Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-28T17:13:16.496Z Has data issue: false hasContentIssue false
  • English
  • Français

Liability of Foreignness in Historical Context: German Business in Preindependence India (1880–1940)

Published online by Cambridge University Press:  02 July 2015

Christina Lubinski
Christina Lubinski*
Affiliation:
Centre for Business History, Department for Management, Politics and Philosophy, Copenhagen Business School, Porcelænshaven 18A, 2000 Frederiksberg, Denmark. E-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

Much of international business literature has dealt with the costs of engaging in business abroad. Recently, several authors have called into question the basic assumptions of the “liability of foreignness” argument. They plead for a more nuanced look at nationality beyond the dichotomy of foreign vis-à-vis local firms and raise doubts about the assumption that more distance necessarily translates into higher costs. This article adds to this criticism with a historical analysis of German multinational enterprises in preindependence India. The case proves (1) the relevance of specific nationalities, (2) the importance of conflicting host and home country attitudes for understanding multinationals’ strategy, and (3) the possibility of spillover effects across national borders. Expanding on existing theory, the article makes a point in showing how malleable and contextual associations with nationality are, thus making a thorough historical analysis of commercial, political, and cultural links between host and home country indispensable.

Type
Manuscript
Information
Enterprise & Society , Volume 15 , Issue 4 , December 2014 , pp. 722 - 758
Copyright
© The Author 2014. Published by Oxford University Press on behalf of the Business History Conference. All rights reserved. For permissions, please e-mail: [email protected]

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This paper has benefitted greatly from discussions with the participants of a 2014 research seminar at the German Historical Institute in Washington, DC and of a session at the Business History Conference 2014 in Frankfurt. I am deeply indebted to Christine Strotmann for her research assistance, Jessica Csoma, Jeffrey Fear, Jan Logemann, Corinna Ludwig, and Atiba Pertilla for helpful comments on earlier drafts. My special thanks go to Rüdiger Borstel of Bayer and Frank Wittendorfer of Siemens for their support and kindness. The pictures are courtesy of Bayer Corporate Archives and Siemens Corporate Archives. All copyrights held by the owners.

