AOL incurred above anticipated costs when they started their business in to South America. This is an example of _____.
A) Vertical FDI
B) Horizontal FDI
C) Liability of Foreignness
D) Liability of FDI

Question

Quizplus · Accepted Answer

The unexpected incurred costs suggest that AOL faced challenges related to the liability of foreignness, which refers to the additional costs and challenges experienced by firms operating in a foreign market due to unfamiliarity with the local culture, regulations, and business practices. This is not related to the type of FDI, nor does it indicate a liability of FDI.

AOL Incurred Above Anticipated Costs When They Started Their Business