62 Journal of International MarketingConsumer Animosity, C.docx

62 Journal of International Marketing
Consumer Animosity, Country of
Origin, and Foreign Entry-Mode
Choice: A Cross-Country
Investigation
Cher-Min Fong, Chun-Ling Lee, and Yunzhou Du
ABSTRACT
Drawing on the perspective of country of origin, this study
provides evidence regarding how entry-mode choice and
postentry branding strategy affect foreign product purchase
intentions in an animosity context. The authors conduct
two studies in two host country markets, one with high
animosity (China) and the other with low animosity (Taiwan)
toward a target country (Japan). The results of Study 1 reveal
that in a high-animosity host country, consumers prefer
the foreign products launched through an acquisition joint
venture to those that are imports or the derivatives of full
acquisition. The findings of Study 2 indicate that in a high-
animosity host country, consumers prefer the foreign prod-
ucts launched through an acquisition joint venture mode that
adopts a local brand or a local-foreign cobrand to one
that adopts a foreign-local cobrand. In contrast, in a low-
animosity host country, entry modes and postentry branding
strategies have no effect on foreign product purchase intentions.
Keywords: consumer animosity, country of origin, foreign entry
mode, country of brand, country of ownership
I
n the years since Klein, Ettenson, and Morris (1998)

published their pioneering study, an extensive body of
research on the effects of consumer animosity on the
purchase of foreign products has emerged in the inter-
national marketing and business literature streams. The
central argument of consumer animosity research is that
consumers resist purchasing foreign goods because their
hostile attitudes toward a particular country exceed
their product quality judgments (Klein 2002; Klein and
Ettenson 1999; Klein, Ettenson, and Morris 1998).
Although these studies have enriched the field’s under-
standing of consumer animosity and its effects on the
purchase of foreign products, they provide limited
insight into a critical and fundamental decision: the
entry mode a foreign firm should adopt when launch-
ing products in a host country with significant animos-
ity toward the firm’s home country.Prior research has
regarded the relationship between the United States and
China as hostile (Ishii 2009). Consider the consumer
responses toward the products in the following real
case:
U.S.-based General Motors has recently formed an
international joint venture (IJV) in China with
FAW Group, China’s second-largest automaker, to
design, manufacture, and market products locally.
In addition, the United States–China IJV will adopt
a cobrand, FAW-GM, in the Chinese market.
Cher-Min Fong is Associate Professor, Department of Business
Man-
agement, National Sun Yat-sen University (e-mail:
[email protected]
nsysu.edu.tw). Chun-Ling Lee is a postdoctoral researcher (e-
mail:

[email protected]). Yunzhou Du is Associate Professor,
School of Business Administration, Anhui University of Finance
&
Economics (e-mail: [email protected]). The authors thank
three anonymous JIM reviewers for their helpful and
constructive
comments. They are also grateful for the financial support
provided
by the National Science Council in Taiwan (NSC 98-2410-H-
110-
028-MY3). Bulent Menguc served as associate editor for this
article.
Journal of International Marketing
©2014, American Marketing Association
Vol. 22, No. 1, 2014, pp. 62–76
ISSN 1069-0031X (print) 1547-7215 (electronic)
Consumer Animosity 63
Although this practice is typical in global markets when
a foreign firm decides to launch products in a host mar-
ket, the topic has not been explored in the animosity lit-
erature stream. Previous animosity research has studied
cases in which foreign products are manufactured and
imported from countries that are offensive to the focal
host countries (e.g., Hong and Kang 2006; Jiménez and
Martín 2010; Klein 2002; Klein and Ettenson 1999;
Klein, Ettenson, and Morris 1998; Leong et al. 2008;
Russell and Russell 2006). However, this literature
stream has ignored other entry modes that are widely
used in international marketing practices—particularly
those that occur through foreign direct investments
(FDIs), such as IJVs with local firms and acquisitions of

local targets. We find that the “foreign products” in FDI
cases are significantly different from those studied in
prior animosity research. Because FDIs have become an
important international market entry and expansion
strategy, ignorance of entry modes involving FDIs may
limit our understanding of the effects of consumer ani-
mosity on international market success.
The current study addresses this unexplored issue by
examining consumer responses toward varying entry
modes and branding strategies in an animosity context.
Drawing on the country-of-origin (COO) perspective,
we suggest that a foreign firm’s FDI subsidiary is associ-
ated with two COOs: those of its home and host coun-
tries. We posit that the different entry modes and brand-
ing strategies that a foreign entrant adopts will result in
different perceived host and foreign identities for its sub-
sidiary in the host country. The rationale for this
research is that an animosity-evoking foreign firm can
adjust its subsidiary’s COO perceptions to mitigate
negative consumer emotions and social pressures in the
host country by adopting appropriate entry modes and
branding strategies.
We conducted studies in two host country markets, one
with significant animosity toward a particular country
and the other with low animosity. Specifically, we inves-
tigate the following unexplored research questions:
First, do consumers in one host country exhibit a higher
average hostile attitude and lower average purchase
intention toward products from the target country when
compared with consumers in other host countries? Sec-
ond, drawing on a cross-country study, we investigate
whether the foreign products launched through FDI
entry modes (full acquisitions and acquisition joint ven-
tures [AJVs]) in a host country market with high ani-

mosity gain more consumer acceptance than imported
products, which prior animosity research has typically
studied. Third, in an animosity context, does an AJV
product (i.e., a product launched through an AJV mode)
that adopts a brand strategy with a more salient host
identity (and a less salient foreign identity) win more
consumer acceptance than one that adopts a branding
strategy with a less salient host identity (and a more
salient foreign identity)? We assume an identical con-
sumer response among various entry modes and AJV
branding strategies for the host market with lower ani-
mosity, which is the contrast group for this research.
STUDY POSITIONING: ANIMOSITY,
POLITICAL ATTITUDES, AND COUNTRY-
INDUCED BIASES
This study adopts a COO perspective to address the
unexplored issue of entry mode choice in an animosity
context. Because consumer animosity indicates the hos-
tility of consumers toward the national origin of a prod-
uct, it has been regarded as a COO-related construct
(Jiménez and San Martín 2010). Substantial research
has documented the COO effect on consumer quality
evaluations and purchase intentions (Koschate-Fischer,
Diamantopoulos, and Oldenkotte 2012; Tse and Gorn
1993). In addition to contributing to cognitive rational
evaluations of product quality, the COO is an affective
and a normative mechanism that shapes consumer atti-
tudes and behavior (Obermiller and Spangenberg 1989;
Verlegh and Steenkamp 1999). The COO relates a prod-
uct or brand to a national or ethnic identity with sym-
bolic and emotional meaning to consumers (Herz and
Diamantopoulos 2013; Verlegh and Steenkamp 1999).
These non-quality-based effects of COO, identified as
country-induced biases, may positively or negatively

