Academic journal article Management International Review

Opening the 'Non-Manufacturing' Envelope: The Next Big Enterprise for International Business Research

Academic journal article Management International Review

Opening the 'Non-Manufacturing' Envelope: The Next Big Enterprise for International Business Research

Article excerpt

Abstract and Key Results

* This study surveys recent work, published in four International Business journals, that has focused on the non-manufacturing sector which includes the 'services' sector. It documents the nature of scholarship in this area, identifies opportunities for future work, highlights some important challenges of undertaking such work, and suggest a few starting points for a more systematic study of this vital sector of the economy.

* Our findings highlight a largely barren academic landscape vis-a-vis recent academic work pertaining to the non-manufacturing sector in general and services sector per se in particular. Therein lies a monumental opportunity for our discipline as a whole.

Key Words

Non-manufacturing Sector * Service Sector * Service Multinationals * International Business Research

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   For men are prone to go it blind,
   Along the calf-paths of the mind,
   And work away from sun to sun,
   To do what other men have done.
   They follow in the beaten track,
   And out and in, and forth and back,
   And still their devious course pursue,
   To keep the path that others do.

Sam Walter Foss

Academic work is generally known to lag empirical trends. So it is not surprising that, as a community of aspiring scholars, we have trailed a key economic phenomenon: The rising significance of non-manufacturing sector to the world economy. This sector comprises of primary as well as tertiary (or service) sectors, the latter being the center of this focused issue. Between 2000 and 2006, the most recent year for which data were available, the stock of worldwide outward FDI doubled from about USD 6,2 l0 billion to about USD 12,474 billion (in current prices)--much of it fueled by M&As (World Investment Report 2007). In 2000, M&As in the service sector alone accounted for nearly 75 percent of total value of these transactions as measured in current prices in US dollars, roughly USD 1,144 billion. In 2006, although the corresponding statistic fell to 60 percent, the dollar value of M&As in the service sector still was a staggering amount, USD 880 billion. Moreover, the service sector dominated M&A activity in terms of the number of deals: In 2000, almost 63 percent of total M&A deals (approximately 7,900 deals) occurred in the service sector; this statistic remained largely unchanged in 2006 (approximately 7,000 deals). There are other indicators of service sector's economic import. For example, this sector contributed between 40 percent (China) and 81 percent (USA) to the GDP of the ten biggest world economies (Economist 2008); the median value of this contribution was 68.3 percent. Clearly, the service sector plays a substantial role both in the world economy as well as in the domestic economies of leading nations--a role that not only has been mostly neglected in academic scrutiny, but also a role that we believe holds considerable promise for future scholarship.

This study has two objectives: i) to document the nature of and extent to which academic work (published between 2003 and 2007) in International Business (IB) journals has focused on the non-manufacturing sector, either singularly or in conjunction with the manufacturing sector, and ii) to identify opportunities for future work on services, highlight some important challenges of undertaking such work, and suggest a few starting points for a more systematic study of this vital sector. Our guidance is based on patterns revealed in the analysis of work we have surveyed.

Despite the ambitious nature of our endeavor, some caveats are in order. One, we do not focus solely on the service sector, focusing instead on the non-manufacturing sector on which relatively more academic work has been done, as our study demonstrates. Two, due to resource constraints, we did not survey all IB journals--even when they were published in the United States where we are based. …

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