Advantages of indigenousness and firms from emerging economies

Lance Brouthers, Kennesaw State University
George Nakos, Clayton State University
Ted Randall, Saudi Arabian Oil Company


This paper develops and tests a new concept called the 'advantages of indigenousness' (AOI). The AOI concept suggests that: 1) local emerging economy firms can create defendable product markets based on specific advantages that stem from being an indigenous firm; 2) firms using these advantages have superior performance when compared to local firms that do not. Based on this new concept we generate and test three hypotheses on a sample of 382 Romanian domestic firms. Our findings show that companies emphasising their local connection by promoting the local manufacturing of their products, as well as the ones that utilise an umbrella branding strategy tend to have stronger performance. No support was found for a positive impact on performance by the employment of tight delivery schedules.