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

Wolfgang Sofka and Jörg Zimmermann ()

Papers on Entrepreneurship, Growth and Public Policy from Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group

Abstract: 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.

Keywords: Liability of foreignness; multinational strategy; automotive market (search for similar items in EconPapers)
Pages: 28 pages
Date: 2007-03
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Working Paper: Regional Dimensions of Liability of Foreignness: Between a Rock and a Hard Place? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:esi:egpdis:2007-12

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