Geographic Scope of Operations by Multinational Companies:: An Exploratory Study of Regional and Global Strategies

B. Elango

European Management Journal, 2004, vol. 22, issue 4, 431-441

Abstract: In recent years, there has been an emerging stream of studies that challenge the idea of the importance of globalization for companies. One study even calls the common assumptions of globalization a "myth" (Rugman, A., 2000). Needless to say, this particular perspective has generated a lot of interest and debate. The present study seeks to review the regionalization strategies of the world's largest MNCs and answer the following two empirical questions: What is the relationship between regionalization and global operations and performance? and What are the significant differences across MNCs that are regionalized in their operations relative to those that are not? Using a sample of 130 firms derived from the Directory of Multinationals listing of the largest multinationals in the world, hierarchical/sequential regression models and cluster analysis were used in the testing of hypotheses. Contrary to expectations, study findings indicate that an MNC's global (i.e., non-regional) operations have higher profit margins than regional operations. Study findings also indicate that three distinct types of MNCs exist, namely: regional, global, and home-based. As argued by the proponents of regionalization, roughly 49% of the MNCs studied had a regional scope in international operations. Implications for theory and practice are presented.

Keywords: Regional; strategy; Global; strategy; Performance (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0263237304000647
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eurman:v:22:y:2004:i:4:p:431-441

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/115/bibliographic
http://www.elsevier. ... me/115/bibliographic

Access Statistics for this article

European Management Journal is currently edited by Michael Haenlein

More articles in European Management Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().