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The Impact of Proximity on Resistance to Foreign Ventures: The Cases of India and Japan

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  • Marie-Laure Baron

    (NIMEC - Normandie Innovation Marché Entreprise Consommation - UNICAEN - Université de Caen Normandie - NU - Normandie Université - ULH - Université Le Havre Normandie - NU - Normandie Université - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Claire Capo

    (NIMEC - Normandie Innovation Marché Entreprise Consommation - UNICAEN - Université de Caen Normandie - NU - Normandie Université - ULH - Université Le Havre Normandie - NU - Normandie Université - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

Abstract

Over the years, a body of literature has developed that consistently shows how the liability of foreignness affects MNCs' performance. Institutional distance − regulatory, normative and cognitive − between the incomer and insiders has been identified as the likely source of the highest cost in doing business abroad. In this article, we draw on the existing literature but take the opposite perspective, looking instead at how various dimensions of proximity between local players increase MNC distance and foster local resistance. The study investigates two contexts and cases, India and Japan, at the time of foreign retailer entry and analyses the interplay between local proximity and local resistance. The analysis presents four dimensions of proximity, namely spatial proximity, relational proximity, identity proximity and inter-organizational proximity, which present the stiffest challenges to foreign retail ventures entering markets as newcomers.

Suggested Citation

  • Marie-Laure Baron & Claire Capo, 2017. "The Impact of Proximity on Resistance to Foreign Ventures: The Cases of India and Japan," Post-Print hal-01597629, HAL.
    • Handle: RePEc:hal:journl:hal-01597629
    DOI: 10.22439/cjas.v34i2.5307
    Note: View the original document on HAL open archive server: https://hal.science/hal-01597629
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    References listed on IDEAS

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    Keywords

    proximity; Liability of foreignness; resistance; Asia; retail;
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