The resource-based view argues that foreign firms need to:
A) Understand regulatory risks.
B) Employ overwhelming resources and capabilities to offset the liability of foreignness.
C) Understand the rules governing investing.
D) Be aware of trade and investment barriers.

Question

Quizplus · Accepted Answer

The resource-based view argues that foreign firms need to employ overwhelming resources and capabilities to offset the liability of foreignness, which includes issues such as cultural differences, unfamiliar institutional environments, and lack of local knowledge. Understanding regulatory risks, rules governing investing, and trade and investment barriers are important, but they are not the core focus of the resource-based view. The resource-based view suggests that foreign firms need to employ overwhelming resources and capabilities to offset the liability of foreignness. This means that by having superior resources and capabilities, foreign firms can overcome the challenges and risks of operating in a foreign market. Understanding regulatory risks, the rules governing investing, and trade and investment barriers are important considerations for foreign firms but they do not necessarily help them overcome the liability of foreignness.

The Resource-Based View Argues That Foreign Firms Need To