Coping with liability of foreignness: Different learning engagements of entrant firms

By Bent Petersen, Torben Pedersen. 2002

220 citations recorded by the source corpus.

Much has been written about how international firms create and sustain firm-specific advantages that offset their liability of foreignness. Less attention has been devoted to the question of how international firms reduce their liability of foreignness. It is the contention of this study that as a consequence of managerial discretion, such as willingness to undertake local adaptation, international firms familiarize with foreign markets at different paces. The data from a sample of 494 international firms from Sweden, Denmark, and New Zealand suggest that entrant firms' learning engagement, i.e., the effort and ability to learn how to conduct business in a foreign environment, varies considerably. In particular, adoption of standardized international business routines and unwillingness to adapt products and marketing practices to local markets seem to be associated with a low learning engagement. The data also indicate that a large proportion of the entrant firms has been engaged in preentry learning.

Subfields: Accounting, Organizational Behavior and Human Resource Management, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/3451fcaff1bcc772f9a2617c96b7873db38ad9a8

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Organizational Behavior and Human Resource Management

In Strategy and Management

Citations in the corpus

The Location Choice of Foreign Direct Investments: Empirical Evidence and Methodological Challenges (2017, background): “It has been argued that learning plays an important role in enabling multinational firms to overcome the LOF in the foreign markets where they operate (Petersen & Pedersen, 2002; Zaheer & Mosakowski, 1999).”
Organizational attractiveness is in the eye of the beholder: the interaction of demographic characteristics with foreignness (2006, unknown): “Learning about and adapting to local environments can also assist in overcoming LOF (Petersen and Pedersen, 2002).”
Foreignness and exit over the life cycle of firms (2012, background): “Petersen and Pedersen (2002) showed that those foreign firms that invest in learning about the host country tend to report higher perceived familiarity with foreign markets than those Journal of International Business Studies that do not, and which tend to stick to standardized international…”
Entrepreneurial orientation and market orientation as drivers of product innovation success: A study of exporters from a developing economy (2013, background): “Yet, small businesses operating from developing economies have to manage multiple export market challenges, including difficulties in developing and maintaining market-based resources and capitalizing on successful new products for long-term success (Alpkan et al., 2007; Nachum, 2003; Petersen and P”
Emerging Markets as Learning Laboratories: Learning Behaviors of Local Firms and Foreign Entrants in Different Institutional Contexts (2005, background): “Given their resource-poor conditions, local firms must learn continuously and quickly in order to survive in their new competitive environments (Bartlett & Ghoshal, 2000; Dawar & Frost, 1999; Manikutty, 2000; Prahalad & Lieberthal, 1998).”
MNE institutional advantage: How subunits shape, transpose and evade host country institutions (2014, result): “…responses (Innovation, Arbitrage, Circumvention and Adaptation), which is in sharp contrast to prior research that emphasizes defensive strategies and how MNEs counter or adapt to host country institutions (e.g., Gooderham et al., 1998; Rosenzweig & Singh, 1991; Petersen & Pedersen, 2002).”