Terrorist attacks and the war in Iraq
A) encourage firms to take truly global corporate strategies in order to offset losses in one region with gains in another.
B) are considered a "cost of doing business" by international firms.
C) have not decreased the level of international investment in any region except those involved in active wars.
D) have increased the liability of foreignness for firms.

Question

Quizplus · Accepted Answer

Terrorist attacks and wars in Iraq have increased the liability of foreignness for firms, as they face increased risks and costs associated with operating in foreign markets. This may lead to a reluctance to invest or expand in certain regions, which can negatively impact the firm's international strategy. Option A is not a direct consequence of terrorist attacks and the Iraq war. Option B is not entirely accurate, as terrorist attacks and wars are not seen as a normal cost of doing business. Option C is also not entirely accurate, as some regions may experience reduced levels of investment even without active wars, depending on the specific risks and opportunities of each market.

Terrorist Attacks and the War in Iraq