How to overcome Liability of Foreignness?
A study based on the Dutch multinational
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During the last two decades internationalization has been booming. One of the biggest influences is the Internet, which makes it easier for companies to cross borders and to spread their potential without traveling a great deal. Everything happens faster and easier. But when companies expand internationally this does not only bring advantages. Entering a country with a different culture, a different language and a different currency also bring liabilities. Previous research showed that liabilities cause many failures. Researchers have demonstrated that liabilities exist even when a company exp...
During the last two decades internationalization has been booming. One of the biggest influences is the Internet, which makes it easier for companies to cross borders and to spread their potential without traveling a great deal. Everything happens faster and easier. But when companies expand internationally this does not only bring advantages. Entering a country with a different culture, a different language and a different currency also bring liabilities. Previous research showed that liabilities cause many failures. Researchers have demonstrated that liabilities exist even when a company expands into its neighboring countries. In their research liabilities are categorized into four sources: Cross-border transfer, interaction with the local government, local discrimination, and interaction within the multinational. This thesis investigates whether these liabilities are still present and specifically what the Dutch multinationals did to overcome these liabilities.
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