author’s note) data from US MNEs. Whilst the authors’ data underline a case where a regionality in MNEs could be somewhat overstated (Jeong and Siegel, 2020, p. 6), the substantiality of their foundation to truly put an end to debate may be somewhat limited based on the lack of comparability to the original RV study as, firstly, thresholds are (partially; author’s note) lowered to a 10% level and, secondly, due to the application of a different grouping scheme (six regions; author’s note). On the other side, Oh et al. (2019) build on existing narrative(s) while arguing that (different) geographic scopes of operation can be linked to industry characteristics (such as institution-, capability- and linkage-driven; Oh et al., 2019, pp. 562–564). While using existing 1999–2008 data (Oh and Rugman, 2014), the authors lay out seven types of international expansion patterns and three generic paths of international expansion (Oh et al., 2019, pp. 564–568). Thereupon, it can be concluded that also these (more recent) contributions do not represent the breakthrough that RV critics as well as the advocates of global MNEs have been waiting for. In comparison (to the RV line of research; author’s note), Aggarwal et al. (2011) build their classification system for firm-level multinationality on the basis of breadth and depth of international engagement across six regions (for details of the workings, see Subchapter 2.4; author’s note), namely Africa, Asia (incl. the Middle East, Turkey), Europe (incl., among others, Russia), North and Central America, Oceania and South America (Aggarwal et al., 2011, p. 563).47 Breadth is thereby defined as “the extent of geographic spread using four broad categories: domestic, regional, trans-regional and global” (cf. Aggarwal et al., 2011, p. 562), while depth is measured in relation to market engagements, such as contractual arrangements and levels of control (Aggarwal et al., 2011, p. 563). Results from the operationalization of the full 16 classes are available based on a sample of the 1,015-stock market index-listed G7 and outlined for the largest 100 of these firms in detail. For the 1,015 firms, 10.5% are classified domestic, 5.5% are regional, 67.5% are transregional, which represents a dominant stake, and 16.4% are global MNEs (Aggarwal et al., 2011, pp. 562–567; Berrill, 2015, pp. 90–92). An adaptation of the approach by ABHK is then used for testing various samples of (longitudinal) data, such as firms from G7 countries (Berrill and Kearney, 2010; Berrill, 2015), Fortune Global 500/developed markets (Berrill and Mannella, 2013), UK FTSE index (Berrill and Hovey, 2013), Japan

47 Under the use of slightly different context and data, the framework is previously available from Berrill and Kearney (2010).

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(Chadha and Berrill, 2016) and Russell 1000 (O’Hagan-Luff and Berrill, 2016; Berrill et al., 2019).48 Motivated by this more recent developed framework and research on firm-level multinationality, Mullen and Berrill (2015), who classify firms based in six Eurozone countries, the UK, US, Canada, and Japan, and Berrill (2015) also apply the classification and thresholds used by RV for a comparison of results from the data. Without being able to dismiss the dominance of HRO and firms classified as home region-oriented (Berrill, 2015, p. 94; Mullen and Berrill, 2015, p. 277), these works cannot disprove the dominance of home region-oriented MNEs either, which ultimately puts the frameworks but not the different perspectives provided from the results on firm-level regionality and its measurement into the center of debate. The process thereby leads to the development of contributions with narrating kind (for example: Brennan et al., 2017; 2018) that further revisit and compare the results obtained by Rugman and Verbeke (2004a) and Rugman (2005c), Osegowitsch and Sammartino (2008) and Aggarwal et al. (2011) (titled “regionalization model”, “OS altered” and “matrix model” respectively; cf. Brennan et al., 2017, pp. 2–7; author’s note) with a sample of longitudinal data. In relation to the increasing spread experienced in the literature that arguably does or does not contribute to regional and global MNEs directly (this concerns the non-/redacted contributions identified; author’s note)49 , the chronological overview emphasizes that the debate of frameworks and results from the classification systems of firm-level multinationality is ongoing. While the existing need of a strong and robust, yet overall-accepted classification system for firm-level multinationality is outlined, an absolute solution or overall tenor to the issues discussed are not to be found within these — therefore continuous — scientific debates in relation to regional and global MNEs. If yet at all, the literature thereby offers empiricism that shows how either a home- or transregional bias can exist or dominate the results obtained from classifying firms as regional and global MNEs, which means that both streams of empiricism, in their own way, identify, if at all possible, a somewhat semi-global state. Whilst the academic discourse yet seemingly moves away from its very origin, five main aspects can be identified from the literature contributing to regional and global MNEs, namely regional groupings/splits, measures/classes and levels of 48 The analysis of Russell 1000 US firms by O’Hagan-Luff and Berrill (2016) does not provide ABHK-related classification results directly. Nevertheless, the contribution can be considered as a part of the framework’s wider discourse. 49 For research that contributes to the regional and global debate but not to the classification of regional and global MNEs per se, among others, additionally see and consider Pisani et al. (2017), Ral-Trebacz et al. (2018) and Hillemann et al. (2019).

