The "liability of foreignness" is the:
A) inability of most U.S. managers to truly comprehend foreign cultures.
B) political disadvantage that U.S. firms have when doing business abroad.
C) overall risk of participating outside a firm's domestic country when entering global competition.
D) preference for "buying local," which always puts foreign firms at a disadvantage when competing in the U.S. market.

Question

Quizplus · Accepted Answer

The liability of foreignness refers to the inherent disadvantage that foreign firms face when competing in markets outside their home country due to unfamiliarity with cultural, legal, and institutional norms and higher costs of doing business. This results in additional risks and costs that are not experienced by local firms. Options A, B, and D do not fully capture the concept of liability of foreignness.

The "Liability of Foreignness" Is The