Despite the theoretical elegance of this hypothesis, empirical studies have come to the opposite conclusion. Despite the favorable effect of international diversification of cash flows, bankruptcy risk was only about the same for MNEs as for domestic firms. However, MNEs faced higher costs for each of the following EXCEPT:
A) agency costs.
B) political risk.
C) asymmetric information.
D) In fact, each of these costs were higher for the MNE than for the domestic firm.

Question

Quizplus · Accepted Answer

The correct answer is D because it states that each of the costs listed (agency costs, political risk, asymmetric information) were higher for MNEs (Multinational Enterprises) than for domestic firms, which means there is no exception among the options provided.

Despite the Theoretical Elegance of This Hypothesis, Empirical Studies Have