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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’

  • Moeller, Miriam
  • Harvey, Michael
  • Griffith, David
  • Richey, Glenn
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    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.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0969593112000248
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    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 22 (2013)
    Issue (Month): 1 ()
    Pages: 89-99

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    Handle: RePEc:eee:iburev:v:22:y:2013:i:1:p:89-99
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    1. Griffith, David A., 2010. "Understanding multi-level institutional convergence effects on international market segments and global marketing strategy," Journal of World Business, Elsevier, vol. 45(1), pages 59-67, January.
    2. Amine, Lyn Suzanne, 2008. "Country-of-origin, animosity and consumer response: Marketing implications of anti-Americanism and Francophobia," International Business Review, Elsevier, vol. 17(4), pages 402-422, August.
    3. 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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    7. Harvey, Michael & Novicevic, Milorad M., 2002. "The hypercompetitive global marketplace: the importance of intuition and creativity in expatriate managers," Journal of World Business, Elsevier, vol. 37(2), pages 127-138, July.
    8. Meschi, Pierre-Xavier & Riccio, Edson Luiz, 2008. "Country risk, national cultural differences between partners and survival of international joint ventures in Brazil," International Business Review, Elsevier, vol. 17(3), pages 250-266, June.
    9. JosÈ Antonio Ocampo, 2002. "Rethinking the development agenda," Cambridge Journal of Economics, Oxford University Press, vol. 26(3), pages 393-407, May.
    10. Riddle, Liesl & Brinkerhoff, Jennifer, 2011. "Diaspora entrepreneurs as institutional change agents: The case of Thamel.com," International Business Review, Elsevier, vol. 20(6), pages 670-680.
    11. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan, vol. 19(3), pages 411-432, September.
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