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The impact of country-of-origin on the acceptance of foreign subsidiaries in host countries: An examination of the ‘liability-of-foreignness’

Author

Listed:
  • Moeller, Miriam
  • Harvey, Michael
  • Griffith, David
  • Richey, Glenn

Abstract

This paper examines the relationship between an organization's country-of-origin and the acceptance into a host country environment by constituents such as vendors, suppliers, and distributors. This study contributes to the literature by proposing the examination and ultimate measurement of various tangible and intangible sources of the ‘liabilities of foreignness’. Additionally we show that are these sources are internal and external moderators of perceived acceptance in the host country. Manager must recognize the country-of-origin strategic options to address the negative overshadowing of the liability-of foreignness. We conclude that not doing so can create a stigma that may be attached to the overall organization, its image, products, brands, and to its employees. Further, negative attribution may be caste upon all the identifying characteristics of the foreign entity. The management of the firm must note the potential resistance to accept the organization and its products/services and must develop a proactive set of strategies to address the negativism of the host country constituents.

Suggested Citation

  • Moeller, Miriam & Harvey, Michael & Griffith, David & Richey, Glenn, 2013. "The impact of country-of-origin on the acceptance of foreign subsidiaries in host countries: An examination of the ‘liability-of-foreignness’," International Business Review, Elsevier, vol. 22(1), pages 89-99.
  • Handle: RePEc:eee:iburev:v:22:y:2013:i:1:p:89-99
    DOI: 10.1016/j.ibusrev.2012.02.006
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    References listed on IDEAS

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    11. 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.
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    Cited by:

    1. repec:eee:jbrese:v:84:y:2018:i:c:p:46-58 is not listed on IDEAS
    2. Rozkwitalska Małgorzata & Magier-Łakomy Ewa, 2015. "Does Country of Origin Matter whilst Evaluating Candidates for Managerial Positions?," Journal of Intercultural Management, De Gruyter Open, vol. 7(2), pages 75-88, June.
    3. Mallon, Mark R. & Fainshmidt, Stav, 2017. "Assets of Foreignness: A Theoretical Integration and Agenda for Future Research," Journal of International Management, Elsevier, vol. 23(1), pages 43-55.
    4. repec:kap:jbuset:v:142:y:2017:i:4:d:10.1007_s10551-015-2897-5 is not listed on IDEAS
    5. repec:eee:iburev:v:26:y:2017:i:6:p:1157-1167 is not listed on IDEAS
    6. Magier-Łakomy Ewa & Rozkwitalska Małgorzata, 2013. "Country-of-origin effect on manager’s competence evaluations," Journal of Intercultural Management, De Gruyter Open, vol. 5(4), pages 5-21, December.
    7. Rao-Nicholson, Rekha & Khan, Zaheer & Stokes, Peter, 2016. "Making great minds think alike: Emerging market multinational firms’ leadership effects on targets’ employee psychological safety after cross-border mergers and acquisitions," International Business Review, Elsevier, vol. 25(1), pages 103-113.
    8. repec:spr:manint:v:53:y:2013:i:6:d:10.1007_s11575-013-0180-5 is not listed on IDEAS
    9. Maruyama, Masayoshi & Wu, Lihui, 2015. "Overcoming the Liability of Foreignness in International Retailing: A Consumer Perspective," Journal of International Management, Elsevier, vol. 21(3), pages 200-210.

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