Beyond product markets: new insight on liability of foreignness from capital markets

R. Greg Bell, Igor Filatotchev, Abdul A. Rasheed

Publication: Scientific journalJournal articleResearch

162 Citations (Scopus)

Abstract

We expand the Liability of Foreignness (LOF) construct beyond the product market domain to
include liabilities faced by firms attempting to secure resources in host capital markets. Drawing
from institutional theory and research in finance, we identify institutional distance, information
asymmetry, unfamiliarity, and cultural differences as the main sources of capital market LOF
(CMLOF). We then propose that the impact of these antecedent factors can be moderated
through bonding, signaling, organizational isomorphism, and reputational endorsements.
Original languageEnglish
Pages (from-to)107-122
JournalJournal of International Business Studies
Volume43
Issue number2
DOIs
Publication statusPublished - 1 Feb 2012

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