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Exploiting the liability of foreignness: Why do service firms exploit foreign affiliate networks at home?

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  • Boehe, Dirk Michael

Abstract

Drawing on both a resource-based view of the firm and an in-depth case study, we develop a novel conceptual model that explains under what conditions a service firm may use its international affiliate network to build a differentiation-based competitive advantage in its domestic market. The bank we studied implemented a differentiation strategy by positioning itself as a "South American Bank" and by offering a set of foreign trade services to its domestic clients that were unique at the time of their introduction. Our conceptual model fills a gap in the literature on difficulties in internationalization by explaining under what conditions internationalizing firms may opt for a strategy that seeks to domestically exploit resources and capabilities that have been developed in the course of internationalization.

Suggested Citation

  • Boehe, Dirk Michael, 2011. "Exploiting the liability of foreignness: Why do service firms exploit foreign affiliate networks at home?," Journal of International Management, Elsevier, vol. 17(1), pages 15-29, March.
    • Handle: RePEc:eee:intman:v:17:y:2011:i:1:p:15-29
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