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Bringing history (back) into international business

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Abstract

We argue that the field of international business should evolve its rhetoric from the relatively uncontroversial idea that ‘history matters’ to exploring how it matters. We discuss four conceptual channels through which history matters, illustrating each with a major example. First, historical variation is at least a worthy complement to contemporary cross-sectional variation in illuminating conceptual issues. As an example, we show that conclusions reached by the literature on contemporary emerging market business groups are remarkably similar to independently reached conclusions about a very similar organizational form that was ubiquitous in the age of empire. Second, historical evidence avoids spurious labeling of some phenomena as ‘new’, and by so doing may challenge current explanations of their determinants. Whereas some firm types today were also present earlier, some types have disappeared, some have appeared, and some have disappeared and reappeared later. Third, history can allow us to move beyond the oft-recognized importance of issues of path dependence to explore the roots of Penrosian resources. We argue that the choices made by Jardine's and Swire's in Asia today, for example, are an outgrowth of strategic choices first in evidence more than a century ago. These would remain obscured absent an historical analysis. Fourth, there are certain issues that are unaddressable, except in the really long (that is, historical) run. Exploring the causal relationship (if any) between foreign direct investment, a staple of the international business literature, and long-run economic development provides one important example. Throughout, we advocate embracing rigorous methods for analyzing small-sample and qualitative data when conventional regression techniques do not apply. That is, we suggest that re-embracing history in the mainstream is not tantamount to sacrificing methodological rigor.

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Notes

  1. Key events that were coded were: diversification, divestiture, domestic acquisition, domestic capital raising, executive change, geographic expansion, international capital raising, joint venture (domestic), organizational structure change, origin, ownership change, regulatory closing, regulatory opening, joint venture (international), vertical integration.

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Acknowledgements

We thank Mark Casson, Jeffrey Fear, Giovanni Gavetti, Jean-Francois Hennart, Bruce Kogut, Peter Murmann, Mira Wilkins and Bernard Yeung for helpful conversations. The editor and three anonymous referees provided constructive feedback. The HBS Division of Research provided financial support. The usual disclaimer applies.

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    Geoffrey Jones & Tarun Khanna

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Correspondence to Tarun Khanna.

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Accepted by Arie Y. Lewin, Editor-in-Chief, 4 October 2005. This paper has been with the author for two revisions.

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Jones, G., Khanna, T. Bringing history (back) into international business. J Int Bus Stud 37, 453–468 (2006). https://doi.org/10.1057/palgrave.jibs.8400198

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