Contesting a Place in the Sun: On Ideologies in Foreign Markets and Liabilities of Origin

Abstract

This paper explores the role of ideology in attempts to influence public policy and in business representation in the EU-China solar panel anti-dumping dispute. It exposes the dynamics of international activity by emerging-economy multinationals, in this case from China, and their interactions in a developed-country context (the EU). Theoretically, the study also sheds light on the recent notion of ‘liability of origin’, in addition to the traditional concept of ‘liability of foreignness’ explored in international business research, in relation to firms’ market and political strategies and their institutional embeddedness in home and host countries. Through a qualitative analysis of primary and secondary material and interview data with key protagonists, we provide a detailed evolution of the case, the key actors involved and their positions, arguments and strategies. This illustrates the complexities involved in the interaction between markets and ideologies in the midst of debates regarding different forms of subsidy regimes for renewable energy, free trade versus protectionist tendencies by governments, and the economic and sustainability objectives of firms and societies. The case shows how relative newcomers to the EU market responded to overcome a direct threat to their business and became, with support from their home government, active participants in the public debate through interactions with local commercial partners and non-governmental organisations. Firms adopted relatively sophisticated strategies to reduce their liabilities vis-à-vis host-country institutions and local stakeholders, including collective action, to increase their legitimacy and reputation, and counter ideologically-based attacks. We also discuss implications and limitations.

Keywords: Sustainability; Multinationals; Liability of Foreignness; Liability of Origin; China; EU; Solar panels; Trade policy

JEL Classification: D21, F02, F13, F23, F42, H77, K21, K33, L11, L21, L23, L68, L81, M14, O38, O52, P33, Q42, Q48, R38