A Global Value Chain Analysis of the 'Regional Strategy' Perspective

Journal of Management Studies (Forthcoming)

Fox School of Business Research Paper 16-006

35 Pages Posted: 13 Dec 2015 Last revised: 16 Dec 2016

See all articles by Ram Mudambi

Ram Mudambi

Temple University - Department of Strategic Management

Jonas Puck

Vienna University of Economics and Business

Date Written: December 1, 2015

Abstract

In this counterpoint paper we argue that the findings presented by the ‘regional strategy’ literature do not capture the full array of global activities of the multinational enterprise (MNE). While this literature makes an important contribution to the field by showing that sales and production activities in the MNE are regionally structured, we argue that this assessment is biased for two reasons. First, this approach overly focuses on geographical location of downstream activities, while disregarding that of knowledge creation and other relevant upstream activities in the MNE. Second, the approach associates the firm’s value creation only with its internalized activities and does not capture the value created through any activities that are externalized. Many MNEs rely to a significant extent on value creation outside the legal firm boundaries. We argue that such omissions are likely to lead to biased interpretations using different theoretical lenses, such as the knowledge-/resource-based view, internalization theory and transaction cost economics. Based on our reasoning, we provide recommendations for future research both within and beyond the ‘regional strategy’ literature.

Suggested Citation

Mudambi, Ram and Puck, Jonas, A Global Value Chain Analysis of the 'Regional Strategy' Perspective (December 1, 2015). Journal of Management Studies (Forthcoming), Fox School of Business Research Paper 16-006, Available at SSRN: https://ssrn.com/abstract=2702376

Ram Mudambi (Contact Author)

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-2099 (Phone)
215-204-8029 (Fax)

HOME PAGE: http://sbm.temple.edu/~rmudambi/index.html

Jonas Puck

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
1020

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