The Long‐term Domestic Dominance of the Multinational Enterprise

Aleksey Korniychuk, Marcus Møller Larsen*, Christian G. Asmussen

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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Abstract

Research Summary Managerial Summary Like all companies, multinational enterprises (MNEs) recombine their activities in search of efficient business solutions. While these ideas have been widely acknowledged in the global strategy literature, there is limited understanding of how internationalization affects the outcomes of such boundedly rational search. In this paper, we develop a computational model of search that allows for an essential property of the MNE—distributiveness of performance across multiple geographies—and show that, in a given market, MNEs can outperform more specialized domestic companies long term. More broadly, our work illustrates that adjusting general theories of bounded rationality to the specifics of global strategy can deepen our understanding of value creation across borders.This study shows how MNEs can outperform domestic firms by leveraging their global presence in local markets. While domestic firms have deep local insights, MNEs benefit from their ability to adapt across markets, allowing them to enhance local responsiveness over time without sacrificing global integration. This way, MNEs can better understand local customer needs than domestic competitors. This highlights the value of appointing leaders with international experience for new market entries, as they bring a broader perspective critical to long‐term success. For global managers, these insights emphasize global operations as a pathway to strengthening local competitiveness.
Original languageEnglish
JournalGlobal Strategy Journal
Number of pages19
ISSN2042-5791
DOIs
Publication statusPublished - 17 Mar 2025

Bibliographical note

Epub ahead of print. Published online: 17 March 2025.

Keywords

  • Bounded rationality
  • Complexity
  • Computational model
  • Distributive performance function
  • Global strategy

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