IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v53y2018i6p896-910.html
   My bibliography  Save this article

The role of MNEs’ internationalization patterns in their regional integration of FDI locations

Author

Listed:
  • Arregle, Jean-Luc
  • Miller, Toyah L.
  • Hitt, Michael A.
  • Beamish, Paul W.

Abstract

Multinational enterprises (MNEs) use the regional aggregation and integration of their foreign direct investments as an important part of their internationalization. Internationalization decisions are integrated at the region level; however, little work has focused on explaining the extent of this regional integration. We develop theoretical arguments and test new hypotheses about MNEs’ general international experience and international geographic scope (i.e., institutional diversity and international dispersion) as predictors of their extent of regional integration. The results from a sample of Japanese MNEs validate these different effects, suggesting these MNE level variables are important for regional influences on their internationalization decisions. The results further our understanding of how MNEs organize their internationalization and strategic geographic foci.

Suggested Citation

  • Arregle, Jean-Luc & Miller, Toyah L. & Hitt, Michael A. & Beamish, Paul W., 2018. "The role of MNEs’ internationalization patterns in their regional integration of FDI locations," Journal of World Business, Elsevier, vol. 53(6), pages 896-910.
    • Handle: RePEc:eee:worbus:v:53:y:2018:i:6:p:896-910
    DOI: 10.1016/j.jwb.2018.07.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951617303772
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jwb.2018.07.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cameron,A. Colin & Trivedi,Pravin K., 2013. "Regression Analysis of Count Data," Cambridge Books, Cambridge University Press, number 9781107667273.
    2. Andrew Delios & Witold J. Henisz, 2003. "Political hazards, experience, and sequential entry strategies: the international expansion of Japanese firms, 1980–1998," Strategic Management Journal, Wiley Blackwell, vol. 24(11), pages 1153-1164, November.
    3. Bruce Kogut & Udo Zander, 1992. "Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology," Organization Science, INFORMS, vol. 3(3), pages 383-397, August.
    4. Oded Shenkar, 2001. "Cultural Distance Revisited: Towards a More Rigorous Conceptualization and Measurement of Cultural Differences," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 519-535, September.
    5. Jan Johanson & Jan-Erik Vahlne, 2009. "The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1411-1431, December.
    6. Alan M. Rugman & Alain Verbeke, 2005. "A Perspective on Regional and Global Strategies of Multinational Enterprises," Chapters, in: Analysis of Multinational Strategic Management, chapter 8, pages 104-119, Edward Elgar Publishing.
    7. Daniel Sullivan, 1994. "Measuring the Degree of Internationalization of a Firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 325-342, June.
    8. René Belderbos & Jianglei Zou, 2006. "Foreign Investment, Divestment and Relocation by Japanese Electronics Firms in East Asia," Asian Economic Journal, East Asian Economic Association, vol. 20(1), pages 1-27, March.
    9. Christian Geisler Asmussen, 2009. "Local, regional, or global? Quantifying MNE geographic scope," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1192-1205, September.
    10. Brian K. Boyd & Steve Gove & Michael A. Hitt, 2005. "Construct measurement in strategic management research: illusion or reality?," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 239-257, March.
    11. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(3), pages 255-255, May.
    12. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    13. Henrik Dellestrand & Philip Kappen, 2012. "The effects of spatial and contextual factors on headquarters resource allocation to MNE subsidiaries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(3), pages 219-243, April.
    14. Lilach Nachum & Srilata Zaheer, 2005. "The persistence of distance? The impact of technology on MNE motivations for foreign investment," Strategic Management Journal, Wiley Blackwell, vol. 26(8), pages 747-767, August.
    15. Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(2), pages 305-336, Fall.
    16. Marie Louise Mors, 2010. "Innovation in a global consulting firm: when the problem is too much diversity," Strategic Management Journal, Wiley Blackwell, vol. 31(8), pages 841-872, August.
    17. Thomas Hutzschenreuter & Johannes C. Voll & Alain Verbeke, 2011. "The Impact of Added Cultural Distance and Cultural Diversity on International Expansion Patterns: A Penrosean Perspective," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 305-329, March.
    18. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
    19. Douglas Dow & Jorma Larimo, 2011. "Disentangling the Roles of International Experience and Distance in Establishment Mode Choice," Management International Review, Springer, vol. 51(3), pages 321-355, June.
