Zoom In, Zoom Out, and Beyond: Locational boundaries in International Business

Zoom In, Zoom Out, and Beyond: Locational boundaries in International Business open_in_new

Special Issue Editors

Deadline for submission:  October 31, 2015

Tentative publication date: Spring 2017

Introduction

Traditional international business (IB) literature uses a country as a primary geographic unit of analysis in studies of strategic behavior and performance of multinational enterprises (MNEs) (Dunning, 1988; Zaheer, 1995). In recent years, two streams of IB research have emerged to focus on different levels and kinds of geographic units to study the locational effects. On one side, a line of research has begun to zoom in and use finer geographic units, i.e. subnational regions, to examine the effects of within-country differences (Chan, Makino, & Isobe, 2010; Lorenzen & Mudambi, 2013; Ma, Tong, & Fitza, 2013). On the other side, a group of researchers zoom out and coin the term “regionalization” to argue that MNEs use supra-national regions rather than individual countries to define the primary geographical scope of business (Qian, Li, Li, & Qian, 2008; Qian, Li, & Rugman, 2013; Rugman, 2005). These new advances in IB also echo findings from international economic geography, which suggest that a simple host-home country dichotomy becomes insufficient (Fujita, Krugman, & Venables, 1999; Iammarino & McCann, 2013).

Indeed, some aspects of globalization are inherently geographical (Dicken, 2004) and the explicit incorporation of space in IB analysis holds the promise of significant advancements in our understanding of the world economy.  In the field of IB, the main focus of study has been the effects of transiting from one country to another, what are in reality discontinuous “border effects” in the sense that they change abruptly at national frontiers (Beugelsdijk & Mudambi, 2013). In contrast, economic geography and regional science have focused more on the effects of various forms of “proximity” (viewed as the reverse of “distance effects”) (Boschma, 2005) and these are continuous, in the sense that they change smoothly over space.

IB scholars have long recognized the importance of integrating local contexts into their research (Fujita, Krugman & Venables, 1999; Meyer, Mudambi & Narula, 2011).  However, the nuances of local spatial analysis that have been developed in the large clusters literature in economic geography and regional science (e.g., Malmberg & Maskell, 2002) offer fruitful avenues for enhancing IB theories and models.  Similarly, the analysis of regional economic blocs like the EU, NAFTA, ASEAN and Mercosur has received considerable attention in the international trade literature and this analysis has the potential to inform and extend the regionalization thesis in IB (e.g., Carrere, 2004; Frankel, Stein & Wei, 1997).  These streams of research suggest that the effects of locational factors are multi-level in nature and the locational boundaries of IB should reflect both the diversities and connections between and across different levels and kinds of geographic scopes. Such an approach echoes and complements the literature on the “relational turn” in economic geography (Dicken & Malmberg, 2001), and focuses on the evolution and nature of connections of IB at various spatial scales.

International business activities occur at the interface of different levels of locational structures and different kinds of geographic units.  MNEs must be concerned with local, national and supranational regional and global authorities and other organizations, and international business outcomes are often the result of a complex combination of responses to these different types of influence considered together. Accordingly, classical IB theories, which focus on “general” country-specific characteristics as a primary interest of analysis, should be extended to incorporate (a) more fine-grained information at various subnational levels; (b) more generic information at supranational levels.  Such multi-level analysis holds the promise of significantly improving the specification of IB models and empirical estimates.  It is possible that several effects currently ascribed to country factors may in fact arise either from local characteristics or from supranational regional variation.  Further, different levels may evolve differently and at different rates (Cantwell, Dunning & Lundan, 2010).  Since MNEs co-evolve with local environments, such multi-level analysis has important dynamic aspects as well.

The goal of this Special Issue is thus to encourage research that (a) goes beyond our understanding of traditional IB to focus on the cross-border activities of MNEs across multiple geographic levels; (b) examines the multi-level effects of geographic layers on strategies and performance of MNEs and their foreign subsidiaries; and (c) studies the effects on international business of interactions between different geographic levels of authority or organization themselves. We particularly welcome manuscripts that can stimulate dialogue between different fields of scholarship within and outside the realm of the conventional IB studies (Cantwell and Brannen, 2011). For example, theoretical insights of economic geography, regional science, political economy, and international organization may shed new light on the development of the economic activities of MNEs across economies at different geographic levels of locations. Similarly, recent theoretical and empirical advances in regional and urban studies, geography, political science, sociology, and anthropology may provide new theoretical perspectives for examining the nested structures of economic activities of MNEs across locations.

Topics for the Special Issue

We welcome both theoretical and empirical contributions, and papers that address regional and subnational issues relating to international business activities. We offer a few questions below to provide a sense of what the special issue seeks to address. These questions are illustrative at best and are not intended to set boundaries in terms of the key themes of interest.

