Advanced Search
MyIDEAS: Login

Liabilities of Foreignness Revisited: A Review of Contemporary Studies and Recommendations for Future Research

Contents:

Author Info

  • Denk, Nikola
  • Kaufmann, Lutz
  • Roesch, Jan-Frederik
Registered author(s):

    Abstract

    The concept of liabilities of foreignness (LOFs) describes the additional costs that multinational enterprises have to face relative to their indigenous competitors when operating in foreign markets. To date, the special issue of the Journal of International Management (Vol. 8, No. 3) in 2002 contains the only overview of both the state of the literature on this concept and recommendations for further research. A decade later, we examine how the LOFs literature has evolved since this special issue and on that basis provide a critical evaluation of the concept. Specifically, we document the evolution of the field by analyzing drivers and outcomes of LOFs; we also examine how theoretical streams have been applied to the concept, including theories of international expansion, social network theory, institutional theory, and the resource-based view. Comparing the recent literature to what had been recommended as future research avenues in the special issue, we identify areas that either have not been addressed in the meantime (e.g., more theoretical pluralism in interdisciplinary research settings) or have as yet received little attention (e.g., the dynamic perspective of its development and the investigation of LOFs in the context of multinationals from emerging markets). More fundamentally, recent literature in international business also indicates that the concept of LOFs might have been superseded by concepts originating in institutional theory.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S1075425312000543
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

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

    Volume (Year): 18 (2012)
    Issue (Month): 4 ()
    Pages: 322-334

    as in new window
    Handle: RePEc:eee:intman:v:18:y:2012:i:4:p:322-334

    Contact details of provider:
    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description

    Order Information:
    Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/bibliographic
    Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/bibliographic

