How do local and foreign firms compete? Competitive actions in an emerging economy

Yang, Wei; Meyer, Klaus E.

doi:10.1016/j.ibusrev.2020.101689

Cited by 13 publications

(9 citation statements)

References 130 publications

(216 reference statements)

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“…The offensive option consists of local networking, learning from locals, operations localization, and horizontal operational structures [Luo, 2001]. Given practical trade-offs, we have identified potential advantages and disadvantages in selecting either option [Das, Teng, 2001;Yang, Meyer, 2020]. Simultaneously, MNCs might encounter varying degrees of multifaceted nature, vulnerability, and scale when internationalizing because they lack the necessary resources [Benito, Peters-en, Welch, 2011].…”

Section: Discussionmentioning

confidence: 99%

“…The trade-offs between the consequences of localization and standardization of operations affect the competitive actions that MNCs should take [Yang, Meyer, 2020]. Thus, recent studies have found that formal institutional distance has beneficial consequences, followed by more positive effects at the managerial levels [Stahl et al, 2016;Trąpczyński, Halaszovich, Piaskowska, 2020].…”

Section: Theoretical Foundations: Key Conceptsmentioning

confidence: 99%

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

Satô¹

2022

Vestnik SPbSU. Management

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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.

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Section: Discussionmentioning

confidence: 99%

Section: Theoretical Foundations: Key Conceptsmentioning

confidence: 99%

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

Satô¹

2022

Vestnik SPbSU. Management

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“…Based on our findings of the domestic firm as a challenger, we broaden the current treatment of competitive aggressiveness (Hughes-Morgan et al , 2018) in three ways. First, extant research focuses on offensive actions against competitors in the market environment, ignoring actions taken in the broader environment (Yang and Meyer, 2020). Instead, we show that a challenger could act against its competitors in the non-market environment.…”

Section: Discussionmentioning

confidence: 99%

“…Since Chen's (1996) pioneering work, scholars have fruitfully studied how firms exchange competitive actions to increase market competitiveness. While most studies are conducted in developed countries, an increasing number of studies started to shift attention to emerging economies (Li, 2019;Yang and Meyer, 2020). However, this literature primarily focused on how the multinational enterprise (MNE) takes on the domestic firm in the market environment, overlooking a different yet increasingly prevalent situation: as the domestic firm grows, it may challenge the MNE and push for advantage by contending against the latter in the non-market environment.…”

Section: Introductionmentioning

confidence: 99%

Politics, rumors and identity: how does a domestic firm challenge an MNE in the non-market environment amidst home–host political hostility?

Tzeng

2022

MBR

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Purpose Prior studies of competitive dynamics in emerging economies restricted their attention to how the multinational enterprise (MNE) initiates actions against the domestic firm in the market environment with no regard for the home-host relations. By contrast, this study aims to investigate how the domestic firm challenges the MNE in the non-market environment when there is home–host political hostility. Design/methodology/approach The authors conducted a case study of non-market rivalry between an MNE from the Taiwan region and a domestic firm on the Chinese mainland in the period 2004–2008. Findings Riding the home–host political hostility, the domestic firm mounted political tactics against the MNE on two fronts. It lobbied the government for identity-targeted policy changes, which demanded state-funded clients buy only from domestic suppliers. It also unethically spread identity-targeted political rumors to vilify the MNE in the local society. The MNE defended itself against the unfavorable policy by engaging in identity work of restructuring its distribution channels to conceal its “foreign” (non-domestic) identity. To fight off the rumors, it built a corporate citizen identity by identity work of aligning corporate social responsibility and research and development with local policy priorities. Originality/value The authors broaden the concept of competitive aggressiveness to include non-market actions, particularly unethical ones targeting a rival’s identity. The authors contribute to identity work scholarship by pinpointing an unrecognized phenomenon – high-effort identity work, used by the MNE as a defensive response. The emergent findings develop a moral perspective on non-market rivalry.

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“…Yang and Meyer's (2020) study of how foreign and local firms compete in emerging economies is interesting in that it simultaneously examines both LOF and LOL (Yang & Meyer, 2020). It shows that the liability of foreignness results in weaker government ties for MNEs' subsidiaries.…”

Section: Incorporation Of New Contexts In Foreignness Researchmentioning

confidence: 99%

Foreignness research in international business: Major streams and future directions

Xie

2021

J Int Bus Stud

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Foreignness has long been a central construct in international business research, with research streams examining its conceptualizations, manifestations, and consequences. Researchers started by taking foreignness to be a liability, then later considered the possibility of its being an asset. A still more recent view is that foreignness is an organizational identity that a firm can purposefully manage. Broadly conceived, foreignness is an umbrella construct that directly or tangentially covers research on country of origin, institutional distance, firm-specific advantages, and the ownership–location–internalization eclectic paradigm. We review the body of research on foreignness and track the evolution of its four streams, liability of foreignness, asset of foreignness, drivers of foreignness, and firm responses to foreignness. We call for a clearer conceptualization and a sounder theoretical grounding of the foreignness construct, more integration of the liability of foreignness and the asset of foreignness research streams, greater attention to the multiple strategies firms use to manage foreignness, and the extension of the field to less-explored contexts such as emerging economies, digitalization, and de-globalization.

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How do local and foreign firms compete? Competitive actions in an emerging economy

Abstract: We thank the participants of the 2015 Academy of Management Meeting for helpful comments. We thank our former colleagues at the China Europe International Business School (CEIBS) for various forms of support. All remaining errors are our responsibility.

Cited by 13 publications

References 130 publications

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

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

Politics, rumors and identity: how does a domestic firm challenge an MNE in the non-market environment amidst home–host political hostility?

Foreignness research in international business: Major streams and future directions

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