affect consumers’ purchase intentions of domestic and
foreign products (Josiassen 2011). Researchers have
indicated that consumer political attitudes are the
critical factors that lead to these country-induced, non-
quality-based biases (Balabanis et al. 2001). The inter-
national marketing literature stream has indicated two
types of political attitudes to be determinants of con-
sumer attitudes and behavior: (1) national in-group
identification and favoritism and (2) a country’s hos-
tility toward another country. Although these political
attitudes may be related, they have distinct causes, con-
sequences, and marketing implications.
National identification, which refers to the feeling that
people identify with their national group, plays a central
role in the first type of political attitude (Verkuyten
2001). According to social identity theory, national in-
group identification has strong implications for a per-
son’s self-concept and self-esteem; as such, it motivates
the favorable distinctiveness of an in-group relative to
an out-group (Tajfel and Turner 1986; Verkuyten 2001).
Therefore, there is a positive correlation between
national identification and national in-group favoritism
(Brown et al. 1986). National identification can result in
patriotism, which refers to feelings of attachment,
belonging, and loyalty to one’s own national in-group,
without out-group evaluations (Balabanis et al. 2001;
Mummendey, Klink, and Brown 2001). However, social
identity theory argues that in-group favoritism may be
accompanied by rejection of other groups (Verkuyten
2001; Verkuyten and Yildiz 2007). Specifically, national

identification can take the form of nationalism or blind
patriotism, which is the sense that one’s national group
is superior and should be dominant; it thus implies the
derogation of other nations (Druckman 1994; Mum-
mendey, Klink, and Brown 2001). In addition to nation-
alism and patriotism, internationalism refers to positive
feelings for other nations and their peoples and is
another independent dimension of nationalistic feeling
(Balabanis et al. 2001). Prior research has suggested that
internationalism can mitigate the effect of national iden-
tification (Rawwas, Rajendran, and Wuehrer 1996).
Political attitudes may translate into economic prefer-
ences (Balabanis et al. 2001). Researchers argue that
nationalistic feeling can lead to consumer ethnocentrism,
which in turn shapes consumers’ positive or negative dis-
positions toward domestic or foreign products (Balaba-
nis et al. 2001; Ishii 2009). Ethnocentric tendencies play
a critical role when consumers consider that imports
threaten either their personal or their national well-being
(Klein, Ettenson, and Morris 1998; Shimp and Sharma
1987). National identification, in the sense of either
nationalism or patriotism, is positively associated with
consumer ethnocentrism (Balabanis et al. 2001). In con-
trast, researchers have indicated that internationalism,
which can reduce national identification, is negatively
correlated with consumer ethnocentrism (Balabanis et al.
2001). For international marketers, consumer ethnocen-
trism represents the competitive disadvantage of foreign
products when they compete with domestic ones.
Animosity represents the second type of political atti-
tude. Consumer animosity has been defined as “rem-
nants of antipathy related to previous or ongoing mili-
tary, political, or economic events which affect
consumer purchase behavior in the international mar-

ketplace” (Klein, Ettenson, and Morris 1998, p. 90). It
differs from the aforementioned constructs in the follow-
ing three ways. First, animosity is a bilateral, country-
specific construct. In other words, people in one country
hold hostile attitudes toward another country rather
than to all foreign countries. Second, animosity is, in
general, an event-specific construct. For example, the
Nanjing Massacre led to Chinese animosity toward
Japan (Klein, Ettenson, and Morris 1998), and the
Japanese attack on Pearl Harbor caused the United
States’ hostility toward Japan (Klein 2002). Third, ani-
mosity has no quality implications for domestic and for-
eign products. Unlike consumer ethnocentrism, which
implies that the quality of the foreign product is inferior,
consumer animosity refers to consumer resistance to the
purchase of foreign products because of social pressures
and fears of negative psychosocial consequences (Amine
2008; Klein, Ettenson, and Morris 1998).
Because of these distinct characteristics, animosity leads to
more serious consequences than does ethnocentrism. As
we have argued, international marketers may suffer from
a competitive disadvantage when competing with their
domestic counterparts in a host country with significant
consumer ethnocentrism stemming from nationalism or
patriotism. However, a firm from an animosity-evoking
country suffers from competitive disadvantages when it
competes with both domestic and other foreign competi-
tors. In other words, consumer animosity becomes a
country-specific disadvantage and an entry barrier for
marketers from an offensive country; it also offers a sig-
nificant marketing opportunity for other foreign mar-
keters (Klein and Ettenson 1999). Therefore, a critical
task for international marketers faced with animosity is
to mitigate the negative impact of consumer animosity.

In the international marketing literature, prior research
has mainly focused on the effect of animosity on con-
sumer purchase decisions; the method that marketers use
to cope with the negative impact of animosity remains
unexplored. As such, this article’s major contribution is
its proposal of a strategy that international marketers can
adopt to deal with animosity. Herein, we propose that the
choice of an appropriate entry mode and branding
strategy can reduce host country consumers’ hostile feel-
ings and enhance their purchase intentions. Drawing on a
COO perspective, we suggest that an entry mode and
brand strategy that decrease the offensive country’s iden-
tity (foreign identity) and increase the host country’s iden-
tity (host identity) can mitigate consumer hostility and
win better consumer responses. Therefore, our pioneering
research on the strategy to adopt in an animosity context
can have important theoretical and practical implications
for international marketing.
THEORETICAL BACKGROUND AND
HYPOTHESES
Consumer Animosity and COO
Animosity is a COO-related construct that emphasizes
hostile consumer attitudes toward the national origin of
a product or a brand (Jiménez and San Martín 2010).
Researchers have categorized consumer animosity into
“situational” and “stable” (Amine, Chao, and Arnold
2005; Ang et al. 2004). Situational animosity arises
from current economic and political events. When the
impact of events is reduced, consumers’ hostile attitudes
toward the offending country might decrease (Ang et al.

