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How well do supranational regional grouping schemes fit international business research models?

Author

Listed:
  • Ricardo Flores

    (School of Management, Australian School of Business, University of New South Wales, Sydney, Australia)

  • Ruth V Aguilera

    (1] Department of Business Administration, College of Business, University of Illinois at Urbana-Champaign, USA[2] ESADE Business School, Barcelona, Spain)

  • Arash Mahdian

    (Wolfram Research, Champaign, USA)

  • Paul M Vaaler

    (Department of Strategic Management and Entrepreneurship, Carlson School of Management, University of Minnesota, Minneapolis, USA)

Abstract

International business (IB) research has long acknowledged the importance of supranational regional factors in building models to explain phenomena such as where multinational corporations (MNCs) choose to locate. Yet criteria for defining regions based on similar factors vary substantially, thus undermining consensus regarding which regional grouping schemes fit IB research models better. In response, we develop and empirically validate a theory of comparative regional scheme assessment for model-building purposes assuming that: (1) schemes can be classified based on their source of similarity; and (2) schemes within the same similarity class can be assessed for their structural coherence, based on group contiguity and compactness. Schemes with better structural coherence will also exhibit better fit with IB research models. We document support for our theory in comparative analyses of regional schemes used to explain where US-based MNCs locate operations around the world. Geography-, culture- and trade and investment-based schemes with better structural coherence exhibit better initial fit with MNC location models and less change in fit after modest scheme refinement using a simulated annealing optimization algorithm. Our approach provides criteria for comparing similar regional grouping schemes and identifying “best-in-class” schemes tailored to models of MNC location choice and other IB research models.

Suggested Citation

  • 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.
    • Handle: RePEc:pal:jintbs:v:44:y:2013:i:5:p:451-474
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    Cited by:

    1. Hutzschenreuter, Thomas & Matt, Tanja & Kleindienst, Ingo, 2020. "Going subnational: A literature review and research agenda," Journal of World Business, Elsevier, vol. 55(4).
    2. Nieto, María Jesús & Rodríguez, Alicia & Hernández, Virginia, 2022. "International sourcing and the productivity of SMEs in transition countries: Formal and informal ‘region effects’ and the communist footprint," Journal of Business Research, Elsevier, vol. 145(C), pages 347-359.
    3. Jorge MONGAY, 2017. "Market Economies Potentialities and Cultural Clusters. A Global and Longitudinal Study," Expert Journal of Economics, Sprint Investify, vol. 5(1), pages 1-13.
    4. Elias Asproudis & Nadeem Khan & Nada Korac-Kakabadse, 2019. "Game of Regional Environmental Policy: Europe and US," Journal of Industry, Competition and Trade, Springer, vol. 19(1), pages 1-20, March.
    5. 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.
    6. Yamlaksira S. Getachew & Roger Fon & Elie Chrysostome, 2023. "On the location choices of African multinational enterprises: Do supranational economic institutions matter?," Journal of International Business Policy, Palgrave Macmillan, vol. 6(4), pages 453-490, December.
    7. Lee, Jeoung Yul & Yang, Young Soo & Park, Byung Il, 2020. "Interplay between dual dimensions of knowledge sharing within globalized chaebols: The moderating effects of organization size and global environmental munificence," International Business Review, Elsevier, vol. 29(6).
    8. Sjoerd Beugelsdijk & Tatiana Kostova & Kendall Roth, 2017. "An overview of Hofstede-inspired country-level culture research in international business since 2006," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(1), pages 30-47, January.
    9. 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.
    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. 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.
    12. 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).
    13. Mark F Peterson & Mikael Søndergaard & Aycan Kara, 2018. "Traversing cultural boundaries in IB: The complex relationships between explicit country and implicit cultural group boundaries at multiple levels," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(8), pages 1081-1099, October.
    14. 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.
    15. Oleksandr Morozov & Yuriy Seniuk, 2018. "What kind of a national innovation system is necessary for the future of Ukraine?," Ukrainian Journal Ekonomist, Yuriy Kovalenko, issue 5, pages 4-21, May.
    16. Bruno Amann & Jacques Jaussaud & Johannes Schaaper, 2014. "Clusters and Regional Management Structures by Western MNCs in Asia: Overcoming the Distance Challenge," Management International Review, Springer, vol. 54(6), pages 879-906, December.
    17. 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.
    18. Michel Hermans & William Newburry & Marcelo J. Alvarado-Vargas & Carlos M. Baldo & Armando Borda & Edwin G. Durán-Zurita & José Maurício Galli Geleilate & Massiel Guerra & Maria Virginia Lasio Morello, 2017. "Attitudes towards women’s career advancement in Latin America: The moderating impact of perceived company international proactiveness," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(1), pages 90-112, January.
    19. Schotter, Andreas P.J. & Buchel, Olha & Vashchilko (Lukoianova), Tatiana, 2018. "Interactive visualization for research contextualization in international business," Journal of World Business, Elsevier, vol. 53(3), pages 356-372.
    20. 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.
    21. 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.
    22. Yujin Jeong & Jordan I. Siegel, 2020. "How important is regional vs. global scope? An examination of U.S. multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(7), pages 1142-1160, September.
    23. Bazel-Shoham, Ofra & Lee, Sang Mook & Ahammad, Mohammad Faisal & Tarba, Shlomo Y. & Alon, Ilan, 2023. "IP protection and ownership in cross-border acquisitions," International Business Review, Elsevier, vol. 32(3).
    24. 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.

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