What Do We Know about Going Global Early? Liabilities of Foreignness and Early Internationalizing Firms

Lydia Bals, Heather Berry, Evi Hartmann, Gordian Raettich

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    In this chapter, we embrace the recent phenomenon of early internationalizing firms with the goal of understanding these firms in light of decades of research on multinational firms, which has long stressed liabilities of foreignness. It is often implicitly assumed that the only way to reduce liabilities of foreignness is by doing business in foreign markets and learning about the local business environment. However, in this chapter, we focus on several distinctive antecedent firm characteristics that have been shown to facilitate early international expansion by firms, but which are not commonly considered in the international business literature. We perform a systematic review of the literature on early internationalizing firms (following David & Han, 2004), based on the seminal work of Oviatt and McDougall (1994) to guide our analysis of early internationalizing firms and to identify important ways in which these firms differ from multinational firms. We argue that long-standing arguments about the impact of liabilities of foreignness on firm foreign expansion apply to newly internationalizing firms, but that these liabilities are reduced by the experiences and knowledge of the founders and top managers in these firms acquired prior to the inception of these firms.
    Original languageEnglish
    Title of host publicationPhilosophy of Science and Meta-Knowledge in International Business and Management
    EditorsTimothy M. Devinney, Torben Pedersen, Laszlo Tihanyi
    Place of PublicationBingley
    PublisherEmerald Group Publishing
    Publication date2013
    ISBN (Print)9781781907122 , 9781781907139
    Publication statusPublished - 2013
    SeriesAdvances in International Management

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