2004). In the present research, we focus on stable ani-
mosity because of its long-term impact on foreign mar-
ket performance. Stable animosity is a result of difficult
historical relations between two countries. Such a hos-
tile attitude toward an offensive country can sustain
from one generation to the next (Amine 2008; Ang et al.
2004) and become an affective mechanism of the COO.
In other words, the hostility toward a particular country
gains emotional value in the host country’s society. This
value may further affect consumers’ purchase intentions
toward products from the offending country. That is,
the COO reflects a normative mechanism in a host
country society in which buying products from the
offending country violates social norms. In the animos-
ity context, social pressures and fears of psychosocial
consequences may contribute to consumer reluctance to
buy products from an offending country (Amine 2008).
The social pressure may exceed consumer cognition that
the offending country produces high-quality products
(Amine 2008; Klein, Ettenson, and Morris 1998). We
contend that compared with a typical host country with
low animosity, in a host country with high animosity
toward a particular offending country, consumers will
exhibit greater reluctance to buy products from the tar-
get country, regardless of product quality judgments.
H1: Compared with consumers in a host country
with low animosity, consumers in a host coun-
try with high animosity toward a particular
country have lower intentions to buy products
from the target country, irrespective of prod-
uct quality judgment.
Consumer Animosity, National Identity, and
Foreign Entry Mode

Researchers have studied consumer responses toward
hybrid products, those associated with more than one
country (Chao 2001). According to Chao (2001, p. 69),
whenever two objects of judgment are paired, each
product has a tendency to shift toward congruence with
the evaluation of the other, with the magnitude of the
shift being inversely proportional to the relative intensi-
ties of the interacting evaluations. We extend this argu-
ment to the COO identity of a foreign firm’s postentry
subsidiary, the company that launches products in a
host country. A foreign FDI subsidiary can be associated
with two COOs: that of the host country and that of the
foreign firm’s home country. We employ the national
identity of a foreign subsidiary as a construct to measure
the relative impacts of host and foreign country identi-
ties on the subsidiary and its products.
In this article, we define the host identity (vs. foreign
identity) as the degree of association between a foreign
firm’s postentry subsidiary and the host country as
reflected in the dimensions of ownership, the location of
business activities (e.g., manufacture), and the sub-
sidiary branding strategy. We suggest that the different
entry modes and postentry branding strategies that a
foreign entrant can adopt will result in varying degrees
of host and foreign identities for its subsidiaries in the
host country. The central argument is that a foreign firm
from an animosity-evoking country may adopt entry
mode and postentry branding strategies that can
enhance host identity and mitigate the foreign identity
associated with a hostile country to reduce the negative
affective and normative COO effects on foreign product
purchase.
Import and Acquisition Entry Modes

Prior animosity research has typically used importing as
the entry mode because, in general, importing has a single
national identity associated with a particular target coun-
try. The negative affective process stemming from a hos-
tile national identity leads to a social norm of reluctance
to purchase products imported from the target country.
Prior research has provided ample evidence for this phe-
nomenon (Riefler and Diamantopoulos 2007). However,
entry modes involving FDIs in the host country may result
in hybrid COOs that associate the host country and the
home country of the foreign entrant. In this article, we
focus on entry through acquisitions.
An acquisition entry refers to a foreign firm’s entry into
a host country market by acquiring the equity of an
existing local target. Cross-border acquisition has
become a major mode of entry for a foreign firm into a
host country (Brouthers and Brouthers 2000; Harzing
2002). The acquisition entry mode enables a foreign
entrant to access the necessary resources and capabilities
of the local market that are difficult to develop inter-
nally and to accelerate its entry speed (Chen and Hen-
nart 2004). In other words, compared with import, by
acquiring the local target, the foreign entrant can rede-
ploy the target’s local business activities and assets, thus
resulting in a higher degree of host identity. For exam-
ple, the foreign acquirer can use the target’s existing
manufacturing utilities, employees, marketing channels,
distribution systems, and, if necessary, its brand. Com-
pared with import entry, acquisition entry perceived to

have a higher degree of host identity may reduce the for-
eign entrant’s home country identity. In an animosity
context, this tactic can thus mitigate negative host coun-
try consumer emotions and social pressures to buy prod-
ucts from an animosity-evoking foreign firm. In con-
trast, consumers in a typical host country with low
animosity toward the target country may be less con-
cerned with the national identity of the foreign sub-
sidiary and thus less affected by the entry modes associ-
ated with different host and foreign identities.
H2: Consumer animosity moderates the effect of
import entry and acquisition entry on con-
sumer purchase intentions toward the prod-
ucts of a foreign firm such that (a) in a host
country with high animosity toward the for-
eign firm’s home country, consumer purchase
intentions are higher when the products of the
foreign firm are launched through an acquisi-
tion (vs. import) entry mode, and (b) in a host
country with low animosity toward the for-
eign firm’s home country, consumer purchase
intentions toward the firm’s products are less
affected by whether the products are launched
through an import or an acquisition entry
mode.
Full Acquisition and Partial Acquisition Entry
Modes
A foreign firm may fully or partially acquire a local firm
to enter the host country market. Full acquisition refers
to acquiring 100% equity in a local firm, whereas par-
tial acquisition entails acquiring less than 100% equity
in a local firm. A partial acquisition can result in an
AJV, which represents a co-ownership and cogover-

nance structure (Chen and Hennart 2004). In contrast,
a full acquisition leads to a subsidiary that is wholly
owned by a foreign firm. The degree of local ownership
in the subsidiary can be an important indicator of host
identity as perceived by local consumers.
The co-ownership structure of an AJV means that the for-
eign subsidiary is partially owned and controlled by a local
partner. In an animosity context, consumers would have
favorable attitudes toward an AJV in which the partial
local ownership has diluted the hostile foreign identity. In
contrast to a partial acquisition, the full acquisition sub-
sidiary that is wholly owned by an animosity-evoking for-
eign entrant results in more negative consumer emotions,
greater social pressures, and thus lower purchase inten-
tions. In contrast, consumers in a typical host country with
low animosity toward the target country may be less con-
cerned with the ownership structure of the foreign sub-
sidiary and thus may be less affected by the entry modes
associated with different host and foreign identities.
full acquisition and AJVs on consumer pur-
chase intentions toward the products of for-
eign firms such that (a) in a host country with
high animosity toward the foreign firm’s home
country, consumer purchase intentions are
higher when the firm’s products are launched
through an AJV (vs. full acquisition) entry
mode, and (b) in a host country with low ani-
mosity toward the foreign firm’s home coun-
try, consumer purchase intentions toward the
firm’s products are less affected by whether
the products are introduced through a full
acquisition or an AJV entry mode.

