The authors acknowledge helpful comments from the associate editor Veronique Ambrosini and four anonymous reviewers. Financial support to the second author for this project was partially provided by a Standard Research Grant of the Social Science and Humanities Research Council of Canada (File #: 410-2010-1589).
Why the Home Region Matters: Location and Regional Multinationals
Article first published online: 28 FEB 2012
© 2012 The Author(s). British Journal of Management © 2012 British Academy of Management
British Journal of Management
Volume 24, Issue 4, pages 463–479, December 2013
How to Cite
Rugman, A. M. and Oh, C. H. (2013), Why the Home Region Matters: Location and Regional Multinationals. British Journal of Management, 24: 463–479. doi: 10.1111/j.1467-8551.2012.00817.x
- Issue published online: 27 OCT 2013
- Article first published online: 28 FEB 2012
- Social Science and Humanities Research Council of Canada. Grant Number: 410-2010-1589
Much of the literature in international business analysing the multinational enterprise uses the country as the relevant environmental parameter. This paper presents both theoretical and empirical evidence to demonstrate that country-level analysis now needs to be augmented by analysis at the ‘regional’ level of the broad triad markets of Europe, North America and the Asia Pacific. The great majority of the world's 500 largest firms concentrate their activities within their home region of the triad. This study uses variance component analysis and finds that this home region effect outperforms the country effect. Together, the regional and industry effects explain most of the geographic expansion of multinational enterprises (MNEs), whereas country, firm and year effects are very minor. The new data and variance component analysis on the activities of large MNEs reported here suggest that new thinking is required about the importance of large regions of the triad as the relevant unit of analysis for business strategy to supplement the conventional focus on the country.