The liability that represents the costs of doing business abroad that result in a competitive disadvantage vis-à-vis indigenous firms.
A) liability of FDI
B) liability of foreignness
C) liability of domestics
D) none of the above

Question

Quizplus · Accepted Answer

The term "liability of foreignness" refers to the costs and disadvantages that come with doing business abroad as a foreign firm. Indigenous (or domestic) firms may have advantages such as better knowledge of the local market and government regulations, which can create a competitive disadvantage for foreign firms. The other options, A and C, are not recognized concepts in international business literature.

The Liability That Represents the Costs of Doing Business Abroad