A Global Value Chain Analysis of the ‘Regional Strategy’ Perspective

18 Pages Posted: 4 Aug 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: September 2016

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 firm’s legal 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 more general transaction cost economics. Based on our reasoning, we provide recommendations for future research both within and beyond the ‘regional strategy’ literature.

Keywords: internationalization, global value chains, multinational enterprises, offshoring, outsourcing, regional strategy

Suggested Citation

Mudambi, Ram and Puck, Jonas, A Global Value Chain Analysis of the ‘Regional Strategy’ Perspective (September 2016). Journal of Management Studies, Vol. 53, Issue 6, pp. 1076-1093, 2016, Available at SSRN: https://ssrn.com/abstract=2818065 or http://dx.doi.org/10.1111/joms.12189

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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