Liability of Foreignness Is the Inherent Disadvantage Experienced by Foreign

question 24

True/False

Liability of foreignness is the inherent disadvantage experienced by foreign firms in host counties because of their non-native status.

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Definitions:

Liability of Foreignness

The disadvantages or additional costs that firms operating in a foreign country face compared to local firms.

Geographic Distance

Reflects the physical space between two points on the earth, often impacting economic, social, and political interactions.

Nonequity Modes

International business arrangements that do not involve the exchange of ownership shares, such as licensing agreements and management contracts.

Equity Modes

Methods or strategies employed in acquiring ownership or stakes in companies.