Does country matter?

Citation

Rugman, A.M. (2012), "Does country matter?", Multinational Business Review, Vol. 20 No. 3. https://doi.org/10.1108/mbr.2012.57220caa.001

Does country matter?

Article Type: Letter from the Editor From: Multinational Business Review, Volume 20, Issue 3

In this issue of The Multinational Business Review, we publish papers examining international business issues at country level. Steven Globerman examines outward FDI from Canada, largely finding it to be complementary to Canadian domestic business investment. Martinez and Kalliny examine international business in Latin American countries, finding more empirical research taking place than previously imagined. Saidani, Amewokunu and Lawson-Body evaluate the performance of MNE subsidiaries in Tunisia, linking this to an assessment of the Arab Spring in North African countries. Kaya and Walker use a large data bank on attitudes of individuals towards the impact of FDI, basically finding that MNEs are viewed as favorable engines of economic growth.

While all of these papers are placed within the core principles of international business research, this editor wonders if we are focused on the key research question, namely, does country matter? I say this because our core theoretical matrix of economic integration and national responsiveness appears to have a redundant axis. Essentially, all of these papers in this issue of MBR (indeed, the vast majority of all papers published in all IB journals) concentrate on the economic integration axis.

Even the paper on subsidiary performance in Tunisia examines the economic efficiency and contribution to host economy growth of the MNE. Indeed, this related literature on MNE spillovers and linkages, leading to the development of host country clusters, is mainly about the benefits of economic integration. The paper by Globerman asks a classic economic question about the costs and benefits of outward FDI, and whether it substitutes for domestic investment and growth (the answer is no). The Kaya and Walker paper places the economic benefits of FDI against the potential for regulatory excess by country governments, flying in the face of multilateral agreements (and bi-regional treaties) offering national treatment and right of establishment for FDI.

Overall, we are finding that international business research is failing to explore in any substantive manner the issue of national responsiveness. Possibly the reason is that the economic integration axis now dominates the national responsiveness one. In these times of international financial crises, country level policy is driven by economic issues and not by national responsiveness. The cultural and regulatory powers of country governments (in restricting FDI and in imposing costs of social responsibility on MNEs) are playing second fiddle to economic growth considerations. Finally, we observe that MNEs actually perform at a regional rather than global, or local, level. Has regionalism signaled the end of national responsiveness?

Alan M. RugmanEditor-in-Chief