References

Bibliography of Works Cited

Books

Aalders, Gerard Wiebes, Cees. The Art of Cloaking Ownership: The Secret Collaboration and Protection of the German War Industry by the Neutrals: The Case of Sweden.Amsterdam, the Netherlands: Amsterdam University Press, 1996.Google Scholar
Arnold, David. Everyday Technology: Machines and the Making of India’s Modernity.Chicago, IL: The University of Chicago Press, 2013.Google Scholar
Arrighi, Giovanni. The Long Twentieth Century: Money, Power, and the Origins of Our Times.London: Verso, 1994.Google Scholar
Baruwā, Niroda Kumāra. Chatto: The Life and Times of an Indian Anti-Imperialist in Europe.New Delhi, India: Cambridge University Press, 2004.Google Scholar
Bayer. Geschichte und Entwicklung der Farbenfabriken vorm. Friedr. Bayer & Co. Elberfeld in den ersten 50 Jahren.Munich, Germany: Meisenbach Riffarth & Co., 1918.Google Scholar
Bernhardi, Friedrich von. Germany and the Next War.New York: Longmans, Green & Co., 1914.Google Scholar
Birla, Ritu. Stages of Capital: Law, Culture, and Market Governance in Late Colonial India.Durham, NC: Duke University Press, 2009.Google Scholar
Bose, Sugata. His Majesty’s Opponent: Subhas Chandra Bose and India’s Struggle Against Empire.Cambridge, MA: Belknap Press of Harvard University Press, 2011.Google Scholar
Bühlmann, Elisabeth. La Ligne Siemens: La Construction du Télégraphe Indo-Européen, 1867–1870.Bern, Switzerland: Peter Lang, 1999.Google Scholar
Chandler, Alfred D. Scale and Scope: The Dynamics of Industrial Capitalism.Cambridge, MA: Belknap Press of Harvard University Press, 1990.Google Scholar
Cox, Howard. The Global Cigarette: Origins and Evolution of British American Tobacco, 1880–1945.New York: Cambridge University Press, 2000.Google Scholar
Curtis, Lioneland Great Britain Parliament. Joint Select Committee on the Government of India Bill. Papers Relating to the Application of the Principle of Dyarchy to the Government of India.Oxford: Clarendon Press, 1920.Google Scholar
Dejung, Christof. Die Fäden des globalen Marktes: Eine Sozial- und Kulturgeschichte des Welthandels am Beispiel der Handelsfirma Gebrüder Volkart 1851–1999.Köln, Germany: Böhlau, 2013.Google Scholar
Department of Commerce, and Baker, Henry D.. Special Consular Report No. 72: British India With Notes on Ceylon, Afghanistan and Tibet.Washington, DC: Government Printing Office, 1915.Google Scholar
Domosh, Mona. American Commodities in an Age of Empire.New York: Routledge, 2006.Google Scholar
Feldenkirchen, Wilfried. Siemens, 1918–1945.Columbus: Ohio State University Press, 1999.Google Scholar
Feldenkirchen, Wilfried. Werner von Siemens: Inventor and International Entrepreneur.Columbus: Ohio State University Press, 1994.Google Scholar
Framke, Maria. Delhi - Rom - Berlin: Die indische Wahrnehmung von Faschismus und Nationalsozialismus 1922 – 1939.Darmstadt, Germany: Wissenschaftliche Buchgesellschaft, 2012.Google Scholar
Gauba, Khalid Latif. The Rebel Minister: The Story of the Rise and Fall of Lala Harkishan Lal.Lahore, India: Premier Publishing House, 1938.Google Scholar
Gordon, A. D. D. Businessmen and Politics: Rising Nationalism and a Modernising Economy in Bombay, 1918–1933.New Delhi, India: Manohar, 1978.Google Scholar
Government of India Legislative Department. Legislation and Orders Relating to the War.3rd ed. Delhi, India: Superintendent Government Printing, India, 1915.Google Scholar
Great Britain. Foreign Office. Handbook of Commercial Treaties, etc., With Foreign Powers.4th ed. London: His Majesty’s Stationery Office, 1931.Google Scholar
Hayes, Peter. Industry and Ideology: IG Farben in the Nazi Era.Cambridge, UK: Cambridge University Press, 1987.Google Scholar
Hayes, Romain. Subhas Chandra Bose in Nazi Germany: Politics, Intelligence and Propaganda, 1941–43.New York: Columbia University Press, 2011.Google Scholar
Hitler, Adolf. My Struggle.London: Hurst & Blackett, 1938 (English translation first published in 1933, German Original 1926).Google Scholar
Hoffman, Ross J. S. Great Britain and the German Trade Rivalry, 1875–1914.New York: Russell & Russell, 1964.Google Scholar
Hoffmann, Wiebke. Auswandern und Zurückkehren: Kaufmannsfamilien zwischen Bremen und Übersee: eine Mikrostudie, 1860–1930.Münster, Germany: Waxmann, 2009.Google Scholar
Hymer, Stephen. The International Operations of National Firms: A Study of Direct Foreign Investment.Cambridge, MA: MIT Press, 1976.Google Scholar
Jacobsen, Hans Adolf. Nationalsozialistische Aussenpolitik, 1933–1938.Frankfurt, Main, Germany: A. Metzner, 1968.Google Scholar
