Overcoming the liability of foreignness

Article Abstract:

This study addressed the question of whether firms in a competitive, globally integrated environment face a "liability of foreignness" and to what extent either importing home-country organizational capabilities or copying the pratices of successful local firms can help them overcome this liability. Predictions were tested with a paired sample of 24 foreign exchange trading rooms of major Western and Japanese banks in New York and Tokyo. Results support the existence of aliability of foreignness and the role of a firm's administrative heritage in providing competitive advantage to its multinational subunits. They also highlightthe diffculty firms face in copying organizational practices from other firms. (Reprinted by permission of the publisher.)

International competition (Commerce), International competition (Economics)

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International expansion strategy of Japanese firms: capability building through sequential entry

Article Abstract:

This study examined the sequential entry process of Japanese electronic manufacturing firms into theUnited States during the period 1976-89. The firms first entered their core businesses and those in which they had a strong competitive advantage over local firms to reduce the hazard of failure. Learning from early entries enabled them tolaunch further entries into noncore businesses and into areas of weaker competitive advantage. The overall evidence suggests that Japanese firms are building capabilities to operate overseas through sequential entry. (Reprinted by permission of the publisher.)

Other Electrical Equipment and Component Manufacturing, Electronics, Foreign operations, Japan, Corporations, Electronics industry, Corporate growth, Corporations, Japanese

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Effects of international diversity and product diversity on the performance of multinational firms

Article Abstract:

This study examined the relationships among international diversity, product diversity, and firm performance. For a sample of large American industrial multinational enterprises (MNEs), it showed a consistent quadratic relationship between product diversification and MNE performance but minimal performance differences across different measures of international diversity. Analysis of the interactions of international diversity and product diversity indicates a weak effect from increasing internationalization on the performance of product diversity. (Reprinted by permission of the publisher.)

Diversification in industry, Industrial diversification

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