Based on a large-scale survey of Chinese e-business firms, our findings show that institutional capabilities reflected in firms' social-political networking and business model innovation abilities can alleviate e-business firms' liabilities of foreignness
and enhance international performance.
SMEs tend to be particularly prone to liabilities of foreignness
(Lu & Beamish, 2001).
Dynamics of globalization; location-specific advantages or liabilities of foreignness
Mitigating liabilities of foreignness
: defensive versus offensive approaches.
Liabilities of foreignness
are defined as the extra tacit and social costs that foreign companies or individuals incur when operating abroad (Zaheer 1995; Eden and Miller 2004).
Offsetting liabilities of foreignness
and upgrading capabilities is easier in some advanced economies than in others.
Identifying liabilities of foreignness
and strategies to minimize their effects: The case of labor lawsuit judgments in the United States.
While the process model of internationalization suggests a sequential approach to foreign entry that helps firms to overcome the liabilities of foreignness
(Johanson and Vahlne 1977), the literature on international entrepreneurship argues that early foreign entry helps firms to generate learning advantages of newness, which enables them to perform better in foreign markets (Autio et al.
The costs of adaptation to the heterogeneous environment the so-called liabilities of foreignness
appear particularly in the case of a first entry into a foreign market or a certain foreign region (Hymer 1976; Zaheer 1995).
Abstract Overseas acquisitions as a mode of international expansion entail a high level of risk, especially for firms from emerging economies which face considerable liabilities of foreignness
and newness in international markets.
Third, as earlier explained, cross-border knowledge is likely to suffer from liabilities of foreignness
(Zaheer 1995) and unprovenness (Rogers 1983; Szulanski 1996) which hamper the learning process because of the resistance of managers to accept the cross-border knowledge.
Second, there is the literature on the liabilities of foreignness
(Zaheer 1995; Zaheer and Mosakowski 1997), which address costs associated with spatial distance (e.g., travel, transportation, and coordination over distance or time zones), company-specific costs (e.g., owing to unfamiliarity in a foreign environment), host country environment costs (e.g., lack of legitimacy, economic nationalism), and home country environment costs.