Liability Of Outsidership Research Articles

See who I know! Addressing the liabilities of outsidership through status signaling

Status is an important intangible asset, yet when firms enter new countries, they lack standing in new social hierarchies as outsiders. Conventional wisdom suggests embeddedness in host-country networks can alleviate newcomers’ liability of outsidership. We complement this with insights from status signaling theory: Newcomers in host countries can address their liability of outsidership through the visual display of social affiliations. We utilize a novel visual qualitative research approach that analyzes annual report photographs of an emerging-market family business, depicting the firm’s leaders with high-status alters. Complementing the international business literature, which emphasizes strong ties to host-country business partners, we identify three signaling mechanisms that are more circuitous: bypass (host-country affiliations beyond the firm’s industry), allusion (global affiliations beyond the host country and industry, often celebrities), and aspiration (global industry affiliations). We also suggest that such diffuse status signaling mechanisms may be especially salient in emerging-market family firms investing in developed markets, which are accorded low status in many developed markets. These firms feature firm/owner identity overlaps, long leader tenures, and a tendency to build reputation through prosocial behavior, facilitating the activation of status signaling tactics through ephemeral affiliations with high-status actors situated in world society.

Emerging market multinationals’ liability of outsidership

This study investigated how the liability of outsidership affects emerging-market multinationals. We argue that besides lack of access to local networks, lack of access to leadership positions in global value chain networks is another possible source of the liability of outsidership, and it affects emerging market firms more than multinationals from developed countries. Accordingly, multinationals from emerging markets are more likely than those from developed countries to exit from a foreign market in which they had invested. Allying with technology partners and developed-country non-technology partners could help EMNEs overcome the LOO. Those findings are based on a study of mobile money services provided by multinationals from both emerging markets and developed countries during the period 2001–2022.

Liability of ecosystem integration and internationalisation of digital firms

The widespread emergence of digital firms has important implications for international business theory. In this paper, we argue that because of systematic cross-industry differences in the local ecosystems digital firms need to develop in foreign markets, they will face differential costs and challenges of what we term liability of ecosystem integration (LoEI). The nature of the LoEI differs from both traditional concepts of the liability of foreignness (LoF) and the liability of outsidership (LoO). Rather than reflecting the need to overcome economic or psychic distance by learning about the host country (as with LoF) or investing in relationship-specific knowledge (as with LoO), overcoming LoEI requires investments in catalysing the co-development of a local ecosystem involving users, complementors and institutional actors specific to each business. We show how the level of LoEI a firm faces depends on the characteristics of its industry and its business model along three dimensions: the level of integration with local users, complementors, and institutions. These characteristics impact both firm's success in internationalisation and the level of concentration in the global market.

Inverted legitimacy: Institutional theory in the Age of Multinational Platforms

We examine the novel challenges of establishing and maintaining legitimacy in the burgeoning context of multinational platforms (MNPs). Prior organizational legitimacy research has studied conventional multinational enterprises (MNEs) that seek regulative, normative, and cognitive legitimacy for their subsidiaries in diverse foreign markets. MNPs, however, internationalize by orchestrating networks of independent complementors, rather than hierarchically controlled foreign subsidiaries. This exposes MNPs to novel legitimacy challenges and diverges in several ways from the premises and predictions of extant theorizing on MNE legitimacy. In particular, we argue that for MNP legitimacy, the liability of outsidership is more important than the liability of foreignness, and establishing regulatory legitimacy is more challenging than normative and cognitive legitimacy. We further explore how ecosystem characteristics and MNP governance choices shape the establishment and maintenance of MNP legitimacy.

