Computer Simulation in International Business

The inherent complexity and uncertainty that surrounds the operation and dynamics of international firms have prompted the exploration of alternative research frameworks within international business (IB) scholarship. Concerns regarding the explicit inclusion of firm-related heterogeneity, the influence of interdependencies at various levels of interaction, and the evolving character of firms have led to the consideration of complexity-based perspectives. Complexity situates IB issues within a context where not only actors and their agency influence system behavior, but also the interconnecting structure among them. This shift has epistemological implications, facilitating the adoption of methods beyond traditional statistical ones. Computational modeling offers a powerful tool for investigating complex issues that complement traditional research methodologies in IB. This involves various computer simulation approaches, including dynamical modeling and system dynamics, NK models, agent-based simulation, and techniques that involve artificial intelligence and optimization methods. Each modeling approach has its own advantages and disadvantages in terms of capturing complexity-related features, as well as different requirements regarding skills and data. Consequently, new avenues for generating knowledge arise from the application of computer simulation to advance IB research. These encompass the simulation’s potential for using design-based perspectives to inform decision-making in global operations; exploring bottom-up causality and the emergence of macro-level patterns in international trade; incorporating higher-order interactions in networks of firms, suppliers, and international supply chain processes; developing alternative theories of internationalization through the explicit integration of dynamic processes; emphasizing the importance of firm-environment interactions in relation to global sustainability; and generating different strategic scenarios, leading to the consideration of possible plausible futures in international markets.