The Pulse of Liability of Foreignness: Dynamic Legitimacy and Experience Effects in the German Car Market
AbstractCultural and social borders can be stumbling blocks to internationalization (frequent errors, delays). We investigate the persistent roots of liability of foreignness and identify two major factors conceptually: a lack of host country legitimacy (demand side) and a lack of responsiveness on the side of the multinational corporation. Empirical testing for the German car market reveals an interaction between the two factors. For less experienced customer groups, we find that legitimacy is the dominant factor behind the effects of liability of foreignness. As customer experience increases, liability of foreignness caused by a lack of responsiveness becomes more of an issue.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 2007-01.
Length: 26 pages
Date of creation: Jun 2007
Date of revision:
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liability of foreignness; internationalization strategy; globalization;
Other versions of this item:
- Kaiser, Ulrich & Sofka, Wolfgang, 2006. "The pulse of liability of foreignness: dynamic legitimacy and experiences effects in the German car market," ZEW Discussion Papers 06-70, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment
- M10 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
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