Postentry Branding Strategy
We suggest that the country of brand (COB; i.e., the
national origin of a brand) in a hostile host country can
be affective and can provide normative cues for con-
sumer attitudes and behavior. We consider the three
most commonly used branding strategies that a foreign
subsidiary may adopt after entering a host country: a
local partner’s brand (local brand), a local–foreign
cobrand, and a foreign–local cobrand. Focusing on the
partial acquisition context, we propose that various
branding strategies are associated with different degrees
of host and foreign identity. Signaling theory indicates
that brand-related information, such as pricing, adver-
tising, and brand partnering, sends signals to consumers
about the quality, identity, and status of products
(Erdem and Swait 1998). Drawing on signal theory, we
suggest that the branding strategy of an alliance can be
a signal indicating the relative impacts of partners on
alliances (Li and He 2013). The greater the local part-
ner’s perceived impact on the AJV subsidiary, the higher
the degree of the subsidiary’s host identity.
The local brand strategy indicates that the subsidiary
keeps the local firm’s brand at the expense of the foreign
firm’s brand. A local brand strategy sends the signal to
consumers that the local firm’s managers hold higher
relative standing in the subsidiary compared with the
two cobrand strategies. In contrast, with the exclusion of
the foreign brand in the AJV, consumers perceive the for-
eign firm as being passively involved in management
practices. As such, we propose that consumers perceive a

subsidiary that adopts a local brand to have the most
salient host identity among the three branding strategies.
We further suggest that consumers associate local-
foreign cobranding with more salient host identity than
foreign-local cobranding. Li and He’s results contend
that the brand order of a brand alliance can signal the
relative powers, responsibilities, and controls of part-
ner brands over the brand alliance. More specifically,
consumers perceive the brand in the first position as
more dominant in and more responsible for the perfor-
mance of the brand alliance. Li and He (2013) show
that partner brand attitude has a stronger effect on con-
sumer attitudes toward an international brand alliance
when the partner brand appears first rather than sec-
ond. Accordingly, an AJV with a local-foreign cobrand
can lead to the perception that the local partner has
more power in the AJV, thus creating a stronger host
association.
The order effect can further be explained by the primacy
effect, which suggests that the first piece of exposed
information carries the most weight in the formation of
an impression of the focal subject (Anderson 1965).
This implies that the national identity of the first brand
has greater weight when consumers process information
about a cobranding AJV. Building on these arguments,
we propose that unlike an AJV that adopts a foreign–
local cobrand, people perceive an AJV that adopts a
local–foreign cobrand to have a more salient host iden-
tity because of the local partner’s stronger impact. We
suggest that in a high-animosity host country market,
the more salient the subsidiary’s host identity, the higher
the consumer product purchase intention. However,
consumers in a typical host country with low animosity
toward the target country may be less concerned with

the foreign subsidiary’s brand name and thus may be
less affected by the branding strategy associated with
different host and foreign identities.
branding strategy on consumer purchase
intentions toward a foreign firm’s products
such that (a) in a host country with high ani-
mosity toward the foreign firm’s home coun-
try, consumer purchase intentions are higher
when an AJV adopts a branding strategy with
more salient host identity than when the brand
has a less salient host identity (i.e., the prefer-
ence sequence is local brand, local–foreign
cobrand, foreign–local cobrand), and (b) in a
host country with low animosity toward the
foreign firm’s home country, consumer pur-
chase intentions toward the firm’s products
are less affected by branding strategy.
STUDY 1: FOREIGN ENTRY MODE
Overview
In Study 1, we chose a Japanese firm as the foreign
entrant. Mainland China and Taiwan represent the host
country markets with high and low animosity toward
Japan, respectively. Mainland China and Taiwan share
similar cultural backgrounds and languages but have
different relationships with Japan. China endured a ter-
rible occupation and massacre at the hands of the
Japanese during World War II, which has led to a con-
tinuous nationwide hostile attitude toward Japan (e.g.,
Ishii 2009; Klein, Ettenson, and Morris 1998). The
Japanese also ruled Taiwan for 50 years (1895–1945) as
a result of the Treaty of Shimonoseki. However, in con-

trast to the case of China, Japan made efforts to
improve the Taiwanese economy and infrastructure.
Many older Taiwanese people still have a certain degree
of nostalgia for Japanese colonial rule (e.g., Peng-Er
2004). Therefore, the relationships between Japan and
mainland China and that between Japan and Taiwan
provide an appropriate context for this theory.
Participants
In total, 284 students from mainland China and Taiwan
participated in a pretest and the main study. The student
sample used in this article should not cause serious gen-
eralizability problems. As ample research has suggested
(e.g., Amine 2008; Ang et al. 2004; Riefler and Diaman-
topoulos 2007), consumer animosity can be viewed as a
macro level sociological phenomenon that reflects the
social norms and collective interpretations of consumers
in a host country. In China, the government and educa-
tional institutions continuously remind citizens about
the historical hostility between China and Japan. For
example, Chinese textbooks recount the brutal Japanese
occupation (1931–1945) and the Nanjing Massacre
(1937). We suggest that college students, who are
affected by families, schools, media, and government
agents, can be representative of the general population.
The use of student participants is also a common prac-
tice in previous consumer animosity and COO studies
(e.g., Maheswaran and Chen 2006; Russell and Russell
2006) and has several research advantages when the pri-
mary goal is theory testing (Sternthal, Tybout, and

Calder 1994, p. 18). This type of sampling can control
many extraneous variables (e.g., age, education, experi-
ences) because students are a more homogeneous group
than are ordinary individuals.
Of the 196 students who participated in the main study,
the Chinese sample consisted of 96 students (55 women
and 41 men) from a large finance and economics univer-
sity in Anhui, a province of mainland China. The Tai-
wanese sample included 100 students (34 women and
66 men) from a major university located in southern
Taiwan. Participants in the pretests were drawn from
the same pool as the main study. We developed the ques-
tionnaire in traditional Chinese for the Taiwanese par-
ticipants and translated it into simplified Chinese for
Chinese participants.
Pretest
A total of 88 students from China (28 women and 20
men) and Taiwan (18 women and 22 men) participated
in the pretest. Participants were asked to indicate their
agreement (on a seven-point scale, where 1 = “strongly
disagree” and 7 = “strongly agree”) with statements
regarding four general constructs: (1) product judgment;
(2) willingness to buy; (3) consumer ethnocentrism; and
(4) general, war, and economic animosity. We adopted
the product judgment scale used in this study from pre-
vious studies (Josiassen 2011; Klein, Ettenson, and Mor-
ris 1998). We measured product judgment using six
items; the Cronbach’s alpha values for Chinese and Tai-
wanese participants were .72 and .71, respectively.
Thus, we averaged items to form an index for that con-
struct. We assessed willingness to buy with five items
derived from previous studies (i.e., Josiassen 2011;
Klein, Ettenson, and Morris 1998; Shoham et al. 2006).

