Regional economic stress as moderator of liability of foreignness

Wolfgang Sofka and Jörg Zimmermann

Journal of International Management, 2008, vol. 14, issue 2, 155-172

Abstract: In this paper we develop optimized localization strategies for multinational firms to overcome their liability of foreignness by adding a regional dimension within a country. 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 intra-national regions under economic stress are more promising markets for foreign car manufacturers as the effects of liability of foreignness are significantly lower there.

Keywords: Liability; of; foreignness; Multinational; strategy; Automotive; market (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (6)

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