Transforming the liability of outsidership into assets of outsidership: a comparative study of Japanese automotive subsidiaries in Russia

ABSTRACTThis study investigates the mechanisms that transform the liability of outsidership into assets of outsidership. Debates on transforming the liability of foreignness into assets of foreignness have been emerging, but transforming the liability of outsidership into assets of outsidership remains unclear. Drawing on organizational learning perspectives, we provide a comparative study of Japanese automotive subsidiaries in Russia. We suggest that advanced economy multinational enterprises in emerging markets benefit from local networks with a local partner but not from non-experience-based firm-specific advantages. Our study contributes to current debates in the literature by presenting the novel concept of ‘assets of outsidership’ and discussing the mechanisms of this transformation.

Overcoming the liability of outsidership: An fsQCA analysis of African transnational entrepreneurs in the UK

The purpose of this study is to investigate the set of conditions required for Transnational Entrepreneurs (TEs) to overcome the liability of outsidership in a host country. Using a fuzzy-set qualitative comparative analysis (fsQCA) approach, our results offer fresh perspectives on the configurations of antecedents required to overcome the liability of outsidership. The configurations are equifinally linked to overcoming the liability of outsidership and gaining insidership into mainstream networks in a host country. The findings stress the importance of TEs’ co-ethnic embeddedness in networks as a key construct in overcoming liability of outsidership (LO) and the need for TEs to engage with the mainstream networks in the host country.

Where business networks and institutions meet: Internationalization decision-making under uncertainty

Both business networks and institutional forces are relevant to firm internationalization but they have seldom been studied together. We investigate under what circumstances firms are more likely to adopt non-predictive strategy in light of the influence of the business networks, the institutional forces, and the home market background affecting their internationalization. Based on survey data from 758 small and medium-sized enterprises (SMEs) from Brazil, China, Poland, Italy, and Sweden, our results support the effects of formal institutional distance and cultural differences on the use of non-predictive strategies by SMEs in internationalization decisions, as well as the contingency effects of business network stability and of having an emerging market background. We integrate research on the liability of foreignness and the liability of outsidership and find that business network stability is critical. It does not moderate the relation between cultural difference and NPS adoption but attenuates the negative relation between institutional distance and NPS adoption, indicating that the liabilities of foreignness and outsidership play different roles in internationalization.

Crowdfunding to overcome the immigrant entrepreneurs’ liability of outsidership: the role of internal social capital

Crowdfunding to overcome the immigrant entrepreneurs’ liability of outsidership: the role of internal social capital

Revisiting the concepts of liability of foreignness and liability of outsidership from foreign subsidiary management perspective

The concepts of liability of foreignness and liability of outsidership have been central in international business research. The Uppsala model explains that firms often face obstacles and opportunities in management practices in a host market when internationalizing abroad. International business scholars discussed these concepts redundantly but vaguely in the literature. Only a few literature sources defined and utilized the concepts clearly over the last decade, however, it has not been demonstrated how the key constructs help to explain firms’ foreign subsidiary management. Therefore, the study reconsiders the concepts and identifies a proper utilization of the concepts in the texts drawing on an intensive systematic literature review in the leading international business and strategy journals from 2011 to 2021. The study also analyzes the articles in which the authors find ambiguous and overlapping use of the concepts by clarifying key constructs as identifiers. The study integrates defensive and offensive options for overcoming liability of foreignness and liability of outsidership into our conceptual model of operational structures from the foreign subsidiary management perspectives. The study contributes by providing a novel intensive literature review of the concepts over the last decade; by clarifying the key identifiers to distinguish the concepts in the leading international business and strategy journals; by proposing newly integrated conceptual models of defensive and offensive options from foreign subsidiary management perspectives with the focus on intra-organizational structures for operational aspects.

