Reviving the Liability of Foreignness: Liability of Foreignness Research in the Semi-Globalized Era

Abstract

The liability of foreignness is that foreign multinationals pay higher costs of doing business abroad than to domestic firms due to their lack of social embeddedness and lack of institutional knowledge; this has been one of the most important research topics in international business and has drawn a great deal of scholarly attention because of its theoretical and practical implications for multinational enterprises operating in foreign host markets. Even though the liability of foreignness has been one of the most fundamental theoretical pillars in international business, it is also true that, more recently, the liability of foreignness has been theoretically and empirically challenged for three main reasons: (1) the theoretical construction of the liability of foreignness is too broad and thus not clear, (2) less attention has been paid to strategies to effectively overcome the liability of foreignness, and (3) the liability of foreignness is neither applicable nor valid any more in a more globalized era. Thus, in this symposium, we aim to address these challenges while further validating the existence of the liability of foreignness. Furthermore, we also attempt to suggest an interesting future research agenda about the liability of foreignness. In particular, the four papers included in the symposium by renowned scholars in the field would provide an interesting intellectual and theory-driven conversation on the topic, and thus help to suggest a meaningful future research direction for studying the liability of foreignness. Pricing Institutional Distance: Evidence from Project Finance in Different Institutional Environment Presenter: Sinziana Dorobantu; New York U. Presenter: Jakob Müllner; WU Vienna U. of Economics and Business Presenter: Robert Salomon; NYU Stern Liability of Offshoring: Experience in Overcoming the Disadvantages of Offshore Manufacturing Presenter: Yunok Cho; Southern Methodist U. Presenter: Jaeyong Song; Seoul National U. Home Bias and Venue Choice for Patent Litigation Presenter: Byung Uk (Charlie) An; Washington U. in St. Louis, Olin Business School Presenter: Minyuan Zhao; Washington U. in St. Louis, Olin Business School The Costs of the Liability of Foreignness: Evidence from Foreign Firm Lobbying in the U.S. Presenter: Jordan Siegel; U. of Michigan, Ross School of Business Presenter: Jin Hyung Kim; George Washington U.