Research Notes and Commentaries
From home country to home base: A dynamic approach to the liability of foreignness
Article first published online: 1 APR 2014
Copyright © 2014 John Wiley & Sons, Ltd.
Strategic Management Journal
How to Cite
Zhou, N. and Guillén, M. F. (2014), From home country to home base: A dynamic approach to the liability of foreignness. Strat. Mgmt. J.. doi: 10.1002/smj.2242
- Article first published online: 1 APR 2014
- Accepted manuscript online: 12 FEB 2014 06:05AM EST
- Manuscript Revised: 28 JAN 2014
- Manuscript Accepted: 28 JAN 2014
- Manuscript Received: 19 FEB 2013
- international strategy;
- location choice of foreign market entry;
- liability of foreignness;
We argue that the influence of the home country wanes as the firm increases its geographic reach. We introduce the concept of the “home base” to capture the effect of the set of countries in which the firm operates. We expect the dynamic liability of foreignness defined relative to the home base to be a better predictor than the static liability of foreignness defined relative to the home country. We also expect the diversity of foreign experience to increase foreign market entry. We find support for these hypotheses with data on Chinese listed firms investing abroad between 1991 and 2007. Copyright © 2014 John Wiley & Sons, Ltd.