Inside the regional multinationals: A new value chain perspective on subsidiary capabilities

Alain Verbeke, Liena Kano and Wenlong Yuan

International Business Review, 2016, vol. 25, issue 3, 785-793

Abstract: We discuss the strategic significance of ‘regional multinationals’, and highlight a number of conceptual and empirical challenges that a regional multinationals research agenda should address. In line with the intellectual legacy of the late Alan Rugman, we argue that to deepen our understanding of regional strategy and organization, we cannot limit ourselves to studying the multinational enterprise’s (MNE’s) geographic footprint, but we must also explore the entire spectrum of regional elements in the firm’s organizational functioning, including the impact of the regional effect on subsidiary capabilities across the value chain. More specifically, we argue that operating in a host region can affect a foreign subsidiary’s capabilities: subsidiaries of outsider MNEs (meaning headquartered outside of the region) are disadvantaged as compared to insider MNE subsidiaries. This regional effect, however, is predicted to vary according to the value chain activity considered. Further, the regional effect will tend to diminish over time, though at a different pace for the various value chain activities.

Keywords: Regional multinational; Regional strategy; Subsidiary development; Expansion and growth; Internalization theory; Regional distance; Subsidiary capabilities; Regional effect; Learning effect (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:25:y:2016:i:3:p:785-793

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DOI: 10.1016/j.ibusrev.2016.01.019

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