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thresholds, contexts and actors, performance-linkage and strategic or managerial relation. For further and future progress, these aspects are looked at in detail throughout the following subchapter of the systematic review.

3.3

Discussion of Theoretical and Empirical Standpoints from the Literature

This subchapter provides a discussion of theoretical and empirical standpoints from the literature in order to address the contents from the review and analysis of prior approaches and empirical results more specifically. While this concerns the use of different regional groupings (Section 3.3.1), classes and levels of thresholds (Section 3.3.2) and contexts and actors (Section 3.3.3) as well as the use of multinationality in performance-linked (Section 3.3.4) and strategic- and managerial-related research (Section 3.3.5), the subchapter serves to support the generation of concluding remarks on existing research and the definition of research gaps thereinafter.

3.3.1

The Use of Different Regional Groupings

In the IB literature as well as neighboring fields, world countries and regions are grouped and divided based on overlaps and dissimilarities. Reasoning for differentiation thereby stems from various dimensions, such as cultural, economic, institutional and geographic boundaries (for an overview of the (cultural) interplay of countries and regions or details, see: Husted, 2003; Aguilera et al., 2007; Flores et al., 2013; Peterson and Søndergaard, 2014). Regarding the regional and global debate, regional groupings are reviewed for a perspective on these dimensions by Aguilera et al. (2007) during the early days of debate. Table 3.7 consequently illustrates different regional groupings connected with each of the four dimensions stated above and provides insight on the methodological approach considered for their creation. Whilst intra- and cross-dimensional differences exist regarding the methodologies followed or the regional grouping set up, Table 3.7 lays ground for a detailed analysis of the regional groupings and indicates how regional groupings do not necessarily emerge from the regional and global debate as a discussion-worthy standpoint. While Aguilera et al. (2007, pp. 210–216) consider four dimensions for their review, it can be argued that at least two of these, namely the economic and geographic dimension, preferably define the groupings that find consideration

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throughout the 100 contributions selected for (detailed; author’s note) review (Table 3.7). The economic dimension considers the outcomes of regional economic integration activities, such as based on PTAs and RTAs respectively, as an important factor on how countries relate to each other (Ohmae, 1985; Frankel et al., 1997). These groupings are later specified to reflect development-related issues, such as differences between advanced economies or developing countries (Dunning, 1998), or to emphasize the relevance of membership in key organizations, such as the OECD (Buckley and Ghauri, 2004). From a geographic perspective, regions are defined based on physical terms. It is therefore commonly practiced (among others: Geringer et al., 1989) to divide the world into, for example, five continents (Africa, America, Asia, Europe and Oceania), while more detailed approaches (for example: United Nations, 1999) are also considered (among others: Flores and Aguilera, 2007). Based on their review, Aguilera et al. (2007, pp. 216–220) identify two different stands from ten contributions in IB and GS research. The first stand thereby addresses the regional-level effects on MNEs’ actions, such as exemplified by Zaheer and Zaheer (2001), who find evidence for a three-region-system in relation to inter-bank microstructures, or Vaaler and McNamara (2004), who show that rating agencies’ sovereign credit rates are subject to specialization on the regional-level. In contrast, the second stand considers regional effects as part of the overall research design and focus of study (Aguilera et al., 2007, pp. 216–217). In this context, the 100 contributions reviewed apply (different) regional splits or groupings to examine the importance of MNE regional business activity. Regional splits thereby refer to the number of regions applied, whereas groupings also deal with the specific countries of a region. Especially van den Bulcke (1995, pp. 34–37) and Rugman (2000b, pp. 114–116) lay ground for the extension of Ohmae’s (1985) triad power, namely the United States, Japan and the European Community (mainly France, Italy, Spain, the United Kingdom and West Germany; Ohmae, 1985, pp. 125–148), to the broad triad.50 More specifically, the broad triad thereby comprises NAFTA, meaning the United States, Canada and Mexico, Asia (often titled Asia-Pacific; author’s note), which includes Japan, Australia, New Zealand, China, Taiwan, Hong Kong, India, Indonesia, Malaysia, the Philippines,

50 See Poon et al. (2000) and Berrill (2015, p. 95) for a critique in relation to the concept of the triad.

Cultural

McNamara and Vaaler (2000)

United Nations (1999)

Geographic

Extension of the triad, namely broad triad

Rugman and Verbeke (2004a); Rugman (2005c)

5

19

Component geographical regions

Geographical regions

6

Continental regions

3

Country list

Africa & the Middle East/Asia-Pacific/Central & Eastern Europe/Western Europe & North America/Latin America

(see United Nations, 1999, pp. 13–23)

