Regional economic stress as moderator of liability of foreignness |
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Authors: | Wolfgang Sofka Jrg Zimmermann |
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Institution: | Wolfgang Sofka,Jörg Zimmermann, |
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Abstract: | In this paper we develop optimized localization strategies for multinational firms to overcome their liability of foreignness by adding a regional dimension within a country. We explore conceptually whether economic stress in a region has a mitigating or reinforcing effect. We test this analytical framework empirically on the highly internationalized German car market and find that intra-national regions under economic stress are more promising markets for foreign car manufacturers as the effects of liability of foreignness are significantly lower there. |
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Keywords: | Liability of foreignness Multinational strategy Automotive market |
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