  1. How do different IB theories intersect to explain the effects of locations at different levels on international business activities? How can studies outside of the business domain, such as regional and urban studies, political science, sociology, and anthropology, complement the IB theories on the issue?
  2. How do regional, national and subnational differences affect the concentration and diffusion of international business activities within and across regions? For instance, why do MNEs choose different levels of concentration and spread within and across regions? How do these strategies affect market performance of MNEs’ operations?
  3. The international setting consists of different levels and kinds of locational effects. For example, European managers have to follow not only the common EU policies but also distinct national and subnational regulations. How do managers make sense the complex levels/kinds of influence of regulations and design their internationalization strategies? 
  4. Can the history of international relations provide additional explanatory power regarding the location of international business activities and geographic diversification decisions beyond the conventional distance effects? How do these ties affect MNEs’ regional and global strategies?
  5. Given that international business activities are simultaneously embedded in multiple subnational contexts, how does the regional or global portfolio of FDI affect the performance of firms and locations? What are the underlying organizational and relational mechanisms that make such arbitrage possible?  
  6. Industry effects can be subnational, national, regional and global, which has been shown in recent economic geography studies on the strategic roles played by industry clusters. How do these effects interact to affect the behavior and performance of MNEs? In particular, how do the development of new technologies, structure of industry clusters, regional agreements, and changes in host government policies jointly interact to influence MNEs’ internationalization trajectory, agglomeration efforts, and innovation patterns?
  7. A focus on regionalization and subnational regions (and beyond) creates new methodological challenges and also opens new opportunities for IB research. On one hand, how do advances in multi-level modeling help in increasing precision to predict the crossing effects within, between, and across different levels/kinds of MNEs’ locational boundaries? On the other hand, how do qualitative studies can be used to capture the complexities and differentiated contexts of above-mentioned issues?

Submission Process

All manuscripts will be reviewed as a cohort for this special issue. Manuscripts must be submitted in the window between October 15, 2015, and October 31, 2015, at http://mc.manuscriptcentral.com/jibs. All submissions will go through the JIBS regular double-blind review process and follow the standard norms and processes.

For more information about this call for papers, please contact the Special Issue Editors or the JIBS Managing Editor (managing-editor@jibs.net).

References

Beugelsdijk, S. & Mudambi, R. 2013. MNEs as border-crossing multi-location enterprises: The role of discontinuities in geographic space. Journal of International Business Studies, 44: 413-426.

Beugelsdijk, S., Mudambi, R. & McCann, P. 2010. Place, space and organization: Economic geography and the multinational enterprise. Journal of Economic Geography, 10(4): 485-493.

Boschma, R. 2005. Proximity and innovation: a critical assessment. Regional Studies, 39(1): 61-74.

Cantwell, J. & Brannen, M. Y. 2011. Positioning JIBS as an interdisciplinary journal. Journal of International Business Studies, 42: 1-9.

Cantwell, J., Dunning, J. & Lundan, S. 2010. An evolutionary approach to understanding international business activity: the co-evolution of MNEs and the institutional environment. Journal of International Business Studies, 41: 567-586.

Carrere, C. 2004. Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model. European Economic Review, 50(2): 223-247.

Chan, C. M., Makino, S. & Isobe, T. 2010. Does subnational region matter? Foreign affiliate performance in the United States and China. Strategic Management Journal, 31(11): 1226-1243.

Dicken, P. 2004. Geographers and “globalization”: (yet) another missed boat?. Transactions of the Institute of British Geographers, 29: 5–26.

Dicken, P. & Malmberg, A. 2001. Firms in territories: a relational perspective. Economic Geography, 77(4): 345-363.

Dunning, J. H. 1988. The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19(1): 1-31. 

Frankel, J., Stein, E. & Wei, S. 1997. Regional trading blocs in the world economic system. Institute for International Economics, Washington DC.

Fujita, M., Krugman, P. & Venables, T. 1999. The spatial economy: cities, regions and international trade. Cambridge, MA: MIT Press.

Ghemawat, P. 2003. Semi-globalization and international business strategy. Journal of International Business Studies, 34: 138-152.

Iammarino, S. & McCann, P. 2013. Multinationals and economic geography: location, technology and innovation. Edward Elgar, Cheltenham, UK.

Lorenzen, M. & Mudambi, R. 2013. Clusters, connectivity and catch-up: Bollywood and Bangalore in the global economy. Journal of Economic Geography, 13(3), 501-534.

Ma, X., Tong, T. W. & Fitza, M. 2013. How much does subnational region matter to foreign subsidiary performance? Evidence from Fortune Global 500 Corporations’ investment in China. Journal of International Business Studies, 44(1): 66-87.

Makino, S. & Tsang, EWK. 2011. Historical ties and foreign direct investment: an exploratory study. Journal of International Business Studies, 42: 545-557.