Liability of foreignness and liability of outsidership: understanding blockchain through Uppsala lens

Liability of foreignness and liability of outsidership: understanding blockchain through Uppsala lens

What Determines Innovative Performance of International Joint Ventures? Assessing the Effects of Foreign Managerial Control

International joint ventures (IJVs) have long been considered a vibrant venue for innovation, one source of sustainable competitive advantage. Nonetheless, there is a paucity of research that seeks to understand what determines their innovative performance. We draw attention to and examine the control structure of IJVs as a determinant of innovation. Using the complementary lenses of local embeddedness, the liability of outsidership, and open innovation, we argue that foreign managerial control reduces IJV innovation and that equity ownership balance between foreign and local parent firms and affiliation of IJVs with local market business groups weaken this negative relationship. Using panel data of 48 IJVs in Korea during the periods between 2000 and 2016, we find empirical support for these arguments. This study contributes to the literature by extending our understanding of how to design IJVs for enhancing innovative output and consequently improving their sustainability.

Commercial diplomacy as a mechanism for passive-reactive SME internationalisation: overcoming liabilities of outsidership

This study contributes to SME internationalization literature by conceptualizing commercial diplomacy (CD) as a mechanism, which enables SME internationalization. Specifically, CD provides solutions to remedy for SMEs’ liabilities of outsidership when those SMEs are compelled to internationalize under conditions of abrupt environmental shock in their domestic market. Using the Greek economic crisis triggered in 2008 as a research setting, we examine a situation in which established SMEs previously apathetic to internationalization had to assume the risks of internationalizing or face extinction. With data generated through 35 open-ended semi-structured interviews of commercial diplomats between 2013 and 2017, we conceptualize and empirically validate CD as a missing link in staged and networkrevised theories of internationalization. In doing so, this paper overcomes the current inability of extant SME internationalization literature to account for forced internationalization of established SMEs as a reaction to environmental shocks in which building networks is unfeasible and accessing established networks requires time that these firms do not have.

International Entrepreneurship at a Leading Brazilian Software Services Provider: The Case of CI&T

Objective: This case aims at discussing to what extent a company from an emerging country, Brazil, can become a major player on the global stage of the software industry.Method: Teaching case, based on personal interviews with top executives and secondary data.Main results: CI&T is one of the most successful Brazilian IT companies in establishing a position in foreign markets. The case offers a detailed description of the internationalization process of the firm and discusses how the firm can develop its internationalization, facing the challenges and opportunities for further expansion.Relevance/originality – This teaching case offers a real situation of an IT company from Brazil that developed a successful international strategy.Theoretical / Methodological Contributions – The case contributes to foster the understanding of the three major liabilities of companies from emerging countries – liabilities of foreignness, liabilities of outsidership and liabilities of smallness.Social / management contributions – The case can be used in International Business courses to improve managerial skills of students and executives.

Moving beyond Liability of Foreignness: Liability of Outsidership and an Extension of Uppsala Intern (WITHDRAWN)

I embrace the concept of liability of outsidership to explain the internationalization process in the era of globalization. The liability of outsidership results from the lack of knowledge about fo...

Crowdfunding to Overcome Liability of Outsidership: Drivers of Immigrants' Fundraising Performance

This paper examines the drivers of immigrant entrepreneurs’ performance in crowdfunding activity. Drawing on the immigrant entrepreneur and crowdfunding literatures, and using data from 2,231 Kicks...

Bureau de Eventos: internationalization of an emerging country event planning company

Theoretical basis The case can be used to examine the resources and capabilities of small firms considering entering international markets. It can also be a vehicle for examining typical barriers that such companies may face and must overcome when expanding abroad: liabilities of smallness, liabilities of foreignness, liabilities of emergingness and liabilities of outsidership. Research methodology The case is based on several interviews with both entrepreneurs over a one-year period and on secondary information from reports and documents. Case overview/synopsis This teaching case presents the trajectory of a Brazilian services company operating in the corporate events planning industry. The case explores the potential for the company’s international expansion, and the vision and engagement of the entrepreneurs, despite several barriers the company needs to overcome. Complexity academic level The case can be used in Entrepreneurship and International Marketing courses, both at graduate and undergraduate levels. It can also be used in training seminars for executives of tourism and events planning companies, and for employees of export promotion agencies.