    20. Ricardo Flores & Ruth V Aguilera & Arash Mahdian & Paul M Vaaler, 2013. "How well do supranational regional grouping schemes fit international business research models?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(5), pages 451-474, June.
    21. Subramanian Rangan, 2000. "Search and Deliberation in International Exchange: Microfoundations to Some Macro Patterns," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(2), pages 205-222, June.
    22. Alan M. Rugman & Alain Verbeke, 2005. "A Note on the Transnational Solution and the Transaction Cost Theory of Multinational Strategic Management," Chapters, in: Analysis of Multinational Strategic Management, chapter 2, pages 16-26, Edward Elgar Publishing.
    23. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
    24. Shige Makino & Takehiko Isobe & Christine M. Chan, 2004. "Does country matter?," Strategic Management Journal, Wiley Blackwell, vol. 25(10), pages 1027-1043, October.
    25. Rebecca Piekkari & Phillip C. Nell & Pervez N. Ghauri, 2010. "Regional Management as a System," Management International Review, Springer, vol. 50(4), pages 513-532, August.
    26. Jane W Lu, 2002. "Intra- and Inter-organizational Imitative Behavior: Institutional Influences on Japanese Firms' Entry Mode Choice," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(1), pages 19-37, March.
    27. Laszlo Tihanyi & David A Griffith & Craig J Russell, 2005. "The effect of cultural distance on entry mode choice, international diversification, and MNE performance: a meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 270-283, May.
    28. Kent Eriksson & Jan Johanson & Anders Majkgård & D. Deo Sharma, 2000. "Effect of Variation on Knowledge Accumulation in the Internationalization Process," International Studies of Management & Organization, Taylor & Francis Journals, vol. 30(1), pages 26-44, March.
    29. Michael C. J. Mayer & Christian Stadler & Julia Hautz, 2015. "The relationship between product and international diversification: The role of experience," Strategic Management Journal, Wiley Blackwell, vol. 36(10), pages 1458-1468, October.
    30. Kent Eriksson & Jan Johanson & Anders Majkgård & D Deo Sharma, 1997. "Experimental Knowledge and Costs in the Internationalization Process," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(2), pages 337-360, June.
    31. Richard Williams, 2012. "Using the margins command to estimate and interpret adjusted predictions and marginal effects," Stata Journal, StataCorp LP, vol. 12(2), pages 308-331, June.
    32. Oh, Chang Hoon & Li, Jing, 2015. "Commentary: Alan Rugman and the theory of the regional multinationals," Journal of World Business, Elsevier, vol. 50(4), pages 631-633.
    33. Alain Verbeke & Christian Geisler Asmussen, 2016. "Global, Local, or Regional? The Locus of MNE Strategies," Journal of Management Studies, Wiley Blackwell, vol. 53(6), pages 1051-1075, September.
    34. Jan-Erik Vahlne & Inge Ivarsson, 2014. "The globalization of Swedish MNEs: Empirical evidence and theoretical explanations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(3), pages 227-247, April.
    35. Gerry McNamara & Paul M Vaaler, 2000. "The Influence of Competitive Positioning and Rivalry on Emerging Market Risk Assessment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(2), pages 337-347, June.
    36. Anthony Goerzen & Paul W. Beamish, 2003. "Geographic scope and multinational enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1289-1306, December.
    37. Birger Maekelburger & Christian Schwens & Ruediger Kabst, 2012. "Asset specificity and foreign market entry mode choice of small and medium-sized enterprises: The moderating influence of knowledge safeguards and institutional safeguards," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(5), pages 458-476, June.
    38. Greene, William, 2010. "Testing hypotheses about interaction terms in nonlinear models," Economics Letters, Elsevier, vol. 107(2), pages 291-296, May.
    39. Alain Verbeke & Lei Li & Anthony Goerzen, 2009. "Toward More Effective Research on the Multinationality-Performance Relationship," Management International Review, Springer, vol. 49(2), pages 149-161, April.
    40. Sjoerd Beugelsdijk & Philip McCann & Ram Mudambi, 2010. "Introduction: Place, space and organization-- economic geography and the multinational enterprise," Journal of Economic Geography, Oxford University Press, vol. 10(4), pages 485-493, July.
    41. Verbeke, Alain & Kano, Liena & Yuan, Wenlong, 2016. "Inside the regional multinationals: A new value chain perspective on subsidiary capabilities," International Business Review, Elsevier, vol. 25(3), pages 785-793.
    42. Alvaro Cuervo‐Cazurra & Mehmet Erdem Genc, 2011. "Obligating, Pressuring, and Supporting Dimensions of the Environment and the Non‐Market Advantages of Developing‐Country Multinational Companies," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 441-455, March.
