The liability of in-outsidership

Abstract

This paper examines firm internationalization in a politically fragmented market, where informal institutions dominate formal ones. This market has two competing zones, each governed by a rival political party. More specifically, this paper aims to address the following question: How does a firm navigate two competing zones in the same market? Drawing on a longitudinal case study of a Swedish SME entering the Kurdistan Region of Iraq. The study introduces the concept of in-outsidership, a paradox whereby achieving network insidership in one political zone creates network outsidership in another. The firm's experience reveals how informal institutions, political rivalries, and embedded distributor relationships shape access to local business networks. By extending business network theory to highly politicized, institutionally divided contexts, this study challenges the assumption that network insidership is universally advantageous or transferable. The paper contributes to the B2B marketing and international marketing literature by conceptualizing in-outsidership as a context-dependent liability that complicates market access and strategic relationship building. Managerial implications underscore the importance of selecting politically aware partners and developing effective network strategies when entering contested institutional territories.