Home Region Focus and Technical Efficiency of Multinational Enterprises: The Moderating Role of Regional Integration

Management International Review, Forthcoming

Posted: 26 Jun 2011 Last revised: 3 Dec 2012

See all articles by Elitsa R. Banalieva

Elitsa R. Banalieva

Northeastern University; Northeastern University - International Business & Strategy

Michael D. Santoro

Lehigh University - Department of Management

Ruihua Joy Jiang

Oakland University

Date Written: June 26, 2011

Abstract

The transaction costs economics (TCE) perspective on regionalization suggests that multinational enterprises (MNEs) would experience advantages from regionalization and, hence, greater technical efficiency from a high home region focus (HRF). We extend this TCE perspective by proposing that whether a regional (i.e., higher HRF) or global (i.e., lower HRF) strategy leads to greater technical efficiency depends on the degree of regional integration (i.e., economic and policy) of the MNEs’ home regions.

This is the first study in the regional/global strategies literature to analyze the effects of HRF and regional integration (economic and policy) on firms’ technical efficiency performance. We suggest that advantages from regionalization arise when firms align their HRF strategy with the degree of regional integration; disadvantages from regionalization can arise when the two are misaligned.

Our empirical analysis on a sample of 645 manufacturing Triad MNEs during 2000-2006 provides overall support for our conceptual framework.

Suggested Citation

Banalieva, Elitsa R. and Santoro, Michael D. and Jiang, Ruihua Joy, Home Region Focus and Technical Efficiency of Multinational Enterprises: The Moderating Role of Regional Integration (June 26, 2011). Management International Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1872765

Elitsa R. Banalieva (Contact Author)

Northeastern University ( email )

360 Huntington Ave
315 C Hayden Hall
Boston, MA 02115
United States

Northeastern University - International Business & Strategy ( email )

Boston, MA 02115
United States

Michael D. Santoro

Lehigh University - Department of Management ( email )

Bethlehem, PA 18015
United States

Ruihua Joy Jiang

Oakland University ( email )

Rochester, MI 48309-4401
United States

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