How Do We Capture "Global Specialization" When Measuring Firms' Degree of Internationalization?

    Research output: Working paperResearch

    Abstract

    The IB literature informs us of several ways to measure firms' degree of internationalization. In this paper we make the argument that in fact none of the existing indices really measure firms' degree of "global specialization", that is, to what extent their allocation of resources is multidomestic or global. As argued, all the existing measures may gauge a purely multidomestic firm as having a high degree of internationalization, whereas a truly global firm may be ranked low. In order to remedy this we introduce a complementary index measuring how firms are configuring their value chains - whether they are replicating value chain activities from country to country or locating them in globally specialized units in order to exploit an international division of labor. In addition to mathematical modeling and numerical examples, we examine the relevance of the new index of global specialization on data of Danish MNCs by looking at the correlation between the new global specialization index and existing indices of firms' degree of internationalization. We find that the index is able to identify a distinct group of firms with significantly higher degrees of global value chain configuration. Key words: Internationalization, value chain, global configuration. JEL Codes: F02, F23, L22, L23
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherDjøf Forlag
    Number of pages39
    ISBN (Print)8791815088
    Publication statusPublished - 2005

    Keywords

    • Internationalization
    • Value chain
    • Global configuration

    Cite this

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    title = "How Do We Capture {"}Global Specialization{"} When Measuring Firms' Degree of Internationalization?",
    abstract = "The IB literature informs us of several ways to measure firms' degree of internationalization. In this paper we make the argument that in fact none of the existing indices really measure firms' degree of {"}global specialization{"}, that is, to what extent their allocation of resources is multidomestic or global. As argued, all the existing measures may gauge a purely multidomestic firm as having a high degree of internationalization, whereas a truly global firm may be ranked low. In order to remedy this we introduce a complementary index measuring how firms are configuring their value chains - whether they are replicating value chain activities from country to country or locating them in globally specialized units in order to exploit an international division of labor. In addition to mathematical modeling and numerical examples, we examine the relevance of the new index of global specialization on data of Danish MNCs by looking at the correlation between the new global specialization index and existing indices of firms' degree of internationalization. We find that the index is able to identify a distinct group of firms with significantly higher degrees of global value chain configuration. Key words: Internationalization, value chain, global configuration. JEL Codes: F02, F23, L22, L23",
    keywords = "Virksomhedens internationalisering, Internationalization, Value chain, Global configuration",
    author = "{Geisler Asmussen}, Christian and Torben Pedersen and Bent Petersen",
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    TY - UNPB

    T1 - How Do We Capture "Global Specialization" When Measuring Firms' Degree of Internationalization?

    AU - Geisler Asmussen, Christian

    AU - Pedersen, Torben

    AU - Petersen, Bent

    PY - 2005

    Y1 - 2005

    N2 - The IB literature informs us of several ways to measure firms' degree of internationalization. In this paper we make the argument that in fact none of the existing indices really measure firms' degree of "global specialization", that is, to what extent their allocation of resources is multidomestic or global. As argued, all the existing measures may gauge a purely multidomestic firm as having a high degree of internationalization, whereas a truly global firm may be ranked low. In order to remedy this we introduce a complementary index measuring how firms are configuring their value chains - whether they are replicating value chain activities from country to country or locating them in globally specialized units in order to exploit an international division of labor. In addition to mathematical modeling and numerical examples, we examine the relevance of the new index of global specialization on data of Danish MNCs by looking at the correlation between the new global specialization index and existing indices of firms' degree of internationalization. We find that the index is able to identify a distinct group of firms with significantly higher degrees of global value chain configuration. Key words: Internationalization, value chain, global configuration. JEL Codes: F02, F23, L22, L23

    AB - The IB literature informs us of several ways to measure firms' degree of internationalization. In this paper we make the argument that in fact none of the existing indices really measure firms' degree of "global specialization", that is, to what extent their allocation of resources is multidomestic or global. As argued, all the existing measures may gauge a purely multidomestic firm as having a high degree of internationalization, whereas a truly global firm may be ranked low. In order to remedy this we introduce a complementary index measuring how firms are configuring their value chains - whether they are replicating value chain activities from country to country or locating them in globally specialized units in order to exploit an international division of labor. In addition to mathematical modeling and numerical examples, we examine the relevance of the new index of global specialization on data of Danish MNCs by looking at the correlation between the new global specialization index and existing indices of firms' degree of internationalization. We find that the index is able to identify a distinct group of firms with significantly higher degrees of global value chain configuration. Key words: Internationalization, value chain, global configuration. JEL Codes: F02, F23, L22, L23

    KW - Virksomhedens internationalisering

    KW - Internationalization

    KW - Value chain

    KW - Global configuration

    M3 - Working paper

    SN - 8791815088

    BT - How Do We Capture "Global Specialization" When Measuring Firms' Degree of Internationalization?

    PB - Djøf Forlag

    CY - Frederiksberg

    ER -