The impact of country-of-origin on the acceptance of foreign subsidiaries in host countries: An examination of the 'liability-of-foreignness'

Miriam Moeller, Michael Harvey*, David Griffith, R. Glenn Richey

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

55 Citations (Scopus)

Abstract

This paper examines the relationship between an organization's country-of-origin and the acceptance into a host country environment by constituents such as vendors, suppliers, and distributors. This study contributes to the literature by proposing the examination and ultimate measurement of various tangible and intangible sources of the 'liabilities of foreignness'. Additionally we show that are these sources are internal and external moderators of perceived acceptance in the host country. Manager must recognize the country-of-origin strategic options to address the negative overshadowing of the liability-of foreignness. We conclude that not doing so can create a stigma that may be attached to the overall organization, its image, products, brands, and to its employees. Further, negative attribution may be caste upon all the identifying characteristics of the foreign entity. The management of the firm must note the potential resistance to accept the organization and its products/services and must develop a proactive set of strategies to address the negativism of the host country constituents.

Original languageEnglish
Pages (from-to)89-99
Number of pages11
JournalInternational Business Review
Volume22
Issue number1
DOIs
Publication statusPublished - Feb 2013

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