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A new perspective on the regional and global strategies of multinational services firms

Author

Listed:
  • Alan M. Rugman

    (Indiana University)

  • Alain Verbeke

    (University of Calgary
    Erasmus University Rotterdam
    Vrije Universiteit Brussel)

Abstract

Abstract and Key Results We explore the differences in international strategy between multinational enterprises (MNEs) in services and manufacturing, especially in terms of their international diversification, as measured by their sales and asset dispersion. Our longitudinal data show that the largest MNEs in services have a much stronger home-region orientation than manufacturing MNEs. Large MNEs in the services sector average 83.9 percent of their sales in their home region, which is significantly higher than large manufacturing firms at 65.6 percent. We explore the possible reasons for the relative lack of globalization of services firms. The two main reasons are: the difficulty of adapting separately upstream activities and downstream activities in high distance host environments, and the difficulty of selecting activity locations as a function of supply side criteria. We offer a refinement of regional strategy theory applicable to services MNEs.

Suggested Citation

  • Alan M. Rugman & Alain Verbeke, 2008. "A new perspective on the regional and global strategies of multinational services firms," Management International Review, Springer, vol. 48(4), pages 397-411, April.
    • Handle: RePEc:spr:manint:v:48:y:2008:i:4:d:10.1007_s11575-008-0023-y
    DOI: 10.1007/s11575-008-0023-y
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    References listed on IDEAS

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    1. Alan M. Rugman & Alain Verbeke, 2005. "A Perspective on Regional and Global Strategies of Multinational Enterprises," Chapters, in: Analysis of Multinational Strategic Management, chapter 8, pages 104-119, Edward Elgar Publishing.
    2. Cloninger, Peggy A., 2004. "The effect of service intangibility on revenue from foreign markets," Journal of International Management, Elsevier, vol. 10(1), pages 125-146.
    3. Farok J Contractor & Sumit K Kundu & Chin-Chun Hsu, 2003. "A three-stage theory of international expansion: the link between multinationality and performance in the service sector," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(1), pages 5-18, January.
    4. Alan M Rugman & Alain Verbeke, 2007. "Liabilities of regional foreignness and the use of firm-level versus country-level data: a response to Dunning et al. (2007)," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(1), pages 200-205, January.
    5. Alan Rugman, 1987. "Multinationals and trade in services: A transaction cost approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 123(4), pages 651-667, December.
    6. Rugman,Alan M., 2005. "The Regional Multinationals," Cambridge Books, Cambridge University Press, number 9780521842655.
    7. J J Boddewyn & Marsha Baldwin Halbrich & A C Perry, 1986. "Service Multinationals: Conceptualization, Measurement and Theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(3), pages 41-57, September.
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