An empirical analysis of the determinants of global integration

Stephen J. Kobrin

Strategic Management Journal, 1991, vol. 12, issue S1, 17-31

Abstract: The primary concern of this paper is the structural characteristics of an industry that generate returns to transnational integration: manufacturing scale economies and technological intensity. Integration is operationalized as intrafirm flows of resources. Intrafirm trade as a proportion of all international sales is used as an index of integration across 56 manufacturing industries containing U.S.‐based firms. Ordinary least‐squares analysis of the determinants of integration—technological intensity, manufacturing scale, advertising intensity, and internationalization (as a control) reveals that technological intensity, advertising intensity, and the control are significant and scale is not. I argue that technology is the primary determinant of cross‐border integration and the importance of manufacturing scale has been overemphasized, and conclude by discussing the implications of the increasing cost and complexity of technology for the state‐based political system.

Date: 1991
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