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I am delighted to be here today to honor the work of Alan Rugman. Alain Verbeke (Calgary) and I will discuss Alan's contributions, with me focusing primarily on his contributions to the field of international business (IB); Alain, his contributions to international management (IM).

This research volume honours Alan M. Rugman, who is the L. Leslie Waters Chair in International Business (IB), Professor of Management and Professor of Business Economics and Public Policy at the Kelley School of Business, Indiana University. The work contains a set of essays developed to celebrate the Academy of Management's (AoM) recognition of Professor Rugman as the ‘Booz Allen Hamilton Strategy and Business Eminent Scholar in International Management’ at the AoM 2004 Annual Meeting in New Orleans, Louisiana. Booz Allen Hamilton established this award to recognize eminent scholars whose research and writing have contributed significantly to international management scholarship and whose work has had an effect on the practice of international management. This great honour was not the only one Professor Rugman received in 2004. The European International Business Academy (EIBA) organized a special panel honouring Professor Rugman's 25-year old landmark study on international diversification and the multinational enterprise (MNE) at its 2004 Annual Meeting in Ljubljana, Slovenia. The 10 chapters included in this volume were presented at one of these events or written as a direct result thereof.

This chapter complements the one that appeared as “History of the AIB Fellows: 1975–2008” in Volume 14 of this series (International Business Scholarship: AIB Fellows on the First 50 Years and Beyond, Jean J. Boddewyn, Editor). It traces what happened under the deanship of Alan Rugman (2011–2014) who took many initiatives reported here while his death in July 2014 generated trenchant, funny, and loving comments from more than half of the AIB Fellows. The lives and contributions of many other major international business scholars who passed away from 2008 to 2014 are also evoked here: Endel Kolde, Lee Nehrt, Howard Perlmutter, Stefan Robock, John Ryans, Vern Terpstra, and Daniel Van Den Bulcke.

The eclectic paradigm of Dunning (1980) (with its OLI and four motives for FDI framework) can be reconciled with the firm and country matrix of Rugman (1981). However, the fit is not perfect. The main reason for misalignment is that Dunning is focused upon outward FDI into host economies, whereas Rugman’s matrix is for firm‐level strategy covering MNE activity in both home and host countries

In evaluating Alan Rugman's work on MNE environmental strategies, the subject of this chapter, it is too tempting not to start with a 2×2 matrix. Fig. 1 is meant to roughly indicate four different types of work that might characterise an academic's research portfolio. Obviously, all the well-known caveats of such a scheme apply, and perhaps more than usual. However, the main purpose is, by way of introduction, to situate Alan's output on environmental issues and the MNE, compared and related to other topics. While the horizontal axis of Fig. 1 refers to a regular division into theoretical and empirical work, the vertical axis differentiates main foci of research from other, more sideline, areas. Applied to Alan Rugman's research portfolio, the latter category characterises his work on environmental strategies of MNEs best, particularly quadrant 2, although some of it (generally more exploratory work) can be placed in quadrant 4 as well.

I think it would be fair to say that explaining the geography of multinational enterprise (MNE) activity has never been a major part of Alan Rugman's scholarly research and writings. Nevertheless, over the last 25 years, he has provided us with several useful nuggets of understanding and empirical evidence about the territorial expansion of firms, and its impact on their global competitiveness.

A large and robust empirical literature demonstrates that there is a strong relationship between the performance of a multinational enterprise (MNE) and its degree of multinationality. We develop a new metric to capture the return on foreign assets (ROFA), which we use as an alternative metric to return on total assets (ROTA) as a dependent variable representing performance. We find a significant S‐shaped relation between ROFA and the degree of multinationality across a large set of UK firms.

The capital budgeting decision for a multinational enterprise needs to take into account concepts of business policy and competitive strategy. From the modern theory of the multinational enterprise, i.e., the theory of internalisation, it is recognised that proprietary firm specific advantages yield economic rents when exploited on a world‐wide basis. Yet the multinational enterprise finds these potential rents dissipated by internal governance costs of its organisational structure and the difficulty of timing and sustaining its foreign direct investment activities. This paper examines these issues by a focus upon parent‐subsidiary relationships and the strategic nature of the capital budgeting decision for a multinational enterprise.