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Country of Origin as a Constraint to Internationalization

Author

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  • Raquel Meneses

    (School of Economics and Management, University of Porto, Porto, Portugal Author-2-Name: Sara Santos Author-2-Workplace-Name: School of Economics and Management, University of Porto, Porto, Portugal Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

Objective - Globalization has enabled the increase of competitiveness and opportunities for companies to sell their goods to worldwide consumers. Due to the wider range of products offered and increasing similarity of those products, the country of origin becomes an important variable when studying the evaluation process of foreign products. The origin of a product acts as a mark of quality, which ultimately influences the purchase intentions of consumers. When negative, this may act as a constraint on internationalization, making it difficult to accept a product from a certain origin. There is, therefore, a gap in how companies can mitigate and overcome a negative country of origin effect (COE). This study seeks to fill this gap and suggest strategies to overcome this issue. Methodology/Technique - The methodology applied in this study is the Grounded Theory. The data was collected from interviews with Portuguese entities, so different cases can be compared and discussed. Although Portugal's image has changed over time, there remains a stigma associated with it. The most recent financial and political crisis has damaged the perception of Portugal in the international sphere, hence, it has been selected for the formation of a negative COE. Findings and Novelty - Some firms currently have existing strategies to resist the negative effect of country of origin, such as improvement of brand awareness, credibility and international visibility. To achieve that, companies must adopt a wide set of strategies which involve both defensive and offensive approaches.

Suggested Citation

  • Raquel Meneses, 2019. "Country of Origin as a Constraint to Internationalization," GATR Journals jber176, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jber176
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    References listed on IDEAS

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    1. Suter, Mariana Bassi & Borini, Felipe Mendes & Floriani, Dinorá Eliete & da Silva, Dirceu & Polo, Edison, 2018. "Country-of-origin image (COI) as a country-specific advantage (CSA): Scale development and validation of COI as a resource within the firm perspective," Journal of Business Research, Elsevier, vol. 84(C), pages 46-58.
    2. Maheswaran, Durairaj, 1994. "Country of Origin as a Stereotype: Effects of Consumer Expertise and Attribute Strength on Product Evaluations," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 21(2), pages 354-365, September.
    3. Maruyama, Masayoshi & Wu, Lihui, 2015. "Overcoming the Liability of Foreignness in International Retailing: A Consumer Perspective," Journal of International Management, Elsevier, vol. 21(3), pages 200-210.
    4. Suh, YongGu & Hur, JungYun & Davies, Gary, 2016. "Cultural appropriation and the country of origin effect," Journal of Business Research, Elsevier, vol. 69(8), pages 2721-2730.
    5. Luo, Yadong & Shenkar, Oded & Nyaw, Mee-Kau, 2002. "Mitigating liabilities of foreignness: Defensive versus offensive approaches," Journal of International Management, Elsevier, vol. 8(3), pages 283-300.
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    More about this item

    Keywords

    Country of Origin; Country of Origin Effect; Internationalization; Constraints; Grounded theory.;
    All these keywords.

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • F69 - International Economics - - Economic Impacts of Globalization - - - Other

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