The Cronbach’s alpha values for Chinese and Taiwanese
participants were .84 and .79, respectively.
We measured consumer ethnocentrism with five items
from the Consumer Ethnocentrism Tendencies scale
(CETSCALE; Klein, Ettenson, and Morris 1998; Nijssen
and Douglas 2008; Shimp and Sharma 1987). The
Cronbach’s alpha values for Chinese and Taiwanese par-
ticipants were .81 and .76, respectively. We measured
general, war, and economic animosity with items
adopted from Klein, Ettenson, and Morris (1998). A
single item, “I dislike Japanese,” measured general ani-
mosity. Three items measured war animosity (e.g., “I
will never forgive Japan for the Nanjing Massacre”
[Chinese questionnaires]/“for Japanese colonization”
[Taiwanese questionnaires]), and the Cronbach’s alpha
values for Chinese and Taiwanese participants were .72
and .72, respectively. We measured economic animosity
with five items (e.g., “Japan is taking advantage of Tai-
wan [China]”), and the Cronbach’s alpha values for
Chinese and Taiwanese animosity were .76 and .83,
respectively. Finally, we collected demographic informa-
tion. Upon completion, the participants were debriefed
and thanked.
We compared Chinese and Taiwanese participants with
regard to general animosity, war animosity, and economic
animosity. As we expected, the Chinese students exhibited
higher scores than the Taiwanese on general animosity
(MChinese = 4.79 vs. MTaiwanese = 2.25; F(1, 85) = 47.04,
p < .001), economic animosity (MChinese = 4.56 vs.
MTaiwanese = 3.46; F(1, 85) = 17.40, p < .001), and war
animosity (MChinese = 5.36 vs. MTaiwanese = 2.57; F(1, 85) =
103.48, p < .001). An analysis of variance revealed a sig-
nificant effect from willingness to buy (F(1, 85) = 49.22,

p < .001) and no significant effect from product quality
judgment (p > .31). Consistent with H1, Chinese (vs. Tai-
wanese) participants showed significantly lower willing-
ness to buy Japanese products (MChinese = 3.95 vs.
MTaiwanese = 5.84), but there was no significant difference
in Japanese product judgment between the two groups
(MChinese = 4.94 vs. MTaiwanese = 5.10).
To further ensure that consumer responses toward
Japanese products mainly derive from animosity rather
than ethnocentrism, we compared Chinese and Tai-
wanese participants with regard to consumer ethnocen-
trism. No difference was evident in the mean scores of
consumer ethnocentrism of the Chinese and Taiwanese
participants (MChinese = 3.02 vs. MTaiwanese = 2.75; p >
.18). Therefore, we attribute the difference between Chi-
nese and Taiwanese participants on Japanese product
judgment and willingness to buy to the extent of ani-
mosity toward Japan. Furthermore, our results for the
Chinese student sample are similar to those obtained by
Klein, Ettenson, and Morris (1998), who used general
consumers as the research sample on general animosity
(Mgeneral consumer = 5.07 vs. Mstudent consumer = 4.79), war
animosity (Mgeneral consumer = 5.53 vs. Mstudent consumer =
5.36), economic animosity (Mgeneral consumer =
5.02 vs. Mstudent consumer = 4.56), and ethnocentrism
(Mgeneral consumer = 2.89 vs. Mstudent consumer = 2.75).
Main Study
Design. We designed three foreign entry modes to clarify

the roles of country of manufacture and country of
ownership on foreign product purchase in a cross-coun-
try context. We used a 3 (foreign entry mode: import,
full acquisition, AJV) ¥2 (animosity toward target coun-
try: high [China], low [Taiwan]) between-subjects facto-
rial design in this study. One hundred ninety-six stu-
dents from China (55 women and 41 men) and Taiwan
(34 women and 66 men) were randomly assigned to one
of three entry mode conditions.
Stimulus Materials. For the experimental stimulus, we
chose the laptop computer, which is a highly relevant
and familiar product to the student participants and a
high-involvement product for general consumers. Fur-
thermore, because most laptop computer purchasers
share the same information sources (e.g., websites), no
significant differences should exist in the purchase
evaluation processes of various consumer groups. Some
may question the restraint of student income on pur-
chase behavior, but both Chinese and Taiwanese parents
typically provide financial support to their children at
college by paying living and education expenses; thus,
we suggest that the students’ purchasing power substan-
tially reflects household incomes in both host markets,
especially in China, where families are legally bound to
have a maximum of only one child.
The study assumed that the laptop computer used in the
experimental condition was of the same quality as the
ones the participants were familiar with. Three versions
(import, full acquisition, and AJV) of the questionnaire
were prepared. The stimulus material comprised the
profile of a hypothetical foreign (Japanese) firm and a
hypothetical local (Chinese/Taiwanese) firm (for full
acquisition and AJV versions), a description of the for-
eign entry mode, and a product description of the laptop

computer.
Procedures and Measurement. The participants were
asked to complete a questionnaire comprising five sec-
tions. The first section presented brief definitions of the
importing, full acquisition, and AJV entry modes for the
import, full acquisition, and AJV questionnaires, respec-
tively. The import mode was defined as a foreign firm
entering and launching its product in a host country
through a local agent. Full acquisition was defined as a
foreign firm entering and launching its products by
acquiring a local firm with 100% equity. Acquisition
joint venture was defined as a foreign firm entering and
launching its products in a host country by acquiring a
local firm with 60% equity. Participants were also
informed that the companies were real but with dis-
guised brand names. A disguised brand name avoids any
potential confusion with actual brand names for which
participants may have different prior experiences or
evaluations (Keller 1987). This study used a disguised
Japanese firm (SHIZU Corporation) and a disguised
local firm (ATEK Corporation) in both host markets.
The second part of the questionnaire presents the profiles
of the Japanese and local Chinese/Taiwanese firms that
described the history and product lines and presented a
mock-up of a newspaper article regarding a Japanese
firm entering and launching its products (1) through a
local commercial agent (for the import condition), (2) by
acquiring a local firm’s 100% equity (for full acquisi-
tion), or (3) by acquiring a local firm’s 60% equity (for
AJV) in the Chinese or Taiwanese market. The third
part of the questionnaire presents an announcement of
a new laptop computer product launched by the com-
mercial agent/newly merged Japanese subsidiary in the