Jones, Geoffrey. Multinationals and Global Capitalism: From the Nineteenth to the Twenty-First Century.Oxford: Cambridge University Press, 2005.Google Scholar
Kaminsky, Arnold P. The India Office, 1880–1910.New York: Greenwood Press, 1986.Google Scholar
Koop, Volker. Hitlers Fünfte Kolonne: Die Auslands-Organisation der NSDAP.Berlin, Germany: Be. bra, 2009.Google Scholar
Kuhlmann, Jan Das, Christel. Netaji in Europe.New Delhi, India: Rainlight, 2012.Google Scholar
Kühns, Carl Wilhelm. Meine 800: Heimkehr aus Ahmednagar.Hannover, Germany: Niederdeutsche Zeitung, 1934.Google Scholar
Lohmann, Heinrich C. Die Ausfuhr Solinger Stahlwaren nach Britisch-Indien, Burma und Ceylon.Würzburg, Germany: Mayr, 1934.Google Scholar
Lührs, Wilhelm der Freien Hansestadt Bremen, Staatsarchiv zu Bremen, Historische Gesellschaft. Bremische Biographie 1912–1962.Bremen, Germany: Hauschild, 1969.Google Scholar
Manjapra, Kris. Age of Entanglement: German and Indian Intellectuals across Empire.Cambridge, MA: Harvard University Press, 2014.Google Scholar
Manz, Stefan. Constructing a German Diaspora: The “Greater German Empire,” 1871–1914.New York: Routledge, 2014.Google Scholar
Markovits, Claude. Indian Business and Nationalist Politics, 1931–1939: The Indigenous Capitalist Class and the Rise of the Congress Party.Cambridge, UK: Cambridge University Press, 1985.Google Scholar
McDonough, Frank. Neville Chamberlain, Appeasement, and the British Road to War.Manchester, UK: Manchester University Press, 1998.Google Scholar
McKale, Donald M. The Swastika Outside Germany.Kent, OH: Kent State University Press, 1977.Google Scholar
Mintz, Sidney W. Sweetness and Power: The Place of Sugar in Modern History.New York: Penguin Books, 1986.Google Scholar
Misra, Maria. Business, Race, and Politics in British India, c.1850–1960.Oxford: Clarendon Press, 1999.Google Scholar
Mittal, Satish Chandra. Freedom Movement in Punjab, 1905–29.Delhi, India: Concept Pub. Co., 1977.Google Scholar
Modig, Hans. Swedish Match Interests in British India During the Interwar Years.Stockholm, Sweden: LiberFörlag, 1979.Google Scholar
Muldoon, Andrew. Empire, Politics and the Creation of the 1935 India Act: Last Act of the Raj.Farnham, UK: Ashgate, 2009.Google Scholar
Plumpe, Gottfried. Die I.G. Farbenindustrie AG: Wirtschaft, Technik und Politik 1904–1945.Berlin, Germany: Duncker & Humblot, 1990.Google Scholar
Probst, Hans Georg. Unter indischer Sonne: 19 Monate englischer Kriegsgefangenschaft in Ahmednagar.Herborn, Germany: Oranien Verlag, 1917.Google Scholar
Reader, W. J. Imperial Chemical Industries: A History. Vol. 2.London: Cambridge University Press, 1970.Google Scholar
Reithinger, Anton. Das wirtschaftliche Gesicht Europas.Stuttgart, Germany: Deutsche Verlags-Anstalt, 1936.Google Scholar
Roy, Tirthankar. The Economic History of India, 1857–1947.3rd ed. New Delhi, India: Cambridge University Press, 2006.Google Scholar
Russel, Louis P. The Indian Companies’ Act, VI. of 1882.Bombay, India: Byculla, 1885.Google Scholar
Sarkar, Sumit. The Swadeshi Movement in Bengal, 1903–1908.New Delhi, India: People’s Pub. House, 1973.Google Scholar
Scott, John D. Siemens Brothers, 1858–1958: An Essay in the History of Industry.London: Weidenfeld and Nicolson, 1958.Google Scholar
Tooze, J. Adam. The Wages of Destruction: The Making and Breaking of the Nazi Economy.1st US ed. New York: Viking, 2007.Google Scholar
Trautmann, Thomas R. Aryans and British India.Berkeley: University of California Press, 1997.Google Scholar
United States Tariff Commission. Census of Dyes and Other Synthetic Organic Chemicals 1926.Washington, DC: Government Printing Office, 1927.Google Scholar
Weiher, Sigfrid von. Die englischen Siemens-Werke und das Siemens-Überseegeschäft in der zweiten Hälfte des 19. Jahrhunderts.Berlin, Germany: Duncker & Humblot, 1990.Google Scholar
Wilkins, Mira. The History of Foreign Investment in the United States, 1914–1945.Cambridge, MA: Harvard University Press, 2004.Google Scholar
Wolpert, Stanley A. Tilak and Gokhale: Revolution and Reform in the Making of Modern India.Berkeley: University of California Press, 1962.Google Scholar
Zangger, Andreas. Koloniale Schweiz: Ein Stück Globalgeschichte zwischen Europa und Südostasien (1860–1930).Bielefeld, Germany: Transcript Verlag, 2011.Google Scholar
Zöllner, Hans-Bernd. Birma zwischen “Unabhaängigkeit zuerst, Unabhaängigkeit zuletzt:” Die birmanische Unabhaängigkeitsbewegungen und ihre Sicht der zeitgenoässischen Welt am Beispiel der birmanisch-deutschen Beziehungen zwischen 1920 und 1948.Münster, Germany: LIT, 2000.Google Scholar

