The Failure of the International Business Discipline to Revitalize the Understanding of the Multinational Enterprise: The Example of the Global Factory Approach

Our paper investigates the problem of borrowing conceptual ideas in International Business (IB) Studies. We are interested in why proper blending and innovative theory-building have been challenging, despite numerous calls from leading scholars to “integrate insights from multiple perspectives” to revitalize the field and better equip it for addressing grand challenges. Our analysis examines the exemplary case of how the “global value chain” (GVC) concept has informed theorizing and conceptual developments regarding the “global factory” (GF) in IB. For this endeavor, we develop a quality assessment test for qualitatively evaluating theory borrowing based on former work on theory borrowing in Organization and Management Studies. Our analysis revealed that importing the GVC concept into IB under the GF label involved highly selective borrowing without substantial blending. We discuss the problems and opportunities missed by such a myopic approach, which not only affects the future relevance of IB as a sub-discipline, as critical scholars claim. It also hinders genuine engagement with alternative theories, like the one to which this edited volume is dedicated. We conclude that the transnational social space (TSS) idea holds even more potential for novel theory-building in IB, as discussed in the GVC concept, to go beyond the narrow understanding of the multinational enterprise (MNE) as a ‘“transaction cost efficiency machine.”