Title: Regional theories of the MNE: post the 2008 economic crisis

Authors: Colin Dale

Addresses: Henley Business School, University of Reading, Shinfield Road, Reading, RG6 6UR, UK

Abstract: One model of the internationalisation strategies of large MNEs is 'regional theory', which predicts the international diversification of MNEs as movement into proximate markets and low geographical spread. 'Regional theory' suggests that the majority of firms - both MNEs and smaller, local firms - limit their diversifications to their home regions. This paper proposes instead that there are two different models evidenced. The data demonstrate the Yule-Simpson Paradox, a statistical anomaly when two different patterns cross-cancel and will suggest a third, incorrect outcome. There are also important intra-firm variations inside large MNEs that are not addressed by the original research. To test these hypotheses, we re-examine 'regional theory' after the 2008 crisis. The global automotive industry is used as a case study and shown to exhibit these multi-layered effects in its operation. The apparent conclusion is the 2008 crisis was a shock, but it has not prevented ongoing economic globalisation.

Keywords: economic globalisation; firm-specific advantages; FSAs; internalisation theory; international diversification; automotive MNEs; multinationals; multinational enterprises; regional theory; financial crisis; 2008 crisis; automobile industry; internationalisation strategies.

DOI: 10.1504/IJEBR.2014.064674

International Journal of Economics and Business Research, 2014 Vol.8 No.3, pp.354 - 375

Received: 09 Aug 2013
Accepted: 15 Nov 2013
Published online: 13 Sep 2014 *

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