Chinese/Taiwanese market. To control for price, the
sales price was not included in the description of any of
the products (Insch and McBride 2004). The partici-
pants then were asked to indicate their purchase inten-
tion toward the laptop computer after reading the new
product description. We used three seven-point scales,
anchored at “very likely/very unlikely,” “definitely
would consider it/definitely would not consider it,” and
“very probable/not very probable,” to assess this
dependent measure (Singh and Cole 1993). Purchase
intentions exhibited a high degree of reliability (� = .91).
Thus, we averaged the items to form an index for that
construct. The fourth part of the questionnaire specifi-
cally measured participants’ ethnocentrism and ani -
mosity toward Japan in general, regarding war, and
regarding the economy. The last part of the question-
naire collected participants’ demographic data (includ-
ing gender, age, department, residence, and monthly
allowance). Responses to the ethnocentrism and
monthly allowance measure (1 = “less than $167,” 2 =
“$168 to $ 334,” 3 = “$335 to $500,” 4 = “$501 to
$667,” 5 = “$668 to $833,” and 6 = “greater than
$834”) were significant between the two countries (eth-
nocentrism: MChinese = 2.83 vs. MTaiwanese = 3.11; F(1,
190) = 3.35, p < .06; monthly allowance: MChinese =
1.29 vs. MTaiwanese = 1.86; F(1, 193) = 13.80, p < .001).
Thus, we considered ethnocentrism and monthly
allowance as covariates. The questionnaire took
approximately 15 minutes to complete, after which the
participants were debriefed and thanked.

Results
Manipulation Check. Our manipulation check indicated
results as we expected. The Chinese participants exhibited
higher scores than the Taiwanese on general animosity
(MChinese = 4.86 vs. MTaiwanese = 2.50; F(1, 194) = 125.23,
p < .001), war animosity (MChinese = 4.99 vs. MTaiwanese =
3.13; F(1, 194) = 97.80, p < .001), and economic ani-
mosity (MChinese = 4.55 vs. MTaiwanese = 3.26; F(1, 194) =
66.16, p < .001).
Import Versus Full Acquisition Mode. An analysis of
covariance (ANCOVA) revealed no significant inter-
action for the effect of entry mode (import vs. full acqui-
sition) and consumer animosity on purchase intentions
(F(1, 121) = .00, p > .98; see Table 1). Monthly
allowance as a covariate was not significant (F(1, 121) =
.01, p > .55). Although ethnocentrism as a covariate was
significant (F(1, 121) = 11.63, p < .001), its inclusion or
exclusion did not alter the results. Inconsistent with H2a,
the purchase intentions were not significantly higher when
the entry mode was full acquisition (vs. import) for Chi-
nese consumers (Mimport = 4.33 vs. Mfull acquisition = 4.21;
p > .73). Consistent with H2b, purchase intentions did
not differ for Taiwanese consumers regardless of
whether the entry mode was import or full acquisition
(Mimport = 5.20 vs. Mfull acquisition = 5.24; p > .87).
Import Versus AJV Mode. An ANCOVA on purchase
intentions yielded significant animosity by entry mode
(import vs. AJV) interaction (F(1, 119) = 4.14, p < .04; see
Figure 1). Monthly allowance as a covariate was not sig-
nificant (F(1, 119) = 1.18, p > .28). Although ethnocen-
trism as a covariate was significant (F(1, 119) = 4.00, p <
.05), its inclusion or exclusion did not alter the results.

Consistent with H2a–b, purchase intentions were signifi-
cantly higher when the entry mode was AJV (vs. import)
for Chinese consumers (Mimport = 4.33 vs. MAJV = 4.95;
F(1, 61) = 5.08, p < .03) but did not differ for Taiwanese
consumers (Mimport = 5.20 vs. MAJV = 5.17; p > .91).
Full Acquisition Versus AJV Mode. An ANCOVA on
purchase intentions revealed significant animosity by
entry mode (full acquisition vs. AJV) interaction (F(1,
122) = 3.90, p < .05; see Figure 1). Monthly allowance
as a covariate was not significant (F(1, 122) = 1.18, p >
.28). Although ethnocentrism as a covariate was signifi-
cant (F(1, 122) = 6.09, p < .02), its inclusion or exclu-
sion did not alter the results. Consistent with H3a–b, pur-
chase intentions were significantly higher when the
entry mode was AJV (vs. full acquisition) for Chinese
consumers (Mfull acquisition = 4.21 vs. MAJV = 4.94; F(1,
63) = 5.98, p < .02) but did not differ for Taiwanese
consumers (Mfull acquisition = 5.24 vs. MAJV = 5.17; F(1,
66) = .08, p > .77).
Discussion of Study 1
The results of the pretest show that compared with con-
sumers in Taiwan, those in mainland China exhibit a
higher average hostile attitude toward Japan and a lower
average purchase intention toward its products. However,
consumers in both host countries showed no significant dif-
ferences in their evaluations of Japanese product quality.
Chinese consumers’ hostile attitude results in lower inten-
tions to purchase Japanese products even though more
than 60 years have passed since World War II.
The results of the main study demonstrate that Chinese
participants were more influenced by the extent of host
identity and local ownership in the entry mode. Chinese

consumers exhibited higher purchase intentions when
Table 1. Results of Entry Modes in China and Taiwan
Animosity Toward the Target Country
High Animosity (China) Low Animosity (Taiwan)
Import Full Acquisition AJV Import Full Acquisition AJV
Purchase intention 4.37 (1.31) 4.21 (1.49) 4.95* (.84) 5.20
(1.06) 5.24 (1.10) 5.17 (.98)
*p < .05.
the foreign product was launched through an AJV entry
mode than when it was introduced through a full acqui-
sition or import entry mode. However, they exhibited no
significant difference between import and full acquisi-
tion entry modes. A possible explanation is that con-
sumers may believe that these two entry modes are asso-
ciated with single ownership by a foreign firm. A full
acquisition results in a wholly owned foreign subsidiary
that consumers perceive to be strongly associated with
the home country of the foreign firm. Consumers might
regard the acquired company as foreign. In contrast, for-
eign entry modes did not influence the foreign product
purchase intentions of Taiwanese participants.
STUDY 2: POSTENTRY BRANDING
STRATEGY
Design and Participants

