The Model of Expansion from Local Enterprises to Multinational Enterprises
Multinational enterprises (MNEs) are playing more and more important roles in the development of world economic. A relative small set of multinational enterprises account for most of the world’s trade and investment (Rugman and Verbeke, 2004). Indeed, the largest 500 MNEs account for over 90% of the world’s stock of foreign direct investment (FDI) and they, themselves, conduct about half the world’s trade( Rugman, 2000).The empirical evidence, however, shows that MNEs are more regional than national versus global. “Data on the activities of the 500 largest MNEs reveal that very few are successful globally. For 320 of the 380 firms for which geographic sales data are available, an average of 80.3% of total sales are their home region of the triad, this means that many of the world’s largest firms are not global but regionally based, in terms of a balanced geographic distribution of sales across the triad.” (Rugman and Verbeke, 2004). Therefore, it is very significant to study where the regional impact is on multinational management. In this paper, I will discuss the model of expansion from local enterprises to multinational enterprises and how the regional factors affect enterprises operations.