    Related research

    Keywords: Liabilities of foreignness; Literature review; Future research avenues; Multinational strategy;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Tallman, Stephen & Chacar, Aya S., 2011. "Communities, alliances, networks and knowledge in multinational firms: A micro-analytic framework," Journal of International Management, Elsevier, vol. 17(3), pages 201-210, September.
    2. Christian Geisler Asmussen & Torben Pedersen & Charles Dhanaraj, 2009. "Host-country environment and subsidiary competence: Extending the diamond network model," Journal of International Business Studies, Palgrave Macmillan, vol. 40(1), pages 42-57, January.
    3. Harris, Simon & Wheeler, Colin, 2005. "Entrepreneurs' relationships for internationalization: functions, origins and strategies," International Business Review, Elsevier, vol. 14(2), pages 187-207, April.
    4. Luo, Yadong & Shenkar, Oded & Nyaw, Mee-Kau, 2002. "Mitigating liabilities of foreignness: Defensive versus offensive approaches," Journal of International Management, Elsevier, vol. 8(3), pages 283-300.
    5. Mudambi, Ram & Swift, Tim, 2011. "Leveraging knowledge and competencies across space: The next frontier in international business," Journal of International Management, Elsevier, vol. 17(3), pages 186-189, September.
    6. Mezias, John M., 2002. "How to identify liabilities of foreignness and assess their effects on multinational corporations," Journal of International Management, Elsevier, vol. 8(3), pages 265-282.
    7. Oetzel, Jennifer & Doh, Jonathan P., 2009. "MNEs and development: a review and reconceptualization," Journal of World Business, Elsevier, vol. 44(2), pages 108-120, April.
    8. George Balabanis & Adamantios Diamantopoulos & Rene Dentiste Mueller & T C Melewar, 2001. "The Impact of Nationalism, Patriotism and Internationalism on Consumer Ethnocentric Tendencies," Journal of International Business Studies, Palgrave Macmillan, vol. 32(1), pages 157-175, March.
    9. Seno-Alday, Sandra, 2010. "International business thought: A 50-year footprint," Journal of International Management, Elsevier, vol. 16(1), pages 16-31, March.
    10. Ryan J Orr & W Richard Scott, 2008. "Institutional exceptions on global projects: a process model," Journal of International Business Studies, Palgrave Macmillan, vol. 39(4), pages 562-588, June.
    11. Lin, Wen-Ting & Liu, Yunshi & Cheng, Kuei-Yang, 2011. "The internationalization and performance of a firm: Moderating effect of a firm's behavior," Journal of International Management, Elsevier, vol. 17(1), pages 83-95, March.
    12. Harvey, Michael & Novicevic, Milorad M. & Buckley, M. Ronald & Fung, Helen, 2005. "Reducing inpatriate managers' 'Liability of Foreignness' by addressing stigmatization and stereotype threats," Journal of World Business, Elsevier, vol. 40(3), pages 267-280, August.
    13. Barnard, Helena, 2010. "Overcoming the liability of foreignness without strong firm capabilities -- the value of market-based resources," Journal of International Management, Elsevier, vol. 16(2), pages 165-176, June.
    14. Petersen, Bent & Pedersen, Torben, 2002. "Coping with liability of foreignness: Different learning engagements of entrant firms," Journal of International Management, Elsevier, vol. 8(3), pages 339-350.
    15. Zaheer, Srilata, 2002. "The liability of foreignness, redux: a commentary," Journal of International Management, Elsevier, vol. 8(3), pages 351-358.
    16. Contractor, Farok J. & Kumar, Vikas & Kundu, Sumit K., 2007. "Nature of the relationship between international expansion and performance: The case of emerging market firms," Journal of World Business, Elsevier, vol. 42(4), pages 401-417, December.
    17. R Greg Bell & Igor Filatotchev & Abdul A Rasheed, 2012. "The liability of foreignness in capital markets: Sources and remedies," Journal of International Business Studies, Palgrave Macmillan, vol. 43(2), pages 107-122, February.
    18. Caves, Richard E, 1971. "International Corporations: The Industrial Economics of Foreign Investment," Economica, London School of Economics and Political Science, vol. 38(149), pages 1-27, February.
    19. Sethi, Deepak & Judge, William, 2009. "Reappraising liabilities of foreignness within an integrated perspective of the costs and benefits of doing business abroad," International Business Review, Elsevier, vol. 18(4), pages 404-416, August.
    20. William Newburry & Naomi A Gardberg & Liuba Y Belkin, 2006. "Organizational attractiveness is in the eye of the beholder: the interaction of demographic characteristics with foreignness," Journal of International Business Studies, Palgrave Macmillan, vol. 37(5), pages 666-686, September.
    21. Forsgren, M., 2002. "The concept of learning in the Uppsala internationalization process model: a critical review," International Business Review, Elsevier, vol. 11(3), pages 257-277, June.
    22. Frank L DuBois & David Reeb, 2000. "Ranking the International Business Journals," Journal of International Business Studies, Palgrave Macmillan, vol. 31(4), pages 689-704, December.
    23. John Cantwell & John H Dunning & Sarianna M Lundan, 2010. "An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment," Journal of International Business Studies, Palgrave Macmillan, vol. 41(4), pages 567-586, May.
    24. Miller, Stewart R. & Richards, Malika, 2002. "Liability of foreignness and membership in a regional economic group: Analysis of the European Union," Journal of International Management, Elsevier, vol. 8(3), pages 323-337.
