A Perspective on Regional and Global Strategies of Multinational Enterprises

Alan Rugman and Alain Verbeke
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Alain Verbeke: University of Calgary, Faculty of Management

No 2004-19, Working Papers from Indiana University, Kelley School of Business, Department of Business Economics and Public Policy

Abstract: It is widely accepted that multinational enterprises (MNEs) are the key drivers of globalization. The ultimate test to assess the level of globalization is the actual penetration of markets across the globe, especially in the broad ‘triad’ markets of NAFTA, the European Union and Asia. Yet, data on the activities of the 500 largest MNEs reveal that very few actually operate globally. For 320 of the 380 for which geographic sales data are available, an average of 80.3% of their total sales are in their home region of the triad. This means that the world’s largest firms are not global, but regionally based in terms of breadth and depth of market coverage. Globalization thus reflects a special, and rather unusual, outcome of doing international business, and regional strategies are more relevant than global ones. This has important implications for various strands of mainstream international business research, as well as for the broader managerial debate on the design of optimal strategies and governance structures for MNEs.

Keywords: Semi-globalization; regional strategy triad; value chain; firm specific advantages; localization; global strategy (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (426)

Published in Journal of International Business Studies, 2004

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Related works:
Chapter: A Perspective on Regional and Global Strategies of Multinational Enterprises (2005)
Journal Article: A perspective on regional and global strategies of multinational enterprises (2004)
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