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

Wolfgang Sofka and Joerg Zimmermann
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Joerg Zimmermann: Max Planck Institute of Economics, Jena, Germany

No 2007-023, Jena Economics Research Papers from Friedrich-Schiller-University Jena

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)
JEL-codes: F23 L62 M10 (search for similar items in EconPapers)
Date: 2007-06-25
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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:jrp:jrpwrp:2007-023

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