Question

The "liability of foreignness" is the: a. political disadvantage that U.S. firms have when doing business abroad. b. inability of most U.S. managers to truly comprehend foreign cultures. c. preference for "buying local," which always puts foreign firms at a disadvantage when competing in the U.S. market. d. risk of participating outside a firm's domestic markets in the global economy.

Answer 1

d. risk of participating outside a firm's domestic markets in the global economy.

Step-by-step explanation:

Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.

Globalization can be defined as the strategic process which involves the integration of various markets across the world to form a large global marketplace. Basically, globalization makes it possible for various organizations to produce goods and services that is used by consumers across the world.

The "liability of foreignness" is the risk of participating outside a firm's domestic markets in the global economy. It comprises of the costs that a business firm operating outside its home country incurs as compared with local firms operating in the same country.