Journal of International Business Studies

, Volume 34, Issue 2, pp 138–152 | Cite as

Semiglobalization and international business strategy

  • Pankaj GhemawatEmail author


If markets were either completely isolated by or integrated across borders, there would be little room for international business strategy to have content distinctive from ‘mainstream’ strategy. But a review of the economic evidence about the international integration of markets indicates that we fall in between these extremes, into a state of incomplete cross-border integration that I refer to as semiglobalization. More specifically, most measures of market integration have scaled new heights in the last few decades, but still fall far short of economic theory's ideal of perfect integration. The diagnosis of semiglobalization does more than just supply a relatively stable frame of reference for thinking about the environment of cross-border operations. It also calls attention to the critical role of location-specificity in the prospects of distinctive content for international business strategy relative to mainstream business and corporate strategy. In addition, it flags factors/products subject to location-specificity as being salient from the perspective of international business. Finally, it highlights the scope for strategies that strive to capitalize on the (large) residual barriers to cross-border integration, as well as those that simply try to cope with them.


semiglobalization globalization market integrations market inperfections location/location-specificity firm strategy 



This paper has benefited from research assistance by Jamie Matthews and Raluca Lupu, helpful comments by David Collis, Beulah D'Souza, Vijay Govindarajan, Mauro Guillen, Tarun Khanna, Walter Kuemmerle, Christos Pitelis, Ravi Ramamurti, Louis T. Wells Jr., George S. Yip and, especially, Bernard Y. Yeung, as well as from presentation of material at the AIB Panel Session, in summer 2002, celebrating Buckley and Casson (1976). The Division of Research at the Harvard Business School provided financial support.


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Copyright information

© Academy of International Business 2003

Authors and Affiliations

  1. 1.Harvard Business SchoolBostonUSA

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