Malmberg, A. & Maskell, P. 2002. The elusive concept of localization economies: towards a knowledge-based theory of spatial clustering. Environment and Planning A, 34(3): 429-449.

Meyer, K., Mudambi, R. & Narula, R. 2011. Multinational enterprises and local contexts: the opportunities and challenges of multiple-embeddedness. Journal of Management Studies, 48(2): 235-252.

Porter, M. E. (1994). The role of location in competition. Journal of the Economics of Business, 1(1): 35-40.

Qian, G., Li, L., Li, J. & Qian, Z. 2008. Regional diversification and firm performance. Journal of International Business Studies, 39(2): 197-214.

Qian, G., Li, L. & Rugman, A. M. 2013. Liability of country foreignness and liability of regional foreignness: Their effects on geographic diversification and firm performance. Journal of International Business Studies, 44(6): 635-647.

Rugman, A. M. 2005. The regional multinationals: MNEs and ‘global’ strategic management. Cambridge, UK: Cambridge University Press.

Zaheer, S. 1995. Overcoming the liability of foreignness. Academy of Management Journal, 38(2): 341-363.

About the Guest Editors

Ron Boschma is Full Professor in Innovation Studies at Lund University, and director of the Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE) at Lund University in Sweden. He is also Full Professor in Regional Economics at the Department of Economic Geography at the Faculty of Geosciences, University of Utrecht. He holds a Master’s degree in Social Geography from the University of Amsterdam and a PhD in Economics from the Tinbergen Institute, Faculty of Economics and Econometrics, Erasmus University Rotterdam. He is a current Associate Editor of Regional Studies, having previously served as Deputy Chief Editor (2008-2013). As of 2014, he is Editor of Cambridge Journal of Region, Economy and Society. He is an editorial board member of many major journals. His work has appeared in the Journal of Economic Geography, Annals of Regional Science, Industrial and Corporate Change and Research Policy among many others.

Shige Makino is a Professor in the Department of Management at The Chinese University of Hong Kong. He holds the title of the University’s Outstanding Fellow. He received his PhD from the Ivey School of Business. His research interests include strategies for foreign market entry and survival, performance variations of MNEs, and multilevel issues in international business. He served as a Vice President of the Academy of International Business (AIB) and was Program Chair of the AIB Nagoya conference in 2011. He has published in leading journals, including the Journal of International Business Studies, Strategic Management Journal, and Academy of Management Journal.

Gongming Qian is an Associate Professor and currently Chairman of the Department of Management at The Chinese University of Hong Kong. He received his Ph.D. in International Business from Lancaster University, England. His research interests include international strategy, global enterprise management, SMTEs, and entrepreneurship. He has published widely in peer reviewed academic journals including Entrepreneurship Theory and Practice, Journal of Business Venturing, Journal of International Business Studies, and Strategic Management Journal.

Xufei Ma is as an Associate Professor in Department of Management, Chinese University of Hong Kong. He received his PhD from the National University of Singapore Business School in 2007. Before he joined academia, he worked as an international business manager with the SINOCHEM Corporation for several years. With a focus on China, his research interests include the strategic issues facing foreign multinational enterprises operating in emerging markets and local emerging market firms competing domestically and globally. His research has been published in such journals as Journal of International Business Studies, Academy of Management Journal, Strategic Management Journal, and others. Xufei Ma won the Haynes Prize from the Academy of International Business for the most promising scholar.

Lee Li is Professor of Marketing at the School of Administrative Studies, York University, Canada. He received his doctorate in Marketing from Lancaster University, England. His research interests include internationalization, diversification, marketing strategies, and partnerships. He has published widely in peer-reviewed academic journals, including the Journal of International Business Studies, Strategic Management Journal, and Entrepreneurship Theory and Practice.

Ram Mudambi is Frank M. Speakman Professor of Strategy and Perelman Senior Research Fellow at the Fox School of Business, Temple University. He holds a Master’s degree from the London School of Economics and a PhD from Cornell University.  He is a Fellow of the Academy of International Business (AIB) and Vice-President and Program Chair for the 2015 AIB Conference. He has served as an Associate Editor of the Global Strategy Journal (2010-2013) and is an Area Editor at the Journal of International Business Studies (2013-2016). He serves on the editorial boards of numerous journals. He has been a special issue editor for the Journal of Economic Geography, the Journal of Management Studies, the International Business Review and the Journal of International Management. He has published over 80 peer-reviewed articles, including work in the Journal of Political Economy, the Journal of Economic Geography, the Strategic Management Journal and the Journal of International Business Studies.

Postscript

When we initially proposed the topic, we consulted with Professor Rugman, a pioneer in regionalization. He fully agreed on the importance of this issue. He not only supported our initiative for a special issue but was also willing to serve as a consulting editor. To our sorrow, Professor Rugman passed away unexpectedly. Our efforts to organize this special issue can be regarded as a commemoration of this great scholar in international business.