Articles and Essays

Bhagavan, Manu.“The Rebel Academy: Modernity and the Movement for a University in Princely Baroda, 1908–49.” Journal of Asian Studies 61, no. 3 (2002): 919–47.Google Scholar
Bilkey, Warren J. Nes, Erik.“Country-of-Origin Effects on Product Evaluations.” Journal of International Business Studies 13, no. 1 (1982): 89–99.Google Scholar
Deephouse, David L. Suchman, Mark C..“Legitimacy in Organizational Institutionalism.” In The SAGE Handbook of Organizational Institutionalism, edited by Greenwood, Royston, 49–77.Los Angeles, CA; London: SAGE, 2008.Google Scholar
Dejung, Christof Zangger, Andreas.“British Wartime Protectionism and Swiss Trading Companies in Asia during the First World War.” Past & Present 207, no. 1 (2010): 181–213.Google Scholar
Eden, Lorraine Miller, Stewart R..“Distance Matters: Liability of Foreignness, Institutional Distance and Ownership Strategy.” In Theories of the Multinational Enterprise: Diversity, Complexity and Relevance, edited by Hitt, Michael A. Cheng, Joseph L. C., 187–221.Bingley, UK: Emerald Group Publishing Limited, 2004.Google Scholar
Fraser, Thomas G.“Germany and Indian Revolution, 1914–18.” Journal of Contemporary History 12, no. 2 (1977): 255–72.Google Scholar
Gaur, Ajai Kumar, Vikas Sarathy, Ravi.“Liability of Foreignness and Internationalization of Emerging Market Firms.” In Dynamics of Globalization: Location-specific Advantages or Liabilities of Foreignness? (Advances in International Management), edited by Tihanyi, Laszlo Pedersen, Torben Devinney, Timothy M., vol. 24, 211–33.New York: Emerald, 2011.Google Scholar
Jolly, Julius.“Eine Reise nach Ostindien. IV. Calcutta.” Deutsche Rundschau 40, no. 10 (1884): 107–27.Google Scholar
Jones, Geoffrey Lubinski, Christina.“Managing Political Risk in Global Business: Beiersdorf 1914–1990.” Enterprise & Society 13, no. 1 (2012): 85–119.Google Scholar
Jones, Geoffrey Schröter, Harm G.eds. The Rise of Multinationals in Continental Europe.Aldershot, UK: E. Elgar, 1993.Google Scholar
Kobrak, Christopher Wüstenhagen, Jana.“International Investment and Nazi Politics: The Cloaking of German Assets Abroad: 1936–1945.” Business History 48, no. 3 (2006): 399–427.Google Scholar
Kobrak, Christopher Hansen, Per H.eds. European Business, Dictatorship, and Political Risk, 1920–1945.New York: Berghahn Books, 2004.Google Scholar
Kostova, Tatiana Zaheer, Srilata.“Organizational Legitimacy Under Conditions of Complexity: The Case of the Multinational Enterprise.” Academy of Management Review 24, no. 1 (1999): 64–81.Google Scholar
Kreutzmüller, Christoph.“Augen im Sturm? Ausländische Zeitungsberichte über die Judenverfolgung in Berlin 1918–1938.” Zeitschrift für Geschichtswissenschaft 62, no. 1 (2014): 25–48.Google Scholar
Lipartito, Ken.“Connecting the Cultural and the Material in Business History.” Enterprise & Society 14, no. 4 (2013): 686–704.Google Scholar
Meyer, John W. Rowan, Brian.“Institutionalized Organizations: Formal Structure as Myth and Ceremony.” American Journal of Sociology 83, no. 2 (1977): 340–63.Google Scholar
Moore, Robin J.“Imperial India, 1858–1914.” In History of the British Empire. Vol III: The Nineteenth Century, edited by Porter, Andrew, 422–46.Oxford: Cambridge University Press, 2001.Google Scholar
Mutz, Mathias.“Going Global-Acting Local: Siemens in the Chinese Electrical Market, 1904–1937.” Essays in Economic & Business History 29, no. 1 (2011): 5–22.Google Scholar