In Study 2, we further investigate consumer responses
toward products launched through a postentry sub-
sidiary with various branding strategies. We restrict our
attention to products launched through an AJV sub-
sidiary. We designed three branding strategies to clarify
the effect of COB on purchase intentions of foreign sub-
sidiary products in a cross-country context. One hun-
dred sixty-six students from China (48 women and 39
men) and Taiwan (34 women and 45 men) were ran-
domly assigned to conditions in a 3 (AJV branding
strategy: local brand, local–foreign cobrand, foreign–
local cobrand) ¥2 (consumer animosity: high [China],
low [Taiwan]) between-subjects factorial design. The
Chinese and Taiwanese participants were from the same
schools as those who participated in Study 1. They also
received course credit for their participation.
Procedures and Measurement
The experimental procedures and measures were identi-
cal to those in the AJV entry mode of Study 1 but with
mention of the corporate brand name. The second part
of the questionnaire provided information regarding
whether the acquired Chinese/Taiwanese firm would
keep its corporate name (for the local brand condition)
or change its corporate name either to SHIZU-ATEK
(for the foreign–local cobrand condition) or to ATEK-
SHIZU (for the local–foreign cobrand condition) after
acquisition. In addition, the third part of the question-
naire presented a mock-up advertisement of the new
laptop computer with the corporate brand name.
Results
Manipulation Check. As we expected, the Chinese par-

ticipants exhibited higher scores than the Taiwanese
participants on general animosity (MChinese = 4.48 vs.
MTaiwanese = 2.47; F(1, 163) = 68.52, p < .001), war ani-
mosity (MChinese = 4.89 vs. MTaiwanese = 2.53; F(1, 163) =
Figure 1. Moderating Effect of Consumer Animosity on the
Effects of Foreign Entry Mode on Purchase Intention
!
4.00
4.20
4.40
4.60
4.80
5.00
5.20
5.40
P
u
rc
h
as

e
In
te
n
ti
o
n
Animosity Toward Japan
Foreign Entry Mode
Import
Full acquisition
AJV
!
5.20
5.40
!
!

!
!
!
4.20
4.40
4.60
4.80
5.00
P
u
rc
h
as
e
In
te
n
ti
o
n

!
!
Foreign Entry Mode
Import
Full acquisition
AJV
!
Foreign Entry Mode
Import
Full acquisition
AJV
!
!
4.00
High Animosity (China)

!
High Animosity (China) Low Animosity (T
oward Japan Animosity T Toward Japan
!
aiwan) imosity (T Taiwan)
oward Japan
!
107.52, p < .001), and economic animosity (MChinese =
4.51 vs. MTaiwanese = 3.64; F(1, 163) = 17.34, p < .001).
Postentry Branding Strategy. An ANCOVA on purchase
intentions (� = .92) yielded a significant main effect of ani-
mosity (F(1, 154) = 7.55, p < .01) and a significant ani-
mosity by postentry branding interaction (F(2, 154) =
4.15, p < .02; see Figure 2). Monthly allowance as a
covariate was not significant (F(1, 154) = .13, p > .71).
Although ethnocentrism as a covariate was significant
(F(1, 154) = 11.59, p < .001), its inclusion or exclusion did
not alter the results. In accordance with H4a, purchase
intentions were significantly higher when the AJV adopted
a local brand or a local–foreign (vs. foreign–local) cobrand
(Mlocal = 4.77 vs. Mforeign-local = 4.03; F(1, 55) = 3.91, p <
.05; local–foreign vs. foreign–local: Mlocal-foreign = 4.92,

F(1, 57) = 4.65, p < .04) but were not significantly higher
when the AJV adopted a local (vs. local–foreign) brand for
Chinese participants (Mlocal = 4.77 vs. Mlocal-foreign = 4.92;
F(1, 56) = .18, p > .67). Consistent with H4b, the Tai-
wanese consumers’ purchase intentions did not differ
when the AJV products had a local, local–foreign, or
foreign–local brand (Mlocal = 5.03 vs. Mlocal-foreign = 5.29
vs.
Mforeign-local = 5.52; F(2, 76) = 1.43, p > .24) (see Table 2).
Discussion of Study 2
Study 2’s findings provide evidence that purchase inten-
tions of foreign subsidiary products were differentially
influenced by the use of branding information in two
host countries. Although branding information did not
influence the purchase intentions of Taiwanese partici-
pants, we found that Chinese participants’ purchase
intentions for foreign subsidiary products augmented as
the salience of the host identity of the corporate brand
name increased. Chinese consumers preferred an AJV
subsidiary that adopts a local brand or a local–foreign
cobrand to one that espouses a foreign–local cobrand.
However, we did not find a significant difference
between an AJV subsidiary adopting a local brand and
one adopting a local–foreign cobrand. A possible
explanation is that Chinese participants may believe
that both branding strategies represent the higher rela-
tive position and power of the local firm over the for-
eign subsidiary.
CONCLUSIONS AND IMPLICATIONS
Political attitudes can lead to a country-induced bias,
which affects consumer attitudes and purchase inten-

tions. In an age of expanding globalization, these non-
quality-based biases have significant performance impli-
cations for international marketers. Unlike other
political attitudes (e.g., national identification, national-
ism, patriotism), animosity is bilateral and can become
a country-specific weakness and marketing barrier for
international marketers from a particular offensive
Figure 2. Moderating Effect of Consumer Animosity on the
Effects of Branding Strategy on Purchase Intention
!
3.80
4.00
4.20
4.40
4.60
4.80
5.00
5.20
5.40
5.60

P
u
rc
h
as
e
In
te
n
ti
o
n
Animosity Toward Japan
Branding Strategy
Local brand
Local-foreign brand
Foreign-local brand
!
!
!

!
!
!
4.80
5.00
5.20
5.40
5.60
P
u
rc
h
as
e
In
te
n
ti
o
n

!
!
Branding Strategy
Local brand
!
Branding Strategy
Local brand
!
!
3.80
4.00
4.20
4.40
4.60
High Animosity (China)

P
u
rc
h
as
e
In
te
n
ti
o
n
!
High Animosity (China) Low Animosity (T
oward Japan Animosity T Toward Japan
!
aiwan) ity (T Taiwan)
Local-foreign brand
Foreign-local brand

