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This article introduces a new concept of international spatial distribution to study the international diversification behaviors of multinational corporations (MNCs). Drawing upon spatial research, this new approach measures and analyzes the geographic diversification patterns of MNCs based on two important spatial dimensions: distance and concentration. By leveraging a sample of the largest U.S. MNCs, we propose a new typology of MNCs based on their international spatial distribution. As a complement of existing approaches to the research on international diversification strategies, we suggest that our concept sheds new light on the location behaviors of MNCs..
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Introduction
Location is an important dimension of international business (IB) (Beugelsdijk et al., 2010; Cantwell, 2009; Dunning, 2009). To operationalize "location," scholars have adopted a variety of methods to delineate international diversification patterns of multinational corporations (MNCs). The conventional approaches usually begin by measuring the degree of internationalization (DOI) based on the scale and/ or scope of MNCs' international operations outside the home countries. This DOI approach has certain merits, as it highlights the importance of economic, political, and cultural variations at a national level, as well as the implications of those national differences to the internationalization of firms (Goerzen & Beamish, 2003; Hitt et al., 2006; UNCTAD, 1995). The literature on the geographic diversification of MNCs has extended this analysis by focusing on other geographical units, such as global regions (Arregle et al., 2009; Flores et al., 2013; Qian et al., 2010; Rugman & Verbeke, 2004) and subnational regions (Chan et al., 2010; Ma et al., 2013).
However, some important features in MNCs' global operations seem missing in conventional approaches in IB to describe MNCs' international diversification. Beugelsdijk et al. (2010) and Dunning (2009) have called for innovative approaches to identify previously underexplored dimensions of international diversification. The purpose of this article, therefore, is to introduce a new, more salient methodology to explore the patterns in which firms diversify internationally on a spatial basis, with the goal of aiding practitioners to better understand the geographic distribution of firms globally. We begin this article by showing the global operations of four American MNCs charted on maps based on the locations of their foreign direct investment (FDI) (Figure 1).1 In Table 1, we show the DOI...