Does Being Perceived as Global Pay Off? An Analysis of Leading Foreign and Domestic Multinational Corporations in India, Japan, and the United States

Abstract

As global players, multinational product and corporate brands are known to have an advantage over local competitors. Although foreign multinational corporations (MNCs) increasingly compete against domestic MNCs, particularly in economically strong countries, little is known about (1) whether foreign MNCs can use their globalness to their advantage and (2) how the perceptions of foreign versus domestic MNCs drive consumer behavior. To examine this issue, the authors propose a framework based on accessibility-diagnosticity theory and test it using consumer data from countries in which leading foreign and domestic MNCs compete. The results show that perceived brand globalness enhances consumers’ intentional loyalty toward MNCs indirectly by affecting the functional and psychological value these MNCs offer. The value-creation routes change according to firms’ origins—that is, foreign MNCs translate globalness through functional and psychological value, while domestic MNCs translate globalness through psychological value. However, the benefits of being global and the value-creation routes for foreign (vs. domestic) MNCs differ between countries. Finally, high consumer ethnocentrism weakens—but does not completely erase—the effects of perceived brand globalness in all countries and interacts with MNCs’ origins.