The influence of liability of foreignness on market entry strategies Academic Article

abstract

• PurposeThe purpose of this study is to examine how liability of foreignness (LOF) influences multinational enterprises (MNEs) market entry strategy.Design/methodology/approachBuilding on the extant literature, this paper examines the influence of LOF on four MNE market entry strategies (i.e. marketseeking, resourceseeking, competitive advantage and controlorientation) in a sample of 3,085 Sinoforeign joint ventures formed in manufacturing sectors in China.FindingsThe findings indicate that LOF influences market entry strategies selected by MNEs. Specifically, MNEs from low LOF countries adopt resourceseeking strategies and strategies to utilize their competitive advantages in laborintensive industries more than MNEs from high LOF countries, while investors from high LOF countries adopt marketseeking and controloriented strategies to a greater degree than MNEs from low LOF countries.Originality/valueThis study provides new theoretical insights into LOF for academics as well as suggests the need for managers to explicitly incorporate LOF into market entry strategy decisions.

authors

• Griffith, David

published proceedings

• International Marketing Review

author list (cited authors)

• Chen, H., Griffith, D. A., & Hu, M. Y.

citation count

• 48

complete list of authors

• Chen, Haiyang||Griffith, David A||Hu, Michael Y

publication date

• November 2006

publisher

• Emerald  Publisher

published in

• International Marketing Review  Journal

Digital Object Identifier (DOI)

• 10.1108/02651330610712148

start page

• 636

end page

• 649

volume

• 23

issue

• 6

URL

• http://dx.doi.org/10.1108/02651330610712148