Africa/Americas/Antarctica/Asia/Europe/Oceania

Asia(-Pacific)/EU/North America

High income OECD/other high income OECD/East Asia & the Pacific/Europe & Central Asia/Latin America & the Caribbean/the Middle East & North Africa/South Asia/Sub-Saharan Africa

No

Yes

Yes

(continued)

Partially

Yes

Japan/North America (NAFTA)/Western Europe No (mainly France, Germany, United Kingdom; author’s note)

Regional grouping

3

8

Country-related income levels (GDP per capita)

World Bank (2004, p. 255)

#

Historical, technological and 3 economic analysis of top MNEs; assumed advantages of three regional blocs, namely triad

Methodology or data collection

Ohmae (1985)

Economic

Author (Year)

Table 3.7 Regional groupings from the literature by different perspectives.

158 Regional and Global Multinationals: A Literature Review

Analysis of data from the GLOBE project (see House et al., 2002)

Gupta et al. (2002)

Comparison of world political systems

CIA (2016)

-

-

10

not applicable

not applicable

Anglo/Arab/Confucian Asia/Eastern Europe/Germanic Europe/Latin America/Nordic Europe/South Asia/Sub-Saharan Africa

Anglo/Arab/Far Eastern/Germanic/Independent/Latin America/Latin European/Near Eastern/Nordic

(see Hofstede, 1984a)

Regional grouping

Source: Own illustration, adapted on the basis of Aguilera et al. (2007, pp. 212–213).

Comparison of legal institutions or country level systems

La Porta et al. (1998)

Institutional

Synthesis of previous cultural work on differences among countries

Ronen and Shenkar (1985)

9

Questionnaire-based clustering 12 of cultural dimensions

Hofstede (1984a)

#

Methodology or data collection

Author (Year)

Table 3.7 (continued)

Yes

Yes

Yes

Yes

Yes

Country list

3.3 Discussion of Theoretical and Empirical Standpoints from the Literature 159

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Regional and Global Multinationals: A Literature Review

Singapore and Thailand, but also smaller Asian-Pacific economies, and Europe51 (Rugman, 2000b, p. 114). Whereas the possibility for a fourth region, for example rest of world, remains unmentioned, the extension of the triad power could technically be considered a four-way regional split as well. The broad triad as a regional split is thereby not nearly as transparently implemented as claimed throughout the contributions under review. In line with the critique by Stevens and Bird (2004), a detailed review of the footnotes for the regional-level firm financials as offered by Rugman (2003b, pp. 410–411, 2005c, pp. 15–18, 31, 101–102, 115, 118, 237–238, 242–254), for example, reveals that the data are, firstly, rather hemispheric than regional (Stevens and Bird, 2004, p. 502) and, secondly, often broadly aligned to fit the regional grouping applied, the broad triad. The European region can or does thereby include Africa and/or the Middle East (for example: Rugman, 2003b, p. 411, 2005c, pp. 18, 102, 115), whereas North America also takes data from Central as well as South America into account (for example: Rugman, 2003b, p. 411, 2005c, p. 102). Not only the countries but also the titles considered for Asia/Asia-Pacific as a triad region fluctuates between contributions, which could foster an impression where the application of a broad triad by Rugman and his co-authors lacks in detail and precision and, based on data availability and aggregation, can almost rather be considered a three-region system consisting of the Americas, Europe, the Middle East and Africa (EMEA) and Asia-Pacific (which incl. Oceania, sometimes the Middle East or Africa as well; author’s note).52 In contrast, Aggarwal et al. (2011) apply a six-region approach to their data that groups the worlds’ countries by the regions Africa, Asia, Europe, North and Central America, Oceania and South America. Regarding the consideration of an institutional perspective on regional splits and groupings, the authors argue that the six-region system is “defined along geographic rather than political lines, because the political map can change over time” (cf. Aggarwal et al., 2011, p. 562) and therefore increases stability. At the same time, the approach satisfies much of the critique stated for the use of the triad/broad triad (Aggarwal et al., 2011, p. 562). The existence of alternative regional splits and groupings is also intensely considered by Berrill (2015, pp. 98–99), who takes into account six (seven) 51 The respective countries are not precisely stated, listed or discussed by Rugman (2000b, pp. 114–116). 52 See the chronological overview from the previous subchapter for examples and details on the regional groupings applied. Also, both Stevens and Bird (2004) as well as Aguilera et al. (2007) argue that the connection offered between regional grouping applied and data as analyzed by Rugman and his co-authors can be misleading. In one case, namely Rugman (2005c, pp. 15, 18), the data for Asia also include Africa and the Middle East.

