One of the puzzles of international business research is that the key actor, the multinational enterprise (MNE), appears to have a very unevenly distributed geographic dispersion of sales. The MNE is usually a regionalized rather than a globalized business. Three definitions matter:

1. (i) multinational enterprise: a firm with operations across national borders

2. (ii) global business: a firm with major operations (at least 20% of its total sales) in each of the three regions of the “broad triad” of the European Union (EU), North America, and Asia-Pacific, but without one dominating region;

3. (iii) regional business: a firm with the majority of its sales inside one of the triad regions, usually the home region.

The following empirical observations have also been made:

1. (i) the world's 500 largest MNEs account for over 90% of the world's stock of foreign direct investment (FDI) and over half of world trade, usually in the form of intra-firm sales (Rugman, 2000);

2. (ii) of these 500 MNEs, only nine are “global”;

3. (iii) the vast majority of the 500 MNEs (320 of the 380 for which data are available) are home-region based and derive an average of 80% of their sales intra-regionally.

These stylized facts suggest a new research agenda for the international business field, as requested by Buckley (2002). In this chapter, we explore some aspects of this. The observed regionalization can be given a simple transaction cost economics (TCE) explanation.