    25. Alan M Rugman & Alain Verbeke, 2004. "A perspective on regional and global strategies of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan, vol. 35(1), pages 3-18, January.
    26. 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.
    27. Bunyaratavej, Kraiwinee & Hahn, Eugene D. & Doh, Jonathan P., 2007. "International offshoring of services: A parity study," Journal of International Management, Elsevier, vol. 13(1), pages 7-21, March.
    28. Jan Johanson & Jan-Erik Vahlne, 2009. "The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership," Journal of International Business Studies, Palgrave Macmillan, vol. 40(9), pages 1411-1431, December.
    29. Calhoun, Mikelle A., 2002. "Unpacking liability of foreignness: identifying culturally driven external and internal sources of liability for the foreign subsidiary," Journal of International Management, Elsevier, vol. 8(3), pages 301-321.
    30. Christian Geisler Asmussen, 2009. "Local, regional, or global? Quantifying MNE geographic scope," Journal of International Business Studies, Palgrave Macmillan, vol. 40(7), pages 1192-1205, September.
    31. Mauri, Alfredo J. & Neiva de Figueiredo, João, 2012. "Strategic Patterns of Internationalization and Performance Variability: Effects of US-Based MNC Cross-Border Dispersion, Integration, and Outsourcing," Journal of International Management, Elsevier, vol. 18(1), pages 38-51.
    32. Jiang, Crystal X. & Yang, Qin & Li, Sali & Wang, Yong, 2011. "The moderating effect of foreign direct investment intensity on local firms' intangible resources investment and performance implications: A case from China," Journal of International Management, Elsevier, vol. 17(4), pages 291-302.
    33. Sofka, Wolfgang & Zimmermann, Jörg, 2008. "Regional economic stress as moderator of liability of foreignness," Journal of International Management, Elsevier, vol. 14(2), pages 155-172, June.
    34. Elango, B. & Sambharya, Rakesh B., 2004. "The influence of industry structure on the entry mode choice of overseas entrants in manufacturing industries," Journal of International Management, Elsevier, vol. 10(1), pages 107-124.
    35. Alvaro Cuervo-Cazurra & Mary M Maloney & Shalini Manrakhan, 2007. "Causes of the difficulties in internationalization," Journal of International Business Studies, Palgrave Macmillan, vol. 38(5), pages 709-725, September.
    36. Sethi, Deepak & Guisinger, Stephen, 2002. "Liability of foreignness to competitive advantage: How multinational enterprises cope with the international business environment," Journal of International Management, Elsevier, vol. 8(3), pages 223-240.
    37. Luo, Yadong & Sun, Jinyun & Wang, Stephanie Lu, 2011. "Comparative strategic management: An emergent field in international management," Journal of International Management, Elsevier, vol. 17(3), pages 190-200, September.
    38. Elango, B., 2009. "Minimizing effects of 'liability of foreignness': Response strategies of foreign firms in the United States," Journal of World Business, Elsevier, vol. 44(1), pages 51-62, January.
    39. Pogrebnyakov, Nicolai & Maitland, Carleen F., 2011. "Institutional distance and the internationalization process: The case of mobile operators," Journal of International Management, Elsevier, vol. 17(1), pages 68-82, March.
    40. Fastoso, Fernando & Whitelock, Jeryl, 2010. "Regionalization vs. globalization in advertising research: Insights from five decades of academic study," Journal of International Management, Elsevier, vol. 16(1), pages 32-42, March.
    41. Garg, Miti & Delios, Andrew, 2007. "Survival of the foreign subsidiaries of TMNCs: The influence of business group affiliation," Journal of International Management, Elsevier, vol. 13(3), pages 278-295, September.
    42. Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
    43. Paul Ellis, 2000. "Social Ties and Foreign Market Entry," Journal of International Business Studies, Palgrave Macmillan, vol. 31(3), pages 443-469, September.
    44. Hennart, Jean-François & Roehl, Thomas & Zeng, Ming, 2002. "Do exits proxy a liability of foreignness?: The case of Japanese exits from the US," Journal of International Management, Elsevier, vol. 8(3), pages 241-264.
    45. Luo, Yadong & Shenkar, Oded, 2011. "Toward a perspective of cultural friction in international business," Journal of International Management, Elsevier, vol. 17(1), pages 1-14, March.
    46. Goodall, Keith & Roberts, John, 2003. "Only connect: teamwork in the multinational," Journal of World Business, Elsevier, vol. 38(2), pages 150-164, May.
    47. Perez-Batres, Luis A. & Eden, Lorraine, 2008. "Is there a liability of localness? How emerging market firms respond to regulatory punctuations," Journal of International Management, Elsevier, vol. 14(3), pages 232-251, September.
    48. 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.
    49. Karam, Charlotte M. & Kwantes, Catherine T., 2011. "Contextualizing Cultural Orientation and Organizational Citizenship Behavior," Journal of International Management, Elsevier, vol. 17(4), pages 303-315.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    2. Fainshmidt, Stav & White, George O. & Cangioni, Carole, 2014. "Legal Distance, Cognitive Distance, and Conflict Resolution in International Business Intellectual Property Disputes," Journal of International Management, Elsevier, vol. 20(2), pages 188-200.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:18:y:2012:i:4:p:322-334. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.