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Competing in all markets provides the potential for economies because of the combined market size. Also, firms may be influenced to expand their global reach because competing in emerging markets can lead to higher performance. However, a firm that competes in industries in which the international markets differ greatly may wish to narrow its scope because of the liability of foreignness. Factors such as differences in labor forces or an inability to understand customers in a particular market can lead to disadvantages for firms competing outside their primary domestic markets. Also, the trend toward regionalization is supported by governments that have developed trade agreements to increase the economies power of their regions...
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