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Causal mechanisms of COVID-19 disruptive effects on liability of foreignness and the emergence of new firm-specific advantages

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  • Sato, Akiko
  • Panibratov, Andrei

Abstract

There is the need for comprehensive research on the disruptive effects of COVID-19 on international business (IB) in preparation for future disruption. However, we know little about the causal mechanisms of the phenomenon which impacted IB. Based on a case study of a Japanese automotive firm in Russia, we investigate how firms tackle institutional entrepreneurship with firm-specific advantages to overcome the disruptive effects. Consequently, the pandemic increased institutional costs due to greater uncertainty in Russian regulatory institutions. To manage this, the firm developed new firm-specific advantages to deal with the increasing uncertainty of regulative institutions. The firm united with other firms to motivate public officials to advocate for semi-official debates. Our study contributes to extending intersecting studies on the liability of foreignness and firm-specific advantages through the lens of institutional entrepreneurship. We propose a holistic conceptual process model of the causal mechanisms and a novel construct for new firm-specific advantages.

Suggested Citation

  • Sato, Akiko & Panibratov, Andrei, 2023. "Causal mechanisms of COVID-19 disruptive effects on liability of foreignness and the emergence of new firm-specific advantages," International Business Review, Elsevier, vol. 32(4).
    • Handle: RePEc:eee:iburev:v:32:y:2023:i:4:s0969593123000422
    DOI: 10.1016/j.ibusrev.2023.102142
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