    43. Jean-Luc Arregle & Toyah L Miller & Michael A Hitt & Paul W Beamish, 2016. "How does regional institutional complexity affect MNE internationalization?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(6), pages 697-722, August.
    44. Alan M Rugman & Alain Verbeke, 2007. "Liabilities of regional foreignness and the use of firm-level versus country-level data: a response to Dunning et al. (2007)," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(1), pages 200-205, January.
    45. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(2), pages 81-98, March.
    46. Rugman,Alan M., 2005. "The Regional Multinationals," Cambridge Books, Cambridge University Press, number 9780521842655.
    47. Pankaj Ghemawat, 2003. "Semiglobalization and international business strategy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(2), pages 138-152, March.
    48. Gregory Jackson & Richard Deeg, 2008. "Comparing capitalisms: understanding institutional diversity and its implications for international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 540-561, June.
    49. Gupta, Vipin & Hanges, Paul J. & Dorfman, Peter, 2002. "Cultural clusters: methodology and findings," Journal of World Business, Elsevier, vol. 37(1), pages 11-15, April.
    50. Tarun Khanna & Joe Kogan & Krishna Palepu, 2006. "Globalization and Similarities in Corporate Governance: A Cross-Country Analysis," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 69-90, February.
    51. Klaus E. Meyer & Ram Mudambi & Rajneesh Narula, 2011. "Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 235-252, March.
    52. Wilkinson, Timothy J. & Peng, George Z. & Brouthers, Lance Eliot & Beamish, Paul W., 2008. "The diminishing effect of cultural distance on subsidiary control," Journal of International Management, Elsevier, vol. 14(2), pages 93-107, June.
    53. Elitsa R Banalieva & Charles Dhanaraj, 2013. "Home-region orientation in international expansion strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(2), pages 89-116, February.
    54. Eriksson, Kent & Chetty, Sylvie, 2003. "The effect of experience and absorptive capacity on foreign market knowledge," International Business Review, Elsevier, vol. 12(6), pages 673-695, December.
    55. Edward H. Bowman & Constance E. Helfat, 2001. "Does corporate strategy matter?," Strategic Management Journal, Wiley Blackwell, vol. 22(1), pages 1-23, January.
    56. Chakravarty, Dwarka & Hsieh, Ying-Ying & Schotter, Andreas P.J. & Beamish, Paul W., 2017. "Multinational enterprise regional management centres: Characteristics and performance," Journal of World Business, Elsevier, vol. 52(2), pages 296-311.
    57. Aguilera, Ruth V. & Flores, Ricardo G. & Vaaler, Paul M., 2007. "Is It All a Matter of Grouping? Examining the Regional Effect in Global Strategy Research," Working Papers 07-0106, University of Illinois at Urbana-Champaign, College of Business.
    58. Alan M. Rugman & Alain Verbeke, 2005. "Towards a Theory of Regional Multinationals: A Transaction Cost Economics Approach," Working Papers 2005-04, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    59. Gongming Qian & Lee Li & Ji Li & Zhengming Qian, 2008. "Regional diversification and firm performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(2), pages 197-214, March.
    60. Juan Alcácer & Minyuan Zhao, 2012. "Local R&D Strategies and Multilocation Firms: The Role of Internal Linkages," Management Science, INFORMS, vol. 58(4), pages 734-753, April.
    61. Jean-Luc Arregle & Paul W Beamish & Louis Hébert, 2009. "The regional dimension of MNEs' foreign subsidiary localization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(1), pages 86-107, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Flavio Jorge Freire D Andrade Battistuzzo & Mario Henrique Ogasavara, 2023. "Survival of Japanese subsidiaries: impacts of sequential investment, institutional distances, and location factors," Asian Business & Management, Palgrave Macmillan, vol. 22(3), pages 903-934, July.
    2. Benjamin Rosa & Philippe Gugler & Alain Verbeke, 0. "Regional and global strategies of MNEs: Revisiting Rugman & Verbeke (2004)," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-9.
    3. Benjamin Rosa & Philippe Gugler & Alain Verbeke, 2020. "Regional and global strategies of MNEs: Revisiting Rugman & Verbeke (2004)," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(7), pages 1045-1053, September.
    4. Shih, Yu-Yuan & Lin, Chih-An, 2022. "Co-location with marketing value activities as manufacturing upgrading in a COVID-19 outbreak era," Journal of Business Research, Elsevier, vol. 148(C), pages 410-419.
    5. Houldsworth, Elizabeth & Marra, Marianna & Brewster, Chris & Brookes, Michael & Wood, Geoffrey, 2021. "Performance appraisal and MNEs: The impact of different capitalist archetypes," International Business Review, Elsevier, vol. 30(5).
    6. Xu, Kai & Hitt, Michael A. & Brock, David & Pisano, Vincenzo & Huang, Lulu S.R., 2021. "Country institutional environments and international strategy: A review and analysis of the research," Journal of International Management, Elsevier, vol. 27(1).
