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The dynamics of regional and global expansion

Christian Geisler Asmussen (Department of Strategic Management and Globalization, Copenhagen Business School, Copenhagen, Denmark)
Bo Bernhard Nielsen (University of Sydney Business School, University of Sydney, Sydney, Australia AND Department of Strategic Management and Globalization, Copenhagen Business School, Copenhagen, Denmark)
Tom Osegowitsch (Department of Management and Marketing, University of Melbourne, Parkville, Australia)
Andre Sammartino (Department of Management and Marketing, University of Melbourne, Parkville, Australia)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 16 November 2015

Abstract

Purpose

The purpose of this paper is to model and test the dynamics of home-regional and global penetration by multi-national enterprises (MNEs).

Design/methodology/approach

Drawing on international business (IB) theory, the authors model MNEs adjusting their home-regional and global market presence over time. The authors test the resulting hypotheses using sales data from a sample of 220 of the world’s largest MNEs over the period 1995-2005. The authors focus specifically on the relationship between levels of market penetration inside and outside the home region and rates of change in each domain.

Findings

The authors demonstrate that MNEs do penetrate both home-regional and global markets, often simultaneously, and that penetration levels often oscillate within an MNE over time. The authors show firms’ rates of regional and global expansion to be affected by their existing regional and global penetration, as well as their interplay. Finally, the authors identify differences in the steady states at which firms stabilize their penetration levels in the home-regional and the global space. The findings broadly confirm the MNE as an interdependent portfolio with important regional demarcations.

Originality/value

The authors identify complex interdependencies between home-regional and global penetration and growth, paving the way for further studies of the impact of regions on MNE expansion.

Keywords

Citation

Asmussen, C.G., Nielsen, B.B., Osegowitsch, T. and Sammartino, A. (2015), "The dynamics of regional and global expansion", Multinational Business Review, Vol. 23 No. 4, pp. 306-327. https://doi.org/10.1108/MBR-05-2015-0019

Publisher

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Emerald Group Publishing Limited

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