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different regional groupings to examine the robustness of the results obtained from an application of the ABHK classification system on sales (subsidiary) data. Berrill (2015, p. 98) thereby also acknowledges that firms are not obliged to report their accounting data on such a fine-grained level so that the data could be applied for the analysis of all regional groupings theoretically available. While Berrill (2015, p. 95) shares the deficits associated with the use of the triad in line with prior research, the contribution considers and applies the three-region system of the Americas, EMEA and Asia (-Pacific; author’s note).53 The work by Berrill (2015) consequently outlines and demonstrates that the regional and global debate is on an edge between availability from financial/geographic segment data as well as how regional grouping concepts are applied, which ultimately represents a sophistication if compared to the original research. Regarding these more recent or detailed contributions, the allocation of 19 countries, namely Armenia, Azerbaijan, Bahrain, Egypt, Georgia, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Russia, Saudi Arabia, Syria, Turkey, United Arab Emirates, and Yemen, remains nevertheless questionable. Russia, for example, is a country that holds large stakes of territory in both Asia and Europe. While Berrill (2015, pp. 90, 100) considers Russia to be part of Asia, it could also be preferable to include Russia as part of an European region, for example, depending on the perspective applied to the nation’s economic ties. Additional examples for questioning can be drawn from looking at countries such as Armenia, Azerbaijan, and Georgia, which, with respect to the underlying dimension, are either part of Asia or Europe, or, from a socio-political perspective, the Middle East.54 Likewise, different reasoning exists whereas Egypt could be allocated to both the Middle East and Africa, if these are considered to be separate regions. While using the formats and regional groupings available from ARS, it is therefore understandable that some authors decide to follow more practical-oriented approaches within their contributions (for example: Kolk et al., 2014; Whalley and Curwen, 2014). Whilst the specific details from the 100 contributions under review are mostly available from the chronological overview in Subchapter 3.3, Table 3.8 illustrates the different regional groupings as applied. The application of regional 53 As acknowledged by Berrill (2015, p. 98), any results from the use of the ABHK classification under a three-region system tend to favor the stake of global MNEs as the respective framework does not consider any threshold levels. 54 See United Nations (1999, p. 18), who consider Armenia, Azerbaijan and Georgia to be part of Asia. In contrast, the three countries as well as Russia are considered to be part of Europe by Aggarwal et al. (2011, p. 562).

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splits thereby ranges between a minimum of two (2) and up to ten (10) regions, which also depends on whether a domestic perspective taken can be counted as a separate grouping or not. The research reviewed also provide a considerable amount of special cases, whereby argumentation exists for these regional splits and groupings to be equally considered either a two- or three-, a three- or fouras well as a four- to five-region system. Consequently, a minimum of five different regional splits, namely the three-, four-, five-, six- or seven-region system, can be identified. Throughout these systems, differences exist on how regional groupings are then applied by the respective authors. For a three-region system, for example, three different regional groupings can be identified: the triad, the broad triad as well as a system separating for Asia-Pacific & Oceania, EMEA and the Americas. Whereby the respective authors usually provide an individual line of argumentation with reasoning for the split and grouping applied, some contributions, such as Flores and Aguilera (2007) and Berrill (2015), apply more than one split for an assessment of the data. Additionally, the groupings provided may contain further variety regarding the ultimate connection between countries and regional groupings. Therefore, Table 3.8 only provides an approximation to indicate how the regional splits and groupings from the debate are applied throughout the 100 contributions dealing with regional and global MNEs. With respect to the high amount of works provided by Rugman and his co-authors, it is thereby not surprising that the dominant stake of the contributions applies a three-region-, triad- or broad triad-related split and grouping. At the same time, the review reveals that none of the other regional splits under consideration occurs to hold a similarly prevalent stake. This finding not only emphasizes the practicability of a three-region system or (broad) triad perspective, but also nurtures questioning what can be gained from this variety of regional groupings or more fine-grained approaches to regional groupings, if the outcome of this research is neither providing a (direct) possibility of comparison comparability to the original contributions nor guidance on how data-related limitations from availability and regional splits and groupings can be brought into line.

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Table 3.8 Regional groupings applied for regional and global MNEs.55 Regions

Regional grouping

Examples from the debate

Applied in %

2 to 3

China or Japan (domestic)/Asia/Outside Asia

Yin and Choi (2005); Chadha and Berrill (2016)

65

Asia-Pacific & Oceania/EMEA/Americas

Partly: Rugman and co-authors; Berrill

-

3 to 4

Americas/Asia/Europe, plus either of the following: other countries, unidentified, outside the triad

Dunning et al. (2007); < 10 Rugman and Li (2007); Flores and Aguilera (2007)

4

Asia(-Pacific)/Europe/North America/South America

Verbeke and Brugman (2005); < 2 Rugman and Dossett (2005)

4 to 5

US/Europe/Japan/Other Asia/Elsewhere

Grosse (2005)

-

Asia/Latin America/North America/Western Europe (titled Quad, missing Rest of World; author’s note)

Akhter and Beno (2011)