    7. Md. Salamun Rashidin & Sara Javed & Lingming Chen & Wang Jian, 2020. "Assessing the Competitiveness of Chinese Multinational Enterprises Development: Evidence From Electronics Sector," SAGE Open, , vol. 10(1), pages 21582440198, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jean-Luc Arregle & Toyah L Miller & Michael A Hitt & Paul W Beamish, 2016. "How does regional institutional complexity affect MNE internationalization?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(6), pages 697-722, August.
    2. Lee, Jong Min, 2019. "Intra- and inter-regional diversification, subsidiary value chain activities and expatriate utilization," Journal of International Management, Elsevier, vol. 25(3), pages 1-1.
    3. Conti, Claudio Ramos & Parente, Ronaldo & de Vasconcelos, Flávio C., 2016. "When distance does not matter: Implications for Latin American multinationals," Journal of Business Research, Elsevier, vol. 69(6), pages 1980-1992.
    4. de Jong, Gjalt & van Houten, Jerry, 2014. "The impact of MNE cultural diversity on the internationalization-performance relationship," International Business Review, Elsevier, vol. 23(1), pages 313-326.
    5. Danchi Tan & Weichieh Su & Joseph T. Mahoney & Yasemin Kor, 2020. "A review of research on the growth of multinational enterprises: A Penrosean lens," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 498-537, June.
    6. Youngok Kim & Sidney J Gray, 2017. "Internationalization strategy and the home-regionalization hypothesis: The case of Australian multinational enterprises," Australian Journal of Management, Australian School of Business, vol. 42(4), pages 673-691, November.
    7. Piaskowska, D., 2005. "Essays on firm growth and value creation," Other publications TiSEM 89053610-79c6-4c52-9d1c-6, Tilburg University, School of Economics and Management.
    8. Aggarwal, Raj & Berrill, Jenny & Hutson, Elaine & Kearney, Colm, 2011. "What is a multinational corporation? Classifying the degree of firm-level multinationality," International Business Review, Elsevier, vol. 20(5), pages 557-577, October.
    9. Hutzschenreuter, Thomas & Matt, Tanja & Kleindienst, Ingo, 2020. "Going subnational: A literature review and research agenda," Journal of World Business, Elsevier, vol. 55(4).
    10. Raquel García-García & Esteban García-Canal & Mauro F. Guillén, 2019. "International Dispersion and Profitability: An Institution-Based Approach," Management International Review, Springer, vol. 59(6), pages 855-888, December.
    11. Thomas Hutzschenreuter & Tanja Matt, 2017. "MNE internationalization patterns, the roles of knowledge stocks, and the portfolio of MNE subsidiaries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(9), pages 1131-1150, December.
    12. Dirk Ulrich Gilbert & Patrick Heinecke, 2014. "Success Factors of Regional Strategies for Multinational Corporations: Exploring the Appropriate Degree of Regional Management Autonomy and Regional Product/Service Adaptation," Management International Review, Springer, vol. 54(5), pages 615-651, October.
    13. Andreas P. J. Schotter & Maximilian Stallkamp & Brian C. Pinkham, 2017. "MNE Headquarters Disaggregation: The Formation Antecedents of Regional Management Centers," Journal of Management Studies, Wiley Blackwell, vol. 54(8), pages 1144-1169, December.
    14. Chidlow, Agnieszka & Holmström-Lind, Christine & Holm, Ulf & Tallman, Steve, 2015. "Do I stay or do I go? Sub-national drivers for post-entry subsidiary development," International Business Review, Elsevier, vol. 24(2), pages 266-275.
    15. Minyoung Kim & Curba Morris Lampert & Raja Roy, 2020. "Regionalization of R&D activities: (Dis)economies of interdependence and inventive performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(7), pages 1054-1075, September.
    16. Demirbag, Mehmet & Glaister, Keith W. & Sengupta, Abhijit, 2020. "Which regions matter for MNEs? The role of regional and firm level differences," Journal of World Business, Elsevier, vol. 55(1).
    17. Alan M. Rugman & Alain Verbeke & Quyen T. K. Nguyen, 2011. "Fifty Years of International Business Theory and Beyond," Management International Review, Springer, vol. 51(6), pages 755-786, December.
    18. Christian Schwens & Florian B Zapkau & Keith D Brouthers & Lina Hollender, 2018. "Limits to international entry mode learning in SMEs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 809-831, September.
    19. Hendriks, Guus, 2020. "How the spatial dispersion and size of country networks shape the geographic distance that firms add during international expansion," International Business Review, Elsevier, vol. 29(6).
    20. Heechun Kim & Jie Wu & Douglas A. Schuler & Robert E. Hoskisson, 2020. "Chinese multinationals’ fast internationalization: Financial performance advantage in one region, disadvantage in another," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(7), pages 1076-1106, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:worbus:v:53:y:2018:i:6:p:896-910. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.