Research On The Country-of-origin Image From The Perspective Of Legitimacy Theory: Components, Mechanism And Enterprise’s Strategies

Chinese enterprises have done lots of efforts to enhance their competitiveadvantages in the global market. However, restricted by the negative “Made in china”image, Chinese enterprises face more suspicions and obstacles in the process ofinternationizition (Xu,2009; Zheng, Tang and Zhang,2002). There is still a long wayfor Chinese enterprises to compete with their stronger competitors from advancedcountries. How does the Country-of-origin Image (CoI) restrain the legitimacy ofChinese enterprises and their products? What can the international enterprises do tocope with the negative impact of their CoI and hence to improve the marketingperformance? Both of the two questions are of great significance to enterprises indeveloping countries, such as China.Through the literature review in the3domains of CoI, legitimacy and liability offoreignness, this research finds out that the extant literatures have still not have aconvinced conclusion of how the CoI is formed. In addition, extant explanation forCoI’s effect also lacks the relevance of the practices. The literature in the institutionaltheory can’t support our questions with good answer either. Most of the extantliteratures in enterprises’ legitimation strategies or actions have been used to copewith the liability of newness rather on liability of foreignness. Therefore, this researchwill draw on the theory of liability of foreignness and legitimacy spillover to explorethe relationship between CoI, enterprises legitimation actions and consumer support.Referring to Grewell’s (2003) sequential explanatory strategy, this researchconducts a grounded-theory study and3experiments and finally finds out that: CoI iscomposed of pragmatic image and social image; CoI is an essentially kind ofrecognitions and judgments of broad-scope legitimacy and will exert its impacts onconsumer support through the legitimacy spillover effect. Consumers would judgelegitimacy of one specific enterprise by its CoI and then decide whether give supportto the enterprise or not. In the condition of having negative CoI, enterprises can guardand increase their narrow-scope legitimacy through legitimation actions and therefore gain consumers’ support. However, the effect of the legitimation actions depends onthe type of negative CoI. When the CoI is negative in the pragmatic dimensions,institutional legitimating actions are more effective to gain consumer support than theperformative legitimating actions. While when the CoI is negative in the socialdimensions, performative legitimating actions are more effective.This paper comprises five parts of introduction, literature review, qualitive study,quantitive study and conclusion. The introduction part includes the1st chapter whichmainly clarifying the background and significance of this research as well as theresearch purpose and contains. Literature review comprises the2nd chapter, in whichwe review and analyze the extant literature such as CoI theory, legitimacy theory andtheory of liability of foreignness. Chapter3is the qualitive study. Chapter4and5consists of the quantitive studies. We conclude the results and management andpractice meaning. We also point out the limit in our research and make somesuggestions to future research.The outline of each chapter is as follow:Chapter1is introduction. It points out the practical background and theoreticalsignificance of the research, as well as clarifying the research topics and methods inthe study.Chapter2is literature review. We review the important literature at home andabroad that is related to the research topics such as Country-of-Origin Image,Country-of-Origin effect, institutional theory, legitimacy theory and the theory ofliability of foreignness.Chapter3is the grounded-theory study of the CoI. Based on the grounded theory,formation and effect mechanism of Country of Origin Image (COI) is built bycollecting and analyzing the comments and discussion about Chinese products orbrands both from American and Indian netizens. The conclusions show that CoI,which is composed of pragmatic image and social image, is an essentially kind ofrecognitions and judgments of broad-scope legitimacy and will exert its impacts onconsumer support through the legitimacy spillover effect. Chapter4is the quantitive study to explore and examine the legitimacy spillovereffect of CoI. Based on the theory of the liability of foreignness and legitimacyspillover, the study conducts an experiment and reveals that (1) CoI positively impactsthe enterprise’s legitimacy and hence positively influences the consumer support, and(2) the social CoI moderates the relationship between pragmatic CoI and consumersupport.Chapter5is the quantitive study to examine the role of enterprise’s legitimationaction. The conclusions of2experiments suggest that (1) in the condition of havingnegative CoI, enterprise can guard and increase their narrow-scope legitimacy throughlegitimation actions and therefore gain consumers’ support.(2) However, the effect ofthe legitimation actions depends on the type of negative CoI. When the CoI isnegative in the pragmatic dimension, institutional legitimating actions are moreeffective to gain consumer support than the performative legitimating actions. Whilewhen the CoI is negative in the social dimension, performative legitimating actionsare more effective.Chapter6is research conclusion, which concludes the whole research result andgives discussion. The chapter also states the shortcoming of the research and givessome suggestions for further research.In brief, this research firstly induces the legitimacy theory into the research onCoI to explore the relationship of enterprise’s CoI, legitmation actions and consumersupport. It contributes in several ways. First, it enriches and extends the knowledge ofCoI research from the perspective of legitimacy theory. Second, it furthers andenlarges the application of the legitimacy theory in marketing research from theperspective of internationalizational marketing.