The regional and global competitiveness of multinational firms

International competitiveness ultimately depends upon the linkages between a firm’s unique, idiosyncratic capabilities (firm-specific advantages, FSAs) and its home country assets (country-specific advantages, CSAs). In this paper, we present a modified FSA/CSA matrix building upon the FSA/CSA matrix (Rugman 1981). We relate this to the diamond framework for national competitiveness (Porter 1990), and the double diamond model (Rugman and D’Cruz 1993). We provide empirical evidence to demonstrate the merits and usefulness of the modified FSA/CSA matrix using the Fortune Global 500 firms. We examine the FSAs based on the geographic scope of sales and CSAs that can lead to national, home region, and global competitiveness. Our empirical analysis suggests that the world’s largest 500 firms have increased their firm-level international competitiveness. However, much of this is still being achieved within their home region. In other words, international competitiveness is a regional not a global phenomenon. Our findings have significant implications for research and practice. Future research in international marketing should take into account the multi-faceted nature of FSAs and CSAs across different levels. For MNE managers, our study provides useful insights for strategic marketing planning and implementation.

Changes in the relative importance of sector and regional Factors: 1987-2002

A stylised fact in the real estate portfolio diversification literature is that sector (property-type) effects are relatively more important than regional (geographical) factors in determining property returns. Thus, for those portfolio managers who follow a top-down approach to portfolio management, they should first choose in which sectors to invest and then select the best properties in each market. However, the question arises as to whether the dominance of the sector effects relative to regional effects is constant. If not property fund managers will need to take account of regional effects in developing their portfolio strategy. We find the results show that the sector-specific factors dominate the regional-specific factors for the vast majority of the time. Nonetheless, there are periods when the regional factors are of equal or greater importance than the sector effects. In particular, the sector effects tend to dominate during volatile periods of the real estate cycle; however, during calmer periods the sector and regional effects are of equal importance. These findings suggest that the sector effects are still the most important aspect in the development of an active portfolio strategy.

Regional business networks in the multinational retail sector

This article examines the network relationships of a set of large retail multinational enterprises (MNEs). We analyze under what conditions a flagship-network strategy (characterized by a network of five partners – the MNE, key suppliers, key partners, selected competitors and key organisations in the non-business infrastructure) explains the internationalisation of three retailers whose geographic scope, sectoral conditions and competitive strategies differ substantially. We explore why and when retailers will adopt a flagship strategy. The three firms are two U.K.-based multinational retailers (Tesco and The Body Shop) and a French-based global retailer (Moët Hennessy Louis Vuitton). We find evidence of strong network relationships for all three retailers, although each embraces network strategies for different reasons. Their flagship relationships depend on each retailer's strategic use of firm-specific-advantages (FSAs) and country-specific advantages (CSAs). We find that a flagship strategy can succeed in overcoming internal and/or environmental constraints to cross-border resource transfers, which are barriers to foreign direct investment (FDI). We provide recommendations on why and when to use a flagship-based strategy and which type of network partners to prioritize in order to succeed internationally.

Decadal predictability of regional scale wind speed and wind energy potentials over Central Europe

Decadal predictions on timescales from one year to one decade are gaining importance since this time frame falls within the planning horizon of politics, economy and society. The present study examines the decadal predictability of regional wind speed and wind energy potentials in three generations of the MiKlip (‘Mittelfristige Klimaprognosen’) decadal prediction system. The system is based on the global Max-Planck-Institute Earth System Model (MPI-ESM), and the three generations differ primarily in the ocean initialisation. Ensembles of uninitialised historical and yearly initialised hindcast experiments are used to assess the forecast skill for 10 m wind speeds and wind energy output (Eout) over Central Europe with lead times from one year to one decade. With this aim, a statistical-dynamical downscaling (SDD) approach is used for the regionalisation. Its added value is evaluated by comparison of skill scores for MPI-ESM large-scale wind speeds and SDD-simulated regional wind speeds. All three MPI-ESM ensemble generations show some forecast skill for annual mean wind speed and Eout over Central Europe on yearly and multi-yearly time scales. This forecast skill is mostly limited to the first years after initialisation. Differences between the three ensemble generations are generally small. The regionalisation preserves and sometimes increases the forecast skills of the global runs but results depend on lead time and ensemble generation. Moreover, regionalisation often improves the ensemble spread. Seasonal Eout skills are generally lower than for annual means. Skill scores are lowest during summer and persist longest in autumn. A large-scale westerly weather type with strong pressure gradients over Central Europe is identified as potential source of the skill for wind energy potentials, showing a similar forecast skill and a high correlation with Eout anomalies. These results are promising towards the establishment of a decadal prediction system for wind energy applications over Central Europe.

Detection and attribution of human influence on regional precipitation

Understanding how human influence on climate is affecting precipitation around the world is immensely important for defining mitigation policies, and for adaptation planning. Yet despite increasing evidence for the influence of climate change on global patterns of precipitation, and expectations that significant changes in regional precipitation should have already occurred as a result of human influence on climate, compelling evidence of anthropogenic fingerprints on regional precipitation is obscured by observational and modelling uncertainties and is likely to remain so using current methods for years to come. This is in spite of substantial ongoing improvements in models, new reanalyses and a satellite record that spans over thirty years. If we are to quantify how human-induced climate change is affecting the regional water cycle, we need to consider novel ways of identifying the effects of natural and anthropogenic influences on precipitation that take full advantage of our physical expectations.