Understanding changes within business networks: evidences from the international expansion of fashion firms

PurposeThe purpose of this paper is to address the topic of business network dynamics and identify different relational paths, as forms of change in business relationships and related types of network change. The paper contributes to the literature on business network dynamics by providing an understanding of relational paths in the context of firms’ internationalization and shading light on different forms of change in business relationships and types of network change. The paper also contributes to the understanding of liabilities in internationalization that has to do with business networks, namely the liability of outsidership.Design/methodology/approachThis paper is based on qualitative research following the multiple case study research approach. The authors propose three cases of internationalizing firms in the fashion industry that follows relational paths corresponding to different forms of change in business relationships that imply different types of network change.FindingsChanges to a firm’s business network may be addressed through relational paths, namely creation of new business relationships (activation), maintenance of existing relationships (integration) and ending of existing relationships (substitution). These relational paths can be considered forms of incremental (integration) and radical (activation and substitution) change in business relationships and lead to different types of network change for business network dynamics that coexist and influence each other within the same firm.Originality/valueThis paper contributes to a better understanding of business network dynamics by showing how firms change their business relationships following different relational paths as the best way to respond to the challenges and new opportunities offered especially by international markets. The present paper has relevant managerial implications since coping with change in business relationships is perhaps one of the most critical and difficult tasks for management, even more critical if compared to the increasing complexity of doing business internationally and the liabilities that firms face in their internationalization process, especially the liability of outsidership.

Innovating in a Digital Economy: Challenges for Global Strategy and Entrepreneurship Research

The rise of digital economy is reshaping the traditional conceptualization of international business and entrepreneurship. Instead of being constrained by lack of physical assets or cross-national differences, “born-globals” in cyberspace cost-efficiently innovate digital products and instantly distribute them to users around the world via online channels. The revenue models are also in flux, as businesses are relying on freemium and sponsor based business models instead of charging users. Such unique aspects of digital economy require substantial reevaluation of current theoretical frameworks, such as Uppsala Model, OLI paradigm and liability of foreignness. The challenges of a digital world also present important venues for scholarly enquiry as digital businesses face barriers of user adoption, liabilities of outsidership, retaliation by traditional businesses, increasing regulations by governments and stiff competition from around the world. Our panel aims at catalyzing the discussion on the intersecti...

Export barriers as liabilities: near perfect substitutes

PurposeThis study aims to use analogical reasoning to draw a conceptual link between liabilities in International Business (IB) and export barriers.Design/methodology/approachFollowing a review of 130 articles on export barriers, the study develops and applies a “liabilities” metonymy to connect the source construct (liabilities in the IB) and target subject (export barriers).FindingsLiabilities in the IB map to export barriers, and the concepts of liability of foreignness, liability of outsidership, liability of newness and liability of smallness can substitute export barriers.Practical implicationsAdoption of metonymy creates new opportunities for enhancing theory development while offering alternative perspectives regarding coping mechanisms for overcoming export barriers.Originality/valueThis, to the author’s best knowledge, is the first study in the IB to theorize based on metonymy.

Wineries and the liability of outsidership: cases from Brazil and Chile

This qualitative research was developed in light of behavioral theories regarding company internationalization. Its objective was to study the internationalization process of two wine exporters, one Chilean and one Brazilian, while focusing on the liability of outsidership. Data were collected from primary and secondary sources, mostly from semi-structured interviews with parties responsible for exportation. The data was treated with content analysis as grounded in current literature. The Undurraga winery (Chile) overcame the liability of outsidership by employing a market penetration strategy consisting of stages, with progression to each consecutive stage depending upon success in the current one. When the company enters into a new market, it identifies the liability and develops a strategy to deal with it. Even though the Brazilian winery, Salton, is over a century old, it has only attempted to internationalize recently. It showed characteristics of liabilities of foreignness and outsidership in practically every period analyzed, and has yet to resolve these problems.