A greater cultural distance between two trading countries
A) increases linguistic similarities between the two countries.
B) increases the liability of foreignness.
C) reduces the uncertainty of doing business.
D) reduces the transaction costs associated with business.

Question

Quizplus · Accepted Answer

A greater cultural distance can increase the cost and uncertainty of conducting business abroad. In short, greater cultural distance increases the liability of foreignness.

A Greater Cultural Distance Between Two Trading Countries