Impact of multilevel boundaries on internationalization: an exposition of region of origin effect

Purpose In this paper, the authors aim to introduce the notion of region of origin effect and articulate why home region boundaries should be factored in when understanding firm strategy and outcomes. Design/methodology/approach The paper validates the region of origin effect on internationalization using a sample of 11,677 firms from 99 developing countries in a multilevel model, with both frequentist and Bayesian approaches. Findings The findings of this paper indicate consistent support for the notion of region of origin effect. The relative importance of direct region effects in explaining variation in firm internationalization was found to be 17.8 per cent. When indirect effects (i.e. varying slopes) were factored in, the relative importance was 16.6 per cent. Additionally, the findings show that the region of origin effect impacts the degree of strength of the well-established firm drivers of internationalization. Originality/value Although the importance of the home region location is well known to researchers and practitioners of international business, it has not received the attention it deserves. The findings of this paper clearly demonstrate the need for researchers and practitioners to recognize the role of the region of origin effect in formulating and implementing global strategies.