The Dynamic of Assets and Liabilities of Foreignness

Wan, Feng (2018) The Dynamic of Assets and Liabilities of Foreignness. In: Academy of Management Proceedings. UNSPECIFIED.

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Researchers have recognized that foreign firms possess both advantages and costs in operating in host countries. The extant literature suggests that the liability of foreignness can be gradually overcome as a foreign subsidiary learns more about the host country environment and develops better connections to local business networks. Based on a longitudinal case study of the Chinese management software industry, however, we find that even over the long term foreign firms continue to face difficulties in accessing some important potential country-specific advantages to overcome liability of foreignness. We develop a framework to explain why and how local firms more successfully access country-specific advantages at home because of their local complementary knowledge, local relationships, and home-focused strategies and understand the dynamic of assets and liability of foreignness. These findings have important implications for the persistence of liability of foreignness and for established MNEs wishing to compete in emerging markets as well as helping to explain the emergence of strong competition from local firms in emerging economies.

Item Type: Book Section
Faculty \ School: Faculty of Social Sciences > Norwich Business School
UEA Research Groups: Faculty of Social Sciences > Research Groups > Strategy and Entrepreneurship
Depositing User: LivePure Connector
Date Deposited: 26 Sep 2019 11:30
Last Modified: 26 May 2022 13:30
DOI: 10.5465/AMBPP.2018.11423abstract

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