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Assets of Foreignness: A Theoretical Integration and Agenda for Future Research

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  • Mallon, Mark R.
  • Fainshmidt, Stav

Abstract

International business scholars are increasingly focusing on the unique advantages of being foreign, or assets of foreignness (AOFs). Although scholars have identified a broad range of AOFs, it is unclear why they exist. In this paper, we bring together extant yet disparate literature and integrate insights from the institution-based view, resource-based theory, and transaction cost economics to advance theory of the underlying sources and workings of AOFs. In doing so, we elucidate the conceptual underpinnings of AOFs as well as their relation to multinational enterprise (MNE) success, complementing scholarship regarding the liability of foreignness. Critically, we also distinguish AOFs from related concepts, such as ownership advantages, explaining how and why they differ conceptually. We put forth several testable propositions that stem from our synthesis of theory in this research stream, bolstering the conceptual foundations of the drivers, dynamics, and longevity of AOFs. Finally, we draw attention to under-researched aspects of AOFs, thereby propelling a theory-based agenda for future research on AOFs and, consequently, MNE success.

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  • Mallon, Mark R. & Fainshmidt, Stav, 2017. "Assets of Foreignness: A Theoretical Integration and Agenda for Future Research," Journal of International Management, Elsevier, vol. 23(1), pages 43-55.
    • Handle: RePEc:eee:intman:v:23:y:2017:i:1:p:43-55
    DOI: 10.1016/j.intman.2016.08.001
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