Exploring the Liability of Origin: Lessons from Smithfield Foods and Meat Processing in the US During COVID-19

Abstract

The Liability of Origin (LOR) refers to disadvantages faced abroad by firms sharing common national origins. We examine the country of origin effect on Smithfield Foods (owned by a Chinese parent), one of the largest meat companies in the US, before and during the COVID-19 outbreak. We find evidence that Smithfield experienced legitimacy challenges associated with its Chinese ownership. We conclude that animosity between a multinational enterprise’s home and host countries is an important source of LOR and discuss three strategies (distancing and localization, stakeholder, and social media) that might help companies overcome these challenges.