Do regions matter? An integrated institutional and semiglobalization perspective on the internationalization of MNEs

Traditional research suggests a relationship between country-level institutions and the location choices of MNEs. However, more recent theory suggests MNEs also focus on regions (semiglobalization). Therefore, this study examines institutional effects in the context of semiglobalization by consideri...

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Bibliographic Details
Published in:Strategic management journal 2013-08, Vol.34 (8), p.910-934
Main Authors: ARREGLE, JEAN-LUC, MILLER, TOYAH L., HITT, MICHAEL A., BEAMISH, PAUL W.
Format: Article
Language:English
Subjects:
Business structures
Capital investments
Commercial regulation
Corporate strategies
Countries
Decision analysis
Democracy
Economic regulation
Economic strategies
Financial investments
Geographic regions
Globalization
institutional environment
International business
Internationalization
Investment analysis
Japan
Location analysis
location of foreign subsidiaries
Manycountries
Multinational corporations
Multinational enterprises
regional strategy
semi-globalization
Strategic management
Studies
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Summary:Traditional research suggests a relationship between country-level institutions and the location choices of MNEs. However, more recent theory suggests MNEs also focus on regions (semiglobalization). Therefore, this study examines institutional effects in the context of semiglobalization by considering the influences of three formal institutions (i.e., regulatory control, political democracy, capital investments) of countries and geographic regions on MNEs' location choices of internationalization. We use a sample of Japanese MNEs operating in 45 countries within eight regions. The results show that their degree of internationalization into a country is influenced by both country and regional institutional environments. Additionally, a semiglobalization perspective provides better explanatory power than does the country-level perspective. These results present a new perspective on how MNEs consider institutional environments in their international strategy.
ISSN:0143-2095
1097-0266
DOI:10.1002/smj.2051