Abstract
In this paper, we revisit the industry-level drivers of global product integration, i.e., cross-border product flows within multinationals. While traditional explanations for these flows have focused on benefits from R&D intensity and scale at the parent level, we examine a more comprehensive set of factors, incorporating recent theoretical advances as well as the changing nature of global competition, and considering both the level and direction of integration. Using comprehensive data from the Bureau of Economic Analysis (BEA) over the 1999–2019 period, we argue and show that while factors that increase the returns to aggregation or decrease the returns to adaptation tend to raise the overall level of global product integration, factors that increase the returns to arbitrage have a directional impact, raising flows from foreign affiliates. Finally, we make available in this paper our industry-level data on intra-firm product integration, which we call the Global Product Integration Index (GPII), thus offering a valuable resource for future research.
Original language | English (US) |
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Pages (from-to) | 252-269 |
Number of pages | 18 |
Journal | Journal of International Business Studies |
Volume | 55 |
Issue number | 2 |
DOIs | |
State | Published - Mar 2024 |
Externally published | Yes |
Bibliographical note
Publisher Copyright:© Academy of International Business 2023.
Keywords
- digitization
- foreign competition
- foreign rivals
- global knowledge
- global product integration
- intra-firm trade
- multinationals
- offshore outsourcing
- scale
- technology