Regional Heads at the Top: An Unexplored Microfoundational Factor for Inter-regional Growth in Multinational Enterprises
Type
conference contribution
Date Issued
2026
Author(s)
Abstract
Most of the world’s multinational enterprises (MNEs) concentrate their economic activities mainly in their home regional area – the so-called regionalization phenomenon. This phenomenon has been regarded as a cause of inter-regional economic fragmentation, and an impediment to global integration in an era of high geopolitical uncertainty. This has led scholars to stress the need for examining the factors that enable MNEs to move away from their regionalization tendencies and realize growth across regions. We inform this area of research via a microfoundational lens. Integrating the Microfoundational View of International Business (MVIB) with the Penrosean Theory of Growth, we argue that a largely neglected yet important microfoundational factor associated with structural capability and administrative efficiency – i.e., the presence of regional heads in the MNE’s top management team (TMT) – enables the MNE’s top managers to economize on the bounded rationality and bounded reliability challenges of operating across regions, and thus boosts growth in these regions. We also postulate that this effect varies with the attributes of the CEO and the characteristics of the region. We test our framework using data from the global automotive industry between 2008 and 2018. Theoretical contributions, practical implications and future research directions are discussed.
Language
English (United States)
HSG Classification
contribution to scientific community
Refereed
Yes
Event Title
Academy of International Business Annual Meeting 2026
Event Location
Manchester, UK
Event Date
June 29-July 3
Subject(s)
Division(s)