- 05 Jul 2006
- Working Paper
Bringing History into International Business
Executive Summary — International Business scholars often talk about history, but rarely take it seriously. The first generation of International Business scholars placed a high priority on evolutionary and historical perspectives and methodology, but little work these days grapples with the history of International Business or uses historical data to explore an issue. Jones and Khanna discuss new avenues for researching business groups in history and in contemporary emerging markets, resource-based and path-dependent theories of the firm, and foreign direct investment and development over time. Key concepts include:
- Move beyond assertions that "history matters" and explore how it matters.
- Longitudinal analysis is important.
- History can be treated as rigorously as conventional statistical analysis, and should be.
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. There are three conceptual reasons for doing so. First, historical variation is at least as good as 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, history can allow us to move beyond the oft-recognized importance of issues of path-dependence to explore the roots of Penrosian resources. Third, there are certain issues that are un-addressable, 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.