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Regional Dimensions of Liability of Foreignness: Between a Rock and a Hard Place?

  • Wolfgang Sofka

    ()

    (Centre for European Economic Research (ZEW), Mannheim, Germany)

  • Joerg Zimmermann

    (Max Planck Institute of Economics, Jena, Germany)

In this paper we develop optimized localization strategies for multinational firms to overcome their liability of foreignness by adding a regional dimension. We explore conceptually whether economic stress in a region has a mitigating or reinforcing effect. We test this analytical framework empirically on the highly internationalized German car market and find that economically depressed regions are promising stepping stones into foreign markets.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-023.

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Date of creation: 25 Jun 2007
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Handle: RePEc:jrp:jrpwrp:2007-023
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