O’Grady, Shawna Lane, Henry W..“The Psychic Distance Paradox.” Journal of International Business Studies 27, no. 2 (1996): 309–33.Google Scholar
Raina, Dhruv Habib, S. Irfan.“Technical Institutes in Colonial India Kala Bhavan, Baroda (1890–1990).” Economic and Political Weekly 26, no. 46 (1991): 2619–21.Google Scholar
Roy, Tirthankar.“Economic History and Modern India: Redefining the Link.” The Journal of Economic Perspectives 16, no. 3 (2002): 109–30.Google Scholar
Schwanitz, Wolfgang G.“Max von Oppenheim und der Heilige Krieg: Zwei Denkschriften zur Revolutionierung islamischer Gebiete 1914 und 1940.” SozialGeschichte 19, no. 3 (2004): 28–59.Google Scholar
Sinha, Mrinalini.“Britishness, Clubbability, and the Colonial Public Sphere: The Genealogy of an Imperial Institution in Colonial India.” Journal of British Studies 40, no. 4 (2001): 489–521.Google Scholar
Stevens, Charles E. Shenkar, Oded.“The Liability of Home: Institutional Friction and Firm Disadvantage Abroad.” In Institutional Theory in International Business and Management, edited by Tihanyi, Laszlo Devinney, Timothy M. Pedersen, Torben, 127–48.Bingley, UK: Emerald Group Publishing Limited, 2012.Google Scholar
Suchman, Mark C.“Managing Legitimacy: Strategic and Institutional Approaches.” Academy of Management Review 20, no. 3 (1995): 571–610.Google Scholar
Tripathi, Dwijendra.“The Parsis.” In Business Communities of India: A Historical Perspective, edited by Tripathi, Dwijendra, 34–51.New Delhi, India: Manohar, 1984.Google Scholar
Verlegh, Peeter W. J. Steenkamp, Jan-Benedict E. M..“A Review and Meta-Analysis of Country-of-Origin Research.” Journal of Economic Psychology 20, no. 5 (1999): 521–46.Google Scholar
Voigt, Johannes H.“Hitler und Indien.” Vierteljahrshefte für Zeitgeschichte 19, no. 1 (1971): 33–63.Google Scholar
Yacob, Shakila.“Trans-Generational Renewal as Managerial Succession: The Behn Meyer Story (1840–2000).” Business History 54, no. 7 (2012): 1166–85.Google Scholar
Zaheer, Srilata.“Overcoming the Liability of Foreignness.” Academy of Management Journal 38, no. 2 (1995): 341–63.Google Scholar
Zucker, Lynne G.“The Role of Institutionalization in Cultural Persistence.” American Journal of Sociology 42, no. 5, (1977): 726–43.Google Scholar

Unpublished Materials

Ramnath, Aparajith.“Extra-Imperial Influences in Indian Industrialisation: The Technical Experts of the Tata Steel Works, c.1900–1940.” Paper Presented at the World Business History Conference, Frankfurt, Germany, March 16–17, 2014.Google Scholar

Archival Sources

City Archive Munich (Stadtarchiv München). Registration Office Files [Einwohnermeldekartei].Google Scholar
Corporate Archives Bayer (BA), Leverkusen, Germany.Google Scholar
Corporate Archives Siemens (SAA), Munich, Germany.Google Scholar
German Federal Archives (Bundesarchiv, or BArch), Berlin, Germany.Google Scholar
German Foreign Office (Politisches Archiv Auswärtiges Amt, hereafter, PA), Berlin, Germany.Google Scholar
India Office Records and Private Papers (IOR), British Library, London.Google Scholar
University Archive Munich (Universitätsarchiv München). Student Registry [Studentenkartei].Google Scholar
US National Archives and Record Administration (NARA), College Park, MD.Google Scholar
West Bengal State Archives (WBSA), Kolkata, India.Google Scholar