Toward a construct of liability of origin

Abstract

In this paper, we advance a novel concept of liability of origin to explicate the mechanisms through which location can be become either a liability or an advantage. Our analysis sheds light on how firms' ability to compete and gain legitimacy can be derailed or enhanced by their geographical location. We illustrate our theoretical analysis using multiple cases in the airline industry in Africa. Four distinct phases that explicate how liability of origin manifests in firms' legitimacy quest are indicated. Our work highlights how actions and inactions of rival firms can make the geographical origin of a firm "geographicalness" to shift from being a strategic asset to become a liability. We outline a number of implications for practice and fruitful avenues for future research.

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