Services in International Business Studies: A Replication and Extension of Merchant and Gaur (2008).

Date01 Junio 2020
AuthorBlagoeva, Denitsa Hazarbassanova

1 Introduction

The history of international trade dates back roughly 4000 years to the Arabian nomads trading in spices and silk from the Far East. Since those early days, international business (IB) scholars have mostly focused on the trade of goods. In this paper, we look to the past to develop questions for future IB research on services and service firms. Our research question is two-fold. First, what is the status of research on the internationalisation of services and service firms in the IB domain? Second, what questions for the future emerge from the extant body of knowledge?

Previous research suggests that scholarly knowledge of the internationalisation of service firms and activities does not reflect the economic importance of these firms in the global economy (Capar and Kotabe 2003; Merchant and Gaur 2008; Pla-Barber and Ghauri 2012). In fact, services are increasingly dominating the world economy. According to the World Bank (2019), the value added by services as percentage of global GDP has been growing steadily, reaching 65% in 2017 (the value added by manufacturing for the same year was 15.6%). Employment in services worldwide was 48.8% (55.5% female) in 2018. Global trade in services demonstrated its resilience to the turmoil of the last financial and economic crisis when it exhibited a lower magnitude of decline and a speedier recovery (UNCTAD 2012). The service sector accounts for the larger part of FDI stock in Europe (87% of inward and 62% of outward FDI in 2011) and globally (63% overall in 2012), which suggests that service firms have been the most active in internationalising their operations (UNCTAD 2015). Several factors gave rise to and are sustaining this trend. These include the increased liberalisation of services in developed and developing countries as well as the emergence of information and communications technologies (ICT) that enable firms to scale up the delivery of services across a large number of locations that were previously not viable. The service sector has dominated the international scene for quite some time. Therefore, it is reasonable to expect similar growth in IB expertise in this field.

Business and economics studies have explored the subject from various angles (e.g., Gershuny and Miles 1983; Shelp 1981). Several reviews of our knowledge on service internationalisation have appeared since the beginning of the twenty-first century, all remarking on the crucial role of the sector in the post-industrial era and all lamenting the inadequacy of research on the topic. Contractor et al. (2003) point to the discrepancy between the importance of services relative to manufacturing and the lack of research on the former's internationalisation. Lommelen and Matthyssens (2005) undertake a literature review on the internationalisation process of service providers and arrive at similar conclusions. In a special issue on the internationalisation of services in Management International Review (vol. 48, issue 4), Merchant and Gaur (2008, p. 370) assess the contribution of IB scholars to enhancing knowledge on the non-manufacturing sector and discover "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". In the introduction to a Service Industries Journal special issue (vol. 32, issue 7) on the internationalisation of services, Pla-Barber and Ghauri (2012) also acknowledge the comparative scarcity of research on the internationalisation of service firms. Notably, these studies also identify opportunities. Merchant and Gaur (2008) see possibilities for crosscountry comparative and longitudinal studies, searches for common characteristics and typologies, multi-theoretical perspectives, work towards defining "service" and its unique aspects, and repetition of studies focused on manufacturing firms to assess whether the same designs and theories apply to services. Similarly, Pla-Barber and Ghauri (2012) suggest several areas in which improvements are possible. In summary, despite the increasing amount of research on internationalisation, some fundamental gaps remain.

Our study has two inter-related goals: (1) to take stock of 15 years of scholarly work on non-manufacturing sectors published in selected IB journals, and (2) to highlight and discuss promising areas for additional IB research in this area based on a synthesis of this work. These goals mirror those in Merchant and Gaur's (2008) study, but there are notable differences. First, our study is temporally more comprehensive than Merchant and Gaur's (2008) work. Their study covered a five-year period (2003-2007), while our study includes an additional 10 years of data (2009-2018) for the four original journals, with 15 journal years added for the Journal of International Management. Second, our study ventures deeper into the content of published studies to uncover potentially interesting and scientifically rewarding research themes. Instead of identifying structural gaps, as Merchant and Gaur (2008) did, we identify substantive gaps in the non-manufacturing landscape by focusing on phenomena that require scholarly attention. Thus, our approach contrasts with Merchant and Gaur's (2008) descriptive approach to profiling non-manufacturing studies.

