Work

Liability or asset? The role of foreignness in intellectual property litigations in an emerging market context

Year: 2026

Type: article

Abstract: While foreignness has traditionally been viewed as a liability, recent scholarship increasingly argues that it can also serve as a potential asset. Drawing on research on locational dependencies, this study explores the host-country institutional context as a driver of the asset of foreignness, emphasizing how heterogeneity in foreign dependencies across host locations shapes the advantages that foreign firms can derive. Using a unique sample of intellectual property (IP) lawsuits in Chinese courts, we find that, in general, firms with higher levels of foreign ownership are more likely to win IP lawsuits. We elucidate the underlying mechanism by showing that the effects of the asset of foreignness are amplified when host markets are more economically and technologically dependent on foreign investment. Our additional analyses further suggest the coexistence of the liability and asset of foreignness, indicating that not all firms benefit equally from foreignness. This study advances research on international business and locational dependencies by highlighting the context-contingent nature of foreignness.

Source: Journal of World Business

DOI: 10.1016/j.jwb.2026.101742

Authors: Xuchang Chen, Jane Wenzhen Lu, Changqi Wu

Institutions: University of Reading, City University of Hong Kong, Shandong University

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $4,750