The Liabilities of Foreignness Revisited: Concept, Measurement, and Its Impact on Firm Performance

• 발행기관: 한국무역연구원
• 저자명: Jung-Min Son Young-Soo Yang
• 간행물 정보: 『무역연구』제21권 제1호, 71~85쪽, 전체 15쪽
• 주제분류: 경제경영 > 무역학
• 파일형태: PDF
• 발행일자: 2025.02.28

국문 초록

Purpose - The purpose of this paper is to investigate how LOF (liabilities of foreignness) imposes additional costs on multinational enterprises (MNEs) operating in foreign markets, arising from cultural, institutional, and economic differences, as well as challenges in gaining local legitimacy. Design/Methodology/Approach - This paper revisits the concept of liability of foreignness (LOF) through a comprehensive literature review, critically examining its definition, measurement, and implications for corporate performance. Findings - While earlier studies predominantly treated LOF as an unavoidable cost of international business, recent research emphasizes its dynamic and context-dependent nature, shaped by factors such as host country environment, the strategic choices of firms, and the duration of foreign operations. Research Implications - This study proposes an alternative definition of the liabilities of foreignness. In existing literature, liabilities of foreignness are typically described as additional costs incurred in the host country, which can be easily offset by capital. In contrast, this study, through a comprehensive review and analysis of the existing literature, suggests that liabilities of foreignness are a relative concept, varying in size and composition depending on the differences in economic development between the host and investor countries. Furthermore, it proposes that these liabilities may directly hinder the effective leverage of the competitive advantages held by the investing company in the host country.

목차

Ⅰ. Introduction

Ⅱ. Theoretical Background on Liability of Foreignness

Ⅲ. Conceptual Framework and Factors Influencing the Liability of Foreignness

Ⅳ. Conclusion

References

키워드

Firm-Specific Advantage Internationalization Liabilities of Foreignness