In the context of companies entering foreign markets, which of the following is likely to face a small liability of foreignness?
A) Abc Corp., a company located in the country of Neora, is entering the market in the country of Loen, where Neora and Loen have high economic dissimilarities
B) Octave Sys Inc., a company located in the country of Gota, is entering the market in the country of Hannat, where Gota and Hannat are geographically situated very close to each other
C) Mnk Creative Systems, a company located in the country of Plethod, is entering the market in the country of Koraew, where Plethod and Koraew do not share cultural bases
D) Syskant Corp., a company located in the country of Ghina, is entering the market in the country of Milkhan, where Ghina and Milkhan possess huge administrative differences

Question

Quizplus · Accepted Answer

Geographical proximity often implies cultural, economic, or administrative similarities, which can reduce the liability of foreignness. In the case of Octave Sys Inc., being geographically close to Hannat may imply some level of similarity or easier logistics and communication, potentially reducing the liability of foreignness compared to the other options which highlight dissimilarities.

In the Context of Companies Entering Foreign Markets, Which of the Following