The use of multinomial choice analysis in international business research

Many strategic decisions made by firms involve a choice among several discrete alternatives. International Business (IB) scholars are often interested in modelling the factors that potentially influence these (multinomial) choices: these factors might include not only characteristics of the firms making the choices but also attributes of the alternative choices. This paper provides a succinct and intuitive introduction to the possible applications of multinomial choice models in IB research. We briefly outline the theory behind discrete choice modelling, and then explain how multinomial choice models may be estimated (including how the datasets need to be formatted) and how the significance of the coefficient estimates as well as the diagnostic statistics may be tested and interpreted.