Peng_Chapter 10

Peng_Chapter 10 - LIABILITYOFFOREIGNNESS

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LIABILITY OF FOREIGNNESS differences in formal and informal institutions  governing the rules of the game in different countries  local firms are already well versed in these rules, but  foreign firms have to learn the rules quickly  foreign firms are often still discriminated against,  sometimes formally and other times informally
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WHERE TO ENTER? Location-specific advantages -  favorable locations in  certain countries may give firms operating there an advantage Agglomeration -  beyond geographic advantages, location- specific advantages also arise from the clustering of economic  activities in certain locations Natural resource seeking -  resources are tied to particular  foreign locations
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WHERE TO ENTER? Innovation seeking -  firms target countries and regions  renowned for generating world-class innovations Market seeking -  firms go after countries that offer strong 
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Peng_Chapter 10 - LIABILITYOFFOREIGNNESS

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