Liability Of Foreignness

1. Introduction
1.1 Background
Resulting from the globalisation and economic integration, an increasing number of individuals started to migrate to other countries and among of those people, a great number of people choose to engage in entrepreneurship after they have relocated and settled in the host country (Decker, A 2015). The Netherlands, among all the western countries, has become one of the most attractive countries for immigrants. According to Vermeulen & Penninx, (2000), immigration exceeded emigration in the Netherlands starting from the beginning of the 1960s. In Ruainovic’s immigration entrepreneurship study (2006), among all the immigrants, Chinese immigrant have been seen as the most active as entrepreneurs in comparison to

However, LoF is not new. Previous literature on the domain of international business has recognized the concept of liability of foreignness (Gaur, Kumar, and Sarathy, 2011), which was initially conceptualized by Hymer (1960/1976) as the costs of doing business abroad. (Gaur, Kumar, & Sarathy, 2011.) According to Hymer (1976), companies engaging in international business faced the additional costs of doing business abroad which however did not count for the local companies. Later, Zaheer reframed the concept of LOF, referring it to the additional operating costs of social and economic resources when the firms operate in foreign markets (Zaheer, 1995, p 342-343). Additionally, Eden and Miller (2004) pointed out other costs, including unfamiliarity, relational and discriminatory hazards which persist longer and often put foreign firms in a disadvantageous position as compared to domestic

A recent study showed that the decision to start their own firms can be seen as a result from a mental process where entrepreneurial cognition and perceptions are mental processes through which individuals evaluate and consider the decision to start firms (Mitchell et al. 2002b). In particular, Ajzen’s (1991) Theory of Planned Behaviour (TPB), has become one of the most widely-used theories in social psychology in general (Ajzen 2012).
EI literature from the psychological perspective mainly adopts the theory of Planned Behaviour to examine various factors that influence the entrepreneurial intention. TPB has been introduced by Ajzen and it claimed that any behaviour requires planning and can be predicted by the intention to adopt the behaviour (Ajzen, 1991). In the theory of Planned Behaviour, intention is a function of three antecedents. (As depicted