Governance and coordination costs increase when ________.

Question

Quizplus · Accepted Answer

When information distortion increases in global markets, it becomes difficult for firms to effectively govern and coordinate their operations, leading to increased governance and coordination costs. Exiting global markets (A) may actually reduce governance and coordination costs, while domestic expansion (C) may increase these costs depending on the scale and complexity of the expansion. Liability of foreignness (D) refers to the additional costs and risks associated with operating in foreign markets, but it is not directly related to governance and coordination costs.

Governance and Coordination Costs Increase When ________