Coping with liability of foreignness: Different learning engagements of entrant firms
Much has been written about how international firms create and sustain firm-specific advantages that offset their liability of foreignness. Less attention has been devoted to the question of how international firms reduce their liability of foreignness. It is the contention of this study that as a consequence of managerial discretion, such as willingness to undertake local adaptation, international firms familiarize with foreign markets at different paces. The data from a sample of 494 international firms from Sweden, Denmark, and New Zealand suggest that entrant firms' learning engagement, i.e., the effort and ability to learn how to conduct business in a foreign environment, varies considerably. In particular, adoption of standardized international business routines and unwillingness to adapt products and marketing practices to local markets seem to be associated with a low learning engagement. The data also indicate that a large proportion of the entrant firms has been engaged in preentry learning.
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Volume (Year): 8 (2002)
Issue (Month): 3 ()
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- Kent Eriksson & Jan Johanson & Anders Majkgård & D Deo Sharma, 1997. "Experimental Knowledge and Costs in the Internationalization Process," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(2), pages 337-360, June.
- Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
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