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Liability of Foreignness in Historical Context: German Business in Preindependence India (1880–1940)

Published online by Cambridge University Press:  02 July 2015

Christina Lubinski
Christina Lubinski*
Affiliation:
Centre for Business History, Department for Management, Politics and Philosophy, Copenhagen Business School, Porcelænshaven 18A, 2000 Frederiksberg, Denmark. E-mail: cl.mpp@cbs.dk.
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Abstract

Much of international business literature has dealt with the costs of engaging in business abroad. Recently, several authors have called into question the basic assumptions of the “liability of foreignness” argument. They plead for a more nuanced look at nationality beyond the dichotomy of foreign vis-à-vis local firms and raise doubts about the assumption that more distance necessarily translates into higher costs. This article adds to this criticism with a historical analysis of German multinational enterprises in preindependence India. The case proves (1) the relevance of specific nationalities, (2) the importance of conflicting host and home country attitudes for understanding multinationals’ strategy, and (3) the possibility of spillover effects across national borders. Expanding on existing theory, the article makes a point in showing how malleable and contextual associations with nationality are, thus making a thorough historical analysis of commercial, political, and cultural links between host and home country indispensable.

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Enterprise & Society , Volume 15 , Issue 4 , December 2014 , pp. 722 - 758
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© The Author 2014. Published by Oxford University Press on behalf of the Business History Conference. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com

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Footnotes

This paper has benefitted greatly from discussions with the participants of a 2014 research seminar at the German Historical Institute in Washington, DC and of a session at the Business History Conference 2014 in Frankfurt. I am deeply indebted to Christine Strotmann for her research assistance, Jessica Csoma, Jeffrey Fear, Jan Logemann, Corinna Ludwig, and Atiba Pertilla for helpful comments on earlier drafts. My special thanks go to Rüdiger Borstel of Bayer and Frank Wittendorfer of Siemens for their support and kindness. The pictures are courtesy of Bayer Corporate Archives and Siemens Corporate Archives. All copyrights held by the owners.

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