What is it about?
The purpose of this paper is to utilize key insights from social network theory to enhance understanding of overcoming the liability of outsidership. Specifically, it examines the influence of structural attributes of networks on the motivational stance of both network insiders and outsiders in relation to overcoming the liability of outsidership. A related aim is to explore the role of network positions of insider actors in terms of its impact on the speed of market entry.
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Why is it important?
This study reveals the inter-relationship between the liability of foreignness (LOF) and the liability of outsidership (LOO) through employing social network theory.It also adds a more coherent inside-out perspective into the overcoming the liability of outsidership discussion which has been extensively dominated by an outside-in perspective.
Perspectives
Social network theory provides strong potential for a more comprehensive understanding of the internationalization phenomena. The paper demonstrates that while the cost of overcoming the liability of outsidership is higher in closed target network as compared to open networks, the expected benefits of an insidership position in closed or open networks are affected by the outsider firm’s perception of the liability of foreignness in the market it wishes to enter. Considering the differential enabling characteristics of closed and open networks in terms of facilitating tacit knowledge sharing as opposed to explicit information flows, we reveal that liability of foreignness operates as a negative moderator for the relationship between network structure and the willingness of the outsider to invest in gaining insidership.
Yusuf Kurt
University of Manchester
Read the Original
This page is a summary of: Revisiting the Uppsala internationalization model, International Marketing Review, February 2018, Emerald,
DOI: 10.1108/imr-11-2014-0345.
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