Historical research approaches to the analysis of internationalisation.

VerfasserBuckley, Peter J.

Abstract Historical research methods and approaches can improve understanding of the most appropriate techniques to confront data and test theories in internationalisation research. A critical analysis of all "texts" (sources), time series analyses, comparative methods across time periods and space, counterfactual analysis and the examination of outliers are shown to have the potential to improve research practices. Examples and applications are shown in these key areas of research with special reference to internationalisation processes. Examination of these methods allows us to see internationalisation processes as a sequenced set of decisions in time and space, path dependent to some extent but subject to managerial discretion. Internationalisation process research can benefit from the use of historical research methods in analysis of sources, production of time-lines, using comparative evidence across time and space and in the examination of feasible alternative choices.

Keywords Historical research methods * Internationalisation ? Process research * Business history

1 Introduction

The title of this focused issue is 'About Time: Putting Process Back into Firm Internationalisation Research'. It would therefore seem obvious that historical research methods, whose primary concern is the role of time, would be at the forefront of the analysis. This is not necessarily the case, as these methods are neglected in internationalisation research, and in international business more generally. Historians face many of the same research problems that business researchers do--notably questions related to the analysis of process--but they have produced different answers, particularly in relation to the nature of causation. As a field, international business researchers need to question our research approaches more deeply.

This paper seeks to examine the types of research approaches from history that might aid in a more rounded analysis of internationalisation. Issues of sequencing, path dependence, contingent choices and the evaluation of alternatives are all critical in the internationalisation process and are grist to the mill of historical research. An examination of historical research methods leads to a new approach to the concept of internationalisation itself.

1.1 Historical Research Approaches: The Challenge of Different Underlying Philosophies

It is the difference in underlying philosophy between history and social science that presents the keenest challenge in integrating the temporal dimension with international business research. The contrast between the philosophy underlying history and that of social science--an issue for over a century (e.g., Simiand 1903)--is put by Isaiah Berlin:

History details the differences among events, whereas the sciences focus on similarities. History lacks the sciences' ideal models, whose usefulness varies inversely with the number of characteristics to which they apply. As an external observer the scientist willingly distorts the individual to make it an instance of the general, but the historian, himself an actor, renounces interest in the general in order to understand the past through the projection of his own experience upon it. It is the scientist's business to fit the facts to the theory, the historian's responsibility to place his confidence in facts over theories (Berlin 1960, p. 1 (Abstract). (1)

Gaddis (2002) suggests that a particular contrast between history and social science is that history insists on the interdependence of variables, whilst mainstream social science methods rely on identifying the 'independent variable' which affects (causes) changes in dependent variables (Gaddis 2002, particularly Chapter 4). He suggests that this parallels the distinction between a reductionist view and an ecological approach (2002, p. 54), and that this arises from the social scientists' desire to forecast the future (2002, p. 56). This also implies continuity over time--the independent variable persists in its causative effect(s). It is also connected with assumptions of rationality, which also is assumed to be time-invariant. Social scientists would counter that historians are theory resistant, at least to the kind of independent variable/rationalist/context-invariant reductionist theory that (perhaps stereotypically) characterises economistic approaches.

Compromises are possible. Recognising sensitive dependence on initial conditions brings 'narrative' and 'analysis' much closer together, as does dividing time into manageable units--perhaps 'short-term and long term' or 'immediate, intermediate and distant' (Gaddis 2002, p. 95). Causality, interdependence, contingency and moderating variables are more manageable when the time-frame is defined. Research in history therefore demonstrates the importance of time, sequencing and process. It also highlights the role of individuals and their decision making. These elements are particularly important in examining entrepreneurship and individual (manager's) decisions and their outcome in contexts such as the internationalisation of the firm. (2)

How, then, would we recognise if genuinely historical work had been accomplished in internationalisation studies (or indeed in any area of the social sciences)? Tilley (1983, p. 79) gives us an answer:

By 'genuinely historical', I mean studies assuming that the time and place in which a structure or process appears makes a difference to its character, that the sequence in which similar events occur has a substantial impact on their outcomes, and that the existing record of past structures and processes is problematic, requiring systematic investigation in its own right instead of lending itself immediately to social-scientific synthesis. History matters--the importance of historical effects in international business--is illustrated by Chitu et al. (2013), who document a 'history effect' in which the pattern of foreign bond holdings of US investors seven decades ago continues to influence holdings today. Holdings 70 years ago explain 10-15 % of the cross-country variation in current holdings, reflecting the fixed costs of market entry and exit together with endogenous learning. They note that fixed costs need not be large to have persistent effects on the geography of bilateral asset holdings--they need only to be different across countries. Evidence was also found of a 'history effect' in trade not unlike that in finance. The history effect is twice as large for non-dollar bonds as a result of larger sunk costs for US financial investments other than the dollar. Legacy effects loom large in international finance and trade.

It is argued in this paper that time and place (context) do make a difference to the structure and process of an individual firm's internationalisation, that past structures and processes do influence outcomes and that proper acknowledgement of context is vital in understanding and theorising internationalisation. It is further argued that attention to these issues leads to a new conception of internationalisation.

2 Research Methods

Reflecting on the purpose of his methods in his book Bloodlands, on Eastern Europe in the period 1933-45, the historian Timothy Snyder (2010, p. xviii) states that:

... its three fundamental methods are simple: insistence that no past event is beyond historical understanding or beyond the reach of historical enquiry; reflection upon the possibility of alternative choices and acceptance of the irreducible reality of choice in human affairs; and chronological attention to all of the Stalinist and Nazi policies that labelled large numbers of civilians and prisoners of war. This paper follows similar principles. These are: (1) that the methods of history are appropriate to the study of the internationalisation of firms; (2) that choices and alternatives at given points of time are central to this process; (3) that the role of sequencing and time are central; and (4) that the comparative method is an aid to comprehension of the process of internationalisation.

This paper now examines research methods widely used in history (3) that have the capability to improve international business research. These are: (1) source criticism (here it is argued that international business researchers are insufficiently aware of deficiencies in "texts"); (2) the analysis of sequences, including time series analyses and process theorising; (3) comparative methods (not exclusive to historical research); and (4) counterfactual analyses (which are currently less utilised than in previous periods of international business theorising). This followed by a proposed research agenda based on the two key methods of examining change over time and utilising comparative analysis.

2.1 Source Criticism

The use of sources is as prevalent in international business as in history but they are often accepted uncritically. Gottschalk (1950), noting that few source documents are completely reliable, suggests that, 'for each particular of a document the process of establishing credibility should be separately undertaken regardless of the general credibility of the author'. Given that reliability cannot be assumed, source criticism, as Kipping et al. (2014) argue, is fundamental to any historical research.

The trustworthiness of an author may establish a basic level of credibility for each statement, but each element must be separately evaluated. This requires questioning the provenance of the text and its internal reliability (Kipping et al. 2014)--including, importantly, attention to language translation issues if relevant. This leads to the important checks brought about by triangulating the evidence. Triangulation requires the use of at least two independent sources (Kipping et al. 2014). This principle is utilised in international business journals by the requirement that both elements of a dyadic relationship are needed to cross check each other. Examples include...

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