!
Local-foreign brand
Foreign-local brand
!
!
!
!
!
Local brand
Local–foreign brand
Foreign–local brand
country. Therefore, the reduction of the negative impact
of animosity becomes a critical task for marketers from
an offensive country. At the same time, other foreign
marketers can benefit from such a marketing opportu-
nity. Our study proposes and empirically tests an appro-

priate entry mode and branding strategy that can miti-
gate host country consumers’ hostile feelings and
enhance their purchase intentions.
Theoretical Implications
This study addresses the calls for more research on links
between COO and animosity (e.g., Amine, Chao, and
Arnold 2005). Our research distinguishes the cognitive
mechanism, which uses COO as a quality cue, and non-
quality mechanisms, which use COO to express con-
sumers’ emotional value and social norms. In line with
previous research, the present study shows that in an ani-
mosity context, the impact of the nonquality mechanism
is much greater than that of the cognitive mechanism
(Klein, Ettenson, and Morris 1998; Leong et al. 2008;
Verlegh and Steenkamp 1999). The present study has
important theoretical implications for the international
marketing fields in several significant ways. First, we
integrate entry mode choice into COO and animosity
research. Whereas previous literature has provided
ample evidence that entry mode decisions are a critical
factor in shaping foreign market performance (e.g.,
Bradley and Gannon 2000; Burgel and Murray 2000),
this topic has not been explored in COO and animosity
research. This is a significant omission given that an
important portion of international market entries are in
the form of FDIs. To the best of our knowledge, this arti-
cle covers new ground in exploring consumer responses
to the products of an animosity-evoking foreign firm that
adopts various FDI entry modes and branding strategies.
In other words, we show that although the animosity
between two countries is a political, diplomatic, and
sociological precondition for international marketers,
they are able to reduce the negative effect by employing

an appropriate entry mode and postentry branding
strategy. Our results support Amine, Chao, and Arnold’s
(2005) arguments that marketers from animosity-
evoking countries can mitigate negative animosity
impacts by using appropriate strategies.
Second, our study contributes to the consumer animos-
ity and COO research streams by showing that FDI
entry modes might lead to hybrid subsidiaries that are
associated with two countries in a host market. An FDI
subsidiary can be perceived as having a complex COO,
such as country of ownership (e.g., a joint venture or a
wholly owned subsidiary), country of manufacture (e.g.,
a locally made or imported product), and COB (e.g.,
cobrand). Consumer responses to the “foreign prod-
ucts” launched by such hybrid subsidiaries must again
be examined. This research is the first effort to explore
the effects of cross-country ownership and hybrid COBs
and countries of manufacture on consumer responses in
an animosity context. It provides international market-
ing researchers and practitioners with valuable insights
into how a foreign firm can manipulate COO effects to
mitigate host country consumer animosity.
In addition, the country-of-ownership issue, which in
this research refers to the local–foreign ownership struc-
ture, is unexplored in current COO and animosity
research streams. However, the results show that cross-
country ownership can be an important factor that
shapes consumer perceptions of the COO of a foreign
subsidiary. In particular, a foreign subsidiary with par-
tial local ownership can significantly mitigate hostile
feelings. Furthermore, prior COB research has exam-
ined consumer attitudes toward the country where a
Table 2. Results of AJV Branding Strategies in China and

Taiwan
Animosity Toward the Target Country
L Brand L-F Brand F-L Brand L Brand L-F Brand F-L Brand
Purchase intention 4.77 (1.13) 4.92 (1.52) 4.03* (1.64) 5.03
(1.19) 5.29 (.98) 5.51 (1.02)
*p < .05.
Notes: L = local; L-F = local–foreign; F-L = foreign–local.
brand is perceived to originate (e.g., Fetscherin and Ton-
car 2010). However, we propose that a cobranded prod-
uct is essentially a hybrid with two COOs. A hybrid
branding strategy leads to different consumer responses
from a branding strategy with a single brand name. We
propose that the branding strategy that can be used to
manipulate COO perceptions should be an important
issue in further COO and animosity research.
Managerial Implications
In general, consumer animosity is a given country-level
condition for international marketers. However, our
results suggest that marketers can make better entry-
mode and branding decisions to mitigate negative con-
sumer emotions and social pressures regarding products
from an animosity-evoking foreign firm. Consumers
exhibit more favorable responses toward AJV products

than toward imported ones. The results demonstrate
that for an international marketer from a home country
that evokes hostility, FDI entry modes beyond import
may represent better approaches for postentry success.
In addition, we observed that in a host market with high
animosity, consumers prefer products that are launched
by a foreign subsidiary with partial local ownership. This
finding is in line with previous research indicating that
foreign entrants can exchange their subsidiary ownership
and technologies for market acceptance when facing
social pressures in a host country (e.g., Chan and Makino
2007). However, this could be a difficult decision when
opportunism is a critical concern, as transaction-cost
economists suggest (e.g., Brouthers 2002). Entry-mode
choice may become a trade-off between control and
market acceptance in a hostile host country. We suggest
that under such a circumstance, the foreign firm should
consider administering market surveys to study the lev-
els of negative effect of consumer animosity in selected
target markets. These surveys could provide valuable
information regarding how much the firm should com-
promise on its subsidiary ownership. Furthermore,
when a local partner is less willing to relinquish partial
ownership to a foreign entrant, forming a greenfield
joint venture (a foreign company and a local company
collaborating to form a new venture) could result in a
similar outcome to that of an AJV.
Branding strategy is a critical decision for a marketer in
a hostile host country. Consumers prefer an AJV prod-
uct with a brand associated with a more salient host
identity. Local and local-foreign cobranding lead to bet-
ter consumer responses than does foreign-local cobrand-
ing. Although we consider only the branding strategy of

an AJV, we suggest that it is also a critical decision for
other entry modes that a marketer may adopt in an ani-
mosity context.
Our research demonstrates that entry modes and brand-
ing strategies associated with more salient host identity
can reduce consumer animosity. Consequently, a foreign
firm from an offending country can enhance the host
identity of its subsidiary product by conducting other
localization strategies in addition to those of entry mode
and branding choice. We suggest that localization of key
positions, such as general managers and/or spokesper-
sons, could benefit a foreign subsidiary’s host identity in
a hostile host market. We further propose that increas-
ing the proportion of local supplies may also enhance
the host identity of a foreign subsidiary. In addition, it is
important for animosity-evoking firms to increase
opportunities to communicate with host country con-
sumers regarding their localization efforts.
Limitations and Future Studies
The limitations inherent in this study present opportuni-
ties for further research. In this study, we use scenario
experimentation and student samples to test our research
hypotheses. Scenarios in the study can arouse past mem-
ories, either observed or self-experienced, and stimulate
participants to respond to questions with genuine inter-
est. However, the scenarios contain descriptions of lim-
ited circumstances, exclude details of the situation, and
require respondents to fill in these gaps. Moreover,
although the students in our samples were consumers of
laptop computers, they may not be representative of
other population groups in the two countries. Future
studies could use other research methods and nonstu-
dent samples to triangulate our findings. In addition to

full acquisitions and AJVs, there are other entry mode
choices for FDIs, such as greenfield investment. Further
research should examine whether our findings are appli-
cable in other entry modes. Finally, we studied the
hypothesized effects using only one high-involvement
product category (laptop computers), so future
researchers could generalize our results by testing using
other, low-involvement product categories.
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