The purpose of this study is to investigate the following questions: Are supply chains global or regional? What are the performance implications for firms?
This paper classifies 183 large North American firms into home‐region oriented, host‐region oriented, bi‐regional, and global firms by using geographic distributions of their upstream and downstream activities. The performance implications of the regional supply chains of a broader set of 273 firms by using Tobin's Q and data on intra‐regional sales or assets are further evaluated.
It is found that the evidence to support the regional nature of supply chains – that is, over 85 percent of firms in our sample – have their supply chains within North America. The paper also finds that a regional focus of firms in terms of sales contributes to improved performance as measured by Tobin's Q.
The regionalization perspective proposed by Rugman and Verbeke to develop and test the regional nature of supply chains is applied.
