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Regional economic stress as moderator of liability of foreignness

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  • Sofka, Wolfgang
  • Zimmermann, Jörg

Abstract

In this paper we develop optimized localization strategies for multinational firms to overcome their liability of foreignness by adding a regional dimension within a country. We explore conceptually whether economic stress in a region has a mitigating or reinforcing effect. We test this analytical framework empirically on the highly internationalized German car market and find that intra-national regions under economic stress are more promising markets for foreign car manufacturers as the effects of liability of foreignness are significantly lower there.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Management.

Volume (Year): 14 (2008)
Issue (Month): 2 (June)
Pages: 155-172

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Handle: RePEc:eee:intman:v:14:y:2008:i:2:p:155-172

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Related research

Keywords: Liability of foreignness Multinational strategy Automotive market;

References

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Citations

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Cited by:
  1. Schmidt, Tobias & Sofka, Wolfgang, 2009. "Liability of foreignness as a barrier to knowledge spillovers: Lost in translation?," Journal of International Management, Elsevier, vol. 15(4), pages 460-474, December.
  2. Denk, Nikola & Kaufmann, Lutz & Roesch, Jan-Frederik, 2012. "Liabilities of Foreignness Revisited: A Review of Contemporary Studies and Recommendations for Future Research," Journal of International Management, Elsevier, vol. 18(4), pages 322-334.

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