Abstract
PurposeThe purpose of this study is to examine different paths to overcoming the liability of foreignness. Based on the eclectic paradigm, the authors construct a theoretical framework comprising enterprise nature, location choice, entry mode and internationalization strategy.Design/methodology/approachThe paper uses fuzzy-set qualitative comparative analysis (fsQCA) method to test the framework with data covering 120 multinational Chinese subsidiaries in 34 host in 2019.FindingsThe results show that liability of foreignness (LOF) is multiple concurrency, equifinality and asymmetry. When investing in Belt and Road (B&R) countries, non-SEOs can weaken LOF by applying the greenfield mode and resource-seeking strategy, other MNEs can implement a market- or resource-seeking strategy via cross-border M&A to reduce LOF. But when investing in non-B&R countries with a strategic asset-seeking strategy, the LOF is increased. The B&R initiative can reduce the LOF effectively.Originality/valueThe authors construct a general framework to explain the paths of overcoming LOF by bridging the OLI with LOF and introduce fsQCA method into the field of LOF to make up for the shortcoming of existing test method by explaining the influence of more than three factors on LOF.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
