Pride and prejudice: Unraveling and mitigating domestic country bias

Abstract

Firms pursuing expansion abroad increasingly face challenges of protectionism and discrimination against foreign products, a phenomenon widely recognized as domestic country bias. This research addresses discordant findings in previous work by introducing a new mechanism of domestic country bias that operates distinctly for national identifiers and ethnocentric consumers, connecting these two groups to regulatory focus theory. Using three experimental studies and a survey involving actual product possessions, we provide new evidence that consistently demonstrates that national identity and consumer ethnocentrism are associated with different goals, namely, an approach goal and an avoidance goal, respectively. Importantly, the results reveal that domestic country bias due to national identity can be attenuated by priming a prevention focus, while domestic country bias due to consumer ethnocentrism can be reduced by priming a promotion focus. The findings offer international marketing managers valuable insights into reducing domestic country bias and effectively segmenting international consumer markets. This research is the first to demonstrate how global companies can actively overcome domestic country bias by deploying suitable international marketing programs rather than avoiding specific segments and/or downplaying foreign origins.

Nationalist sentiments and the multinational enterprise: insights from organizational sociology

“…At home, MNEs can leverage their higher status positions to gain advantages in both the local labor market and among domestic consumers (Fischer, Zeugner-Roth, Katsikeas, & Pandelaere, 2022). Home-country MNEs can also benefit when uniform categorical stereotypes are applied to foreign firms, since such stereotypes blur firm-specific heterogeneity, making it difficult for individual foreign firms to stand out.…”

Beauty in the Eyes of the Beholders: How Government- and Consumer-Based Country-of-Origin Advantages and Disadvantages Drive Host Country Investment Dynamics

“…In contrast, consumers have a much narrower objective of consumption, and they tend to assess foreign firms in terms of their values and standing among peers regarding their purchase and use of foreign products and services (Diamantopoulos et al, 2019 ; Swaminathan et al, 2007 ). They have a more emotional assessment of their relationship with the foreign firm (Chan, 2018 ; Fischer et al, 2022 ; Verlegh & Steenkamp, 1999 ).…”

“…Consumers may prefer foreign firms from particular countries because of the implied connotations that the country of origin carries, such as superior technology, better design, or higher quality (Balabanis & Diamantopoulos, 2016 ; Lee et al, 2016 ). Consumers' cognitive limitations bias their perceptions of the country of origin (Antonetti & Manika, 2022 ; Fischer et al, 2022 ), and there is a need for an alignment with the industries that are perceived as being particularly advantageous in the country (Roth & Romeo, 1992 ). For example, firms from Germany and Japan tend to enjoy a strong advantage when they are in mechanical and high-tech industries (Kramer et al, 2008 ).…”

“…Some firms face a consumer-based country-of-origin disadvantage when consumers in a host country dislike the country of origin of the firm and its products. Consumers may dislike the country of origin for nationalistic reasons (Antonetti & Manika, 2022 ; Fischer et al, 2022 ) or because they perceive the country as being less developed than their own (Lee et al, 2016 ). The company may have to increase the quality of the product (Lee et al, 2016 ) or lower the price of the product significantly (Cui et al, 2012 ) to compensate for the negative perception of the country of origin.…”

“…On the one hand, in international marketing, the country of origin of a product has been discussed as an important source of disadvantage or advantage when selling foreign-made products. This has resulted in numerous studies under the term country-of-origin effect, with related concepts such as consumer nationalism or consumer ethnocentrism (Antonetti & Manika, 2022 ; Fischer et al, 2022 ; Herz & Diamantopoulos, 2017 ; Kong & Rao, 2021 ; Magnusson et al, 2019 ; Trinh et al, 2019 ). However, these studies pay little attention to how the country of origin affects firms themselves (Yu & Liu, 2018 ).…”