Multinationality of UK firms – a longitudinal study based on sales and subsidiaries data
ISSN: 1525-383X
Article publication date: 15 October 2020
Issue publication date: 30 April 2021
Abstract
Purpose
This paper aims to contribute to the regionalisation–globalisation debate in international business (IB) by providing a longitudinal analysis of firm-level multinationality. The analysis uses a unique hand-collected data set of both accounting (sales) and non-accounting (subsidiaries) data. The percentage of foreign sales is also used as an additional measure of multinationality.
Design/methodology/approach
This paper categorises constituent firms of the Financial Times Stock Exchange 350 index over an 18-year time period from 1998 to 2015. Firms are categorised using the multinationality classification system developed by Aggarwal et al. (2011). The paper also conducts an industrial analysis across ten industries.
Findings
The evidence shows increasing multinationality over time that suggests a “trans-regional” operational strategy rather than a global or regional one. The results also show that UK firms are more multinational based on subsidiaries than sales. This contradicts the traditional stages theory of internationalisation where firms first expand sales, then subsidiaries. While some support for triad regions is found, there is also evidence of firm-level operations expanding beyond the triad regions of North America, Asia and Europe to non-triad regions such as Africa, Oceania and South America. The industrial analysis shows that non-service firms are more multinational than service firms.
Originality/value
To the best of the authors’ knowledge, this is the first paper to provide an in-depth longitudinal analysis of the geographical dispersion using both sales and subsidiaries data for UK firms. This paper provides a unique perspective on the regionalisation–globalisation debate in IB and presents evidence contrary to traditional stages theories of firm-level internationalisation.
Keywords
Acknowledgements
The authors are grateful to the anonymous reviewer and Editor in Chief, Chang Hoon Oh, for their invaluable guidance and insightful suggestions and comments, which have improved significantly the quality of this article.
Citation
Chadha, P. and Berrill, J. (2021), "Multinationality of UK firms – a longitudinal study based on sales and subsidiaries data", Multinational Business Review, Vol. 29 No. 2, pp. 281-299. https://doi.org/10.1108/MBR-03-2020-0065
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited