The lower survival rate of foreign companies in comparison to local firms for many years after they begin operations is known as ________.
A)ethnocentric reaction
B)polycentric reaction
C)liability of foreignness
D)most-favored-nation behavior

Question

Quizplus · Accepted Answer

The lower survival rate of foreign companies in comparison to local firms for many years after they begin operations is known as the "liability of foreignness." This term refers to the inherent disadvantage that foreign firms face in unfamiliar environments due to differences in institutional frameworks, cultural norms, and political environments. This liability can manifest in various forms, such as difficulty in obtaining licenses and permits, lack of access to distribution channels, and discriminatory treatment from local firms and governments. As a result, foreign firms may struggle to compete with established local firms and may have a higher likelihood of failure.

The Lower Survival Rate of Foreign Companies in Comparison to Local