TY - JOUR
T1 - Disaggregating Multinationality
T2 - An Empirical Examination of Aggregation, Adaptation, and Arbitrage Activities by U.S. Multinational Corporations
AU - Berry, Heather
AU - Kaul, Aseem
N1 - Publisher Copyright:
Copyright: © 2022 INFORMS
PY - 2022/6/1
Y1 - 2022/6/1
N2 - Using Ghemawat's AAA framework, we distinguish between different types of activities-aggregation, adaptation, and arbitrage-that firms can pursue when operating abroad and empirically examine the distribution and combinations of these activities by U.S. multinationals. Taking a question-based approach, we develop empirical measures of these activities and then examine their prevalence, their correlates, their association with firm performance, and differences across industries in the population of U.S. multinational corporations (MNCs) from 1989 to 2014. Though only a small proportion of U.S. MNCs actively pursue aggregation, adaptation, and arbitrage together, our results show that this combination is most strongly associated with firm performance, especially in industries with high technological intensity. Overall, our study highlights the need to take the heterogeneity of activities MNCs pursue into account when examining multinationality while also providing one of the first large-scale quantitative examinations of the different combinations of Ghemawat's three approaches to global value creation.
AB - Using Ghemawat's AAA framework, we distinguish between different types of activities-aggregation, adaptation, and arbitrage-that firms can pursue when operating abroad and empirically examine the distribution and combinations of these activities by U.S. multinationals. Taking a question-based approach, we develop empirical measures of these activities and then examine their prevalence, their correlates, their association with firm performance, and differences across industries in the population of U.S. multinational corporations (MNCs) from 1989 to 2014. Though only a small proportion of U.S. MNCs actively pursue aggregation, adaptation, and arbitrage together, our results show that this combination is most strongly associated with firm performance, especially in industries with high technological intensity. Overall, our study highlights the need to take the heterogeneity of activities MNCs pursue into account when examining multinationality while also providing one of the first large-scale quantitative examinations of the different combinations of Ghemawat's three approaches to global value creation.
KW - adaptation
KW - aggregation
KW - arbitrage
KW - global strategy
KW - multinational corporations
KW - question-based approach
UR - http://www.scopus.com/inward/record.url?scp=85134317263&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85134317263&partnerID=8YFLogxK
U2 - 10.1287/stsc.2022.0158
DO - 10.1287/stsc.2022.0158
M3 - Article
AN - SCOPUS:85134317263
SN - 2333-2050
VL - 7
SP - 90
EP - 105
JO - Strategy Science
JF - Strategy Science
IS - 2
ER -