Towards a Theory of Regional Multinationals: A Transaction Cost Economics Approach
AbstractThis paper develops new theory to help explain the recent empirical work that demonstrates the profound lack of global sales, with 320 of the 380 largest firms in the world averaging 80% of their sales within their home region. Transaction cost economics (TCE) concepts are used to explain why large firms adopt regional, rather than global, strategies. A new theory of international management built to explain regional-level strategy and structure is developed. In this, a firm's geographic scope of sales is limited by the predominant regional reach of its firm level capabilities, due to TCE reasons.
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Bibliographic InfoPaper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2005-04.
Date of creation: 2005
Date of revision:
Publication status: PUblished in Management International Review, 2005
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