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Christian Geisler Asmussen is an assistant professor of strategic management and international business at the Department of Strategic Management and Globalization, Copenhagen Business School. His research revolves around globalization and the international expansion trajectories of multinational corporations (MNCs). Drawing on a background in formal economics but applying a multi-disciplinary approach to his research, he has focused in particular on the interaction between competitive advantage and geographic scope. His work has appeared in the Journal of International Business Studies, Management International Review and International Business Review. He also serves as an ad-hoc reviewer on numerous international journals including the Strategic Management Journal, Strategic Entrepreneurship Journal and Journal of Management Studies, and on the editorial review boards of Management International Review and Multinational Business Review. Christian received his PhD from Copenhagen Business School in 2007. In relation to his dissertation, he has been awarded the Barry M. Richman best dissertation award from the Academy of Management, the Haynes Prize for most promising scholar from the Academy of International Business, as well as several prestigious prizes from the Danish research community. He has been a visiting scholar at Indiana University, University of Victoria, Duke University and Temple University.

This paper aims to develop a more nuanced view of subnational location choice with a particular focus on global cities. It is argued that multinational firms may use global cities to establish bridgeheads-subsidiaries at intermediate levels of the ownership chain that enable further international as well as subnational expansion.

Beyond those host country subsidiaries that are directly owned by a foreign multinational, the authors go deeper and focus specifically on the multi-tiered – “subsidiaries of subsidiaries” to examine how the geographic origins and destinations of these investments are associated with micro-location choices in a host country.

The authors find that there are substantial differences between the types, roles, activities and geographic origins of the firms locating in different areas, and in the ownership structures spanning them. The authors propose that this has managerial and theoretical implications which may be understood based on an organizing framework describing a tradeoff between the pursuit of global connectivity and local density on the one hand and cost control on the other.

Empirical work on foreign location choices should take into account ownership structures and take a more fine-grained view of subnational variation.

Managers need to consider the trade-offs between connectivity, density and costs when making foreign location decisions.

Policy makers should think about the unique contributions that various subnational regions such as global and ordinary cities can make to global value chains.

The authors bridge the hitherto separate literatures pertaining to subsidiary mandates and subnational dimensions of foreign location choice by investigating the fine-grained roles and ownership structures from a supranational as well as subnational perspective.

The first part of Volume 24 contains our annual feature from a leading scholar. Professor Stephen Kobrin was the recipient of the 2010 Booz & Co./strategy+business Eminent Scholar in International Management Award, given by the International Management Division of the Academy of Management, and in his acceptance speech gives us his view on the evolution of the nation state and global governance. This is a particularly salient introduction to this volume as Professor Kobrin's work very neatly addresses the question of what is the role of location when political power is now spanning traditional locational boundaries. Jonathan Doh and Ruth Aguilera provide commentaries that integrate Kobrin's work with that of stakeholder theory and transnational governance.

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

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.

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.

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.

As the chapters in this volume emphasize, the access to local resources in a given host country is not a free-for-all. Although the LOF has traditionally been understood as a phenomenon related to firms' performance in local markets, implicitly evoking a market-seeking motivation for entry, it applies equally well to strategic asset seeking (Dunning, 1993). Hence, foreign firms might suffer from discrimination and uncertainty relative to incumbent firms also in their attempts to get access to local resources such as labor and knowledge. The first chapter in this second section, by Nachum (‘Home-based Advantages and a Hierarchy of Location Resources: Foreign and Local Firms Dependency on Location Resources’), demonstrates these points and estimates a hierarchy of resources that differ in their degree of accessibility to foreign firms and fungibility within internal MNE networks. If the LOF thus inhibits MNEs' attempts to use LSA as a source of local competitiveness, we might assume a relationship of the form LSAM = LSA0(1 − e LOF), where e 0 captures, for lack of a better term, the local ‘resource embeddedness’, i.e. the extent to which local incumbents have an unfair advantage in sourcing LSA. These local firms, in contrast, do not suffer a penalty like the MNEs do and can freely access the local resources, so that LSAL = LSA0.

The Booz & Co./strategy+business Eminent Scholar in International Management is an annual award given by the International Management Division of the Academy of Management and sponsored by Booz & Co./strategy+business.