Our findings suggest that the IB interest in services is growing and that significant development has occurred in the last decade in terms of the number of papers, rigor and methodological approaches. Nevertheless, underexplored themes and angles still exist, which we highlight as future research opportunities.

This paper is structured as follows. First, we present our methodology. Thereafter, we undertake a quantitative comparison of two five-year periods (2009-2013 and 2014-2018) with the results from Merchant and Gaur (2008). In the content analysis, we draw attention to a selection of themes underlying the literature on the internationalisation of services, and we identify gaps and understudied areas. On this basis, we offer reflections on past research and directions for future research.

2 Methodology

For the reasons discussed above, we closely followed Merchant and Gaur's (2008) research protocol. In line with Merchant and Gaur (2008), we use the term 'non-manufacturing sector' to refer to primary and tertiary (or service) sectors. As a point of departure, we confine our survey to the same four journals as Merchant and Gaur (2008): the Journal of International Business Studies (JIBS), the Journal of World Business (JWB), Management International Review (MIR) and Thunderbird International Business Review (TIBR). We added the Journal of International Management in order to include another multi-disciplinary journal in the field and extend the study further. Like Merchant and Gaur (2008), we acknowledge that there are several other well-regarded IB journals, but we have chosen to exclude them, as our main objective is to ensure comparability with Merchant and Gaur's (2008) study.

For the above-mentioned journals, we evaluated all studies published from January 1, 2009 to December 31, 2018, and coded them in line with Merchant and Gaur's (2008) approach. We followed the same procedure for the full 15 journal years (2003-2018) for the Journal of International Management. We did not revisit Merchant and Gaur's (2008) original coding, partly because we assume it is correct and partly to avoid 'reinventing the wheel'. To facilitate meaningful comparisons, our analysis covers three five-year horizons: (1) 2003-2007 (i.e., Merchant and Gaur, 2008 data, with the addition of Journal of International Management), (2) 2009-2013 and (3) 2014-2018. We reviewed articles for the entire period, but we left 2008 out of the quantitative study in order to compare Merchant and Gaur's (2008) five-year period to the two subsequent five-year periods (2009-2013 and 2014-2018). We report findings for each of these five-year periods (henceforth, T1, T2 and T3, respectively) as well as the 15-year aggregate.

2.1 Protocols for Taking Stock of Published Non-manufacturing Studies

To address our first goal (i.e., stock-taking), we assigned studies to the categories and subcategories used by Merchant and Gaur (2008). In this regard, we strictly adhered to Merchant and Gaur's (2008) classification protocols:

[W]e only selected theoretical/conceptual and empirical studies that focused on the non-manufacturing sector, either singularly or together with manufacturing sector. Moreover, we included studies whose sample type (manufacturing or not) we could not ascertain initially. For convenience, we labelled our entire selection 'possibly non-manufacturing sector studies'. This selection consisted of studies with either an individual-level, or firm-level, or industry-level focus. Studies that had individuals as the unit of analysis were included only if they met either of following criteria: (i) respondents belonged to firms operating in [the] non-manufacturing sector, or (ii) the phenomenon under investigation was related to non-manufacturing sector. (Merchant and Gaur 2008:381-382). Based on this process, we isolated 1299 possibly non-manufacturing sector studies (551 studies in T2 and 571 in T3). We assigned the remaining studies to the 'manufacturing sector' category. Next, like Merchant and Gaur (2008), we assigned the non-manufacturing sector studies to three non-overlapping subcategories that formed the basis of our analysis: (1) exclusively non-manufacturing studies (i.e., conceptual and empirical studies that focused only on the non-manufacturing sector); (2) mixed-sector studies (i.e., conceptual studies applicable to both industry sectors, and empirical studies with samples that included non-manufacturing and manufacturing samples); and (3) unclear studies (i.e., studies with an ambiguous or unreported sector focus, and studies in which such a focus was inapplicable; e.g...

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