Location Decisions and the Liability of Foreignness: Spillover Effects Between Factor Market and Capital Market Strategies

Lindorfer, Robert; d’Arcy, Anne; Puck, Jonas F.

doi:10.1016/j.intman.2016.04.002

Cited by 20 publications

(13 citation statements)

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“…As stated above, firms have been shown to use financing strategies (both equity and bonds) across borders. Recent research has shown that such international financing is connected with a firm's FDI activities (Lindorfer et al, 2016), indicating spillover effects between the two markets. However, we know little about the nature and potential contingencies of this relationship and why some firms co‐locate while others do not.…”

Section: Integrating Perspectivesmentioning

confidence: 99%

“…However, the processes of internationalization of product and factor markets are increasingly intertwined. For example, Gu, Filatotchev, Bell, and Rasheed (in press) and Lindorfer, d'Arcy, and Puck (2016) provide evidence that foreign capital market entry is often associated with a firm entering product markets in the host country, and vice versa. In finance, research on the motivation, processes, and governance mechanisms that are associated with MNCs entering international markets is so far rather limited.…”

Section: Introductionmentioning

confidence: 99%

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Finance and the multinational company: Building bridges between finance and global strategy research

Puck

Filatotchev

2018

Global Strategy Journal

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We are interested in the degree to which there three groups of journals are connected by publications they reference in the papers published. This will provide evidence about how far the three groups relate to similar underlying concepts, theories, and perspectives. To investigate this, we compute the bibliographic coupling between the articles published in the journals listed above. The degree to which two articles are considered coupled depends on the number of references that appear in the reference lists in both articles (Kessler, 1963); that is, the percentage of references that is shared between two articles. If two articles reference a paper titled "Global Strategy and Finance" this will count toward their degree of coupling. If one article "Global Strategy" cites an article "Finance", and the article "Finance" cites the article "Global Strategy", this will not count toward coupling, because they do not cite the same article. The latter example would be a case of a cross-reference, which is not what we investigate here. We have chosen this methodology because, in cross-referencing, the degree to which articles are related will depend on the standing of the journal they are published in (as authors tend to cite papers published in well-ranked journals), which makes a comparison across fields with different numbers of top-ranked journals difficult. Rather, we compute the average association strength between articles published in different outlets (Van Eck & Waltman, 2007). This coefficient represents the ratio of coupling links between nodes (i.e., the journals) over all coupling links between one node and all other nodes, normalized for the total number of possible links. It takes the maximum value of one for a pair of journals that reference exclusively the same publication outlet, and a minimum of zero for a pair of journals that have no references to a common publication outlet. These numerical operations result in a symmetric matrix representing the coupling strength between pairs of journals. Computations for this illustration are performed using the normalizeSimilarity() command in the bibliometrix package (Aria & Cuccurullo, 2017) in an R 3.4.2 distribution. We plot this matrix below in Figure 1. Darker fields represent stronger coupling, brighter fields less coupling. The diagonal is set to zero. Figure 1 shows the resulting average coupling between articles in management, finance, and IB/GS journals. The illustration shows that the three groups of journals indeed form rather distinct ecosystems of publications. There is very strong coupling among finance journals, while there is very PUCK AND FILATOTCHEV

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Section: Integrating Perspectivesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Finance and the multinational company: Building bridges between finance and global strategy research

Puck

Filatotchev

2018

Global Strategy Journal

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“…These streams of research are closely linked to research on LOF and AOF, but the connection needs to be more clearly identified. Take institutional distance for example, some studies treat it as a driver of LOF (Eden & Miller, 2004;Insch & Miller, 2005), others as a moderator of the impact of LOF (Añó n Higó n & Manjó n Antolín, 2012), and still others as a control variable used when studying the impact of foreignness (Lindorfer et al, 2016;Tupper et al, 2018). As with the rise of research on LOF, a growing number of strategies have been identified to offset, mitigate, overcome and reshape foreignness.…”

Section: Review Structurementioning

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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“…From the 104 factors, the WGI (including voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law and control of corruption) proposed by Kaufmann et al occupies a large proportion of 40.7% as the most used dimensions, as scholars believe that the level of institution cannot be separated from the ability of the government and the degree of incorruptibility (Malhotra and Gaur, 2014; Contractor et al , 2014; Ando, 2012; Shirodkar and Konara, 2016; Chari and Shaikh, 2016). The Heritage Foundation Index (business freedom, trade freedom, investment freedom, labor freedom and proprietary rights) measures the impact of liberty and free markets around the globe that are also widely absorbed as measurement elements, up to 12.2% (Petrou, 2015; Popli et al , 2016; Gubbi and Elango, 2016; Lindorfer et al , 2017; Trąpczyński and Gorynia, 2017; Cho and Ahn, 2017). Berry et al (2010) ND dimensions are an important composite factor in ID measurements used by some modern scholars (Pinto et al , 2017; Lindner et al , 2016).…”

Section: Micro Analysis Of 12 National Distance Measurementsmentioning

confidence: 99%

The role of national distance in international business: a review from 1980 to 2017

Zhou¹,

Kwon

Zhang

et al. 2020

RIBS

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Purpose During the past several decades, national distance (ND) increasingly became a vital cornerstone in international business (IB) research, as both explicit and implicit distance are parts of the essential reasons for IB activities. However, there are various and chaotic methods to measure ND in the last literature; therefore, this paper aims to suggest legitimate uses of ND in the IB field and the best ND dimensions for various situations. Design/methodology/approach This paper used a historical overview of the theoretical background and conceptual development of ND based on the past four decades worth of studies in leading 17-IB journals using Google Scholar. The authors also focus on multiform ND measurement methods and details through qualitative and quantitative analysis based on previous studies’ data collection. Findings This research summarized the common measurement methods and elements of different ND and proposed solutions based on a multifaceted analysis. Originality/value The micro analysis examines each type of ND in terms of the proportion of variables, issues, measurement methods, representative proxies beyond previous studies. This research also tried to provide clarity and suggest solutions to these problems through our macro& micro-analysis.

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Location Decisions and the Liability of Foreignness: Spillover Effects Between Factor Market and Capital Market Strategies

Cited by 20 publications

References 46 publications

Finance and the multinational company: Building bridges between finance and global strategy research

Finance and the multinational company: Building bridges between finance and global strategy research

Foreignness research in international business: Major streams and future directions

The role of national distance in international business: a review from 1980 to 2017

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