International Connectedness and Local Disconnectedness: MNE Strategy, City-regions and Disruption

Mark Lorenzen, Ram Mudambi*, Andreas Schotter

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Much of the rising international connectedness of city-regions has developed from MNEs replacing local connections with (superior) international ones. This often creates local disconnectedness that energizes the current populist backlash against MNE activities. We develop approaches to new IB theory, addressing the interdependencies of MNEs and city-regions that we propose as a crucial avenue for future research. We contrast two generic MNE strategies. The first is the traditional one: the ‘global orchestration’ of resources and markets. We argue that it exacerbates local disconnectedness. The second, that we call ‘local spawning,’ involves engaging with the local entrepreneurial eco-system to create and renew local connectedness, diffusing populist responses. Some MNEs are better able to implement a local spawning strategy, due to industry factors like innovation clock-speed, and firm characteristics like organizational path dependency. Finally, we distinguish between disconnection, which is an outcome of MNE strategy, and global disruptions, like the coronavirus (COVID-19) pandemic, which are primarily stochastic events. Addressing disconnections requires MNEs to re-orient their strategies while dealing with disruptions requires undertaking risk mitigation. We present empirical evidence from city-regions around the world to illustrate our theory.

Original languageEnglish
JournalJournal of International Business Studies
Number of pages24
ISSN0047-2506
DOIs
Publication statusPublished - 24 Jun 2020

Bibliographical note

Epub ahead of print. Published online: 24. June 2020

Keywords

  • City-regions
  • Disruption
  • Global cities
  • Global value chains
  • Knowledge transfer
  • MNE geography
  • MNE strategy
  • Off shoring

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