Linguistic distance is an important factor that helps in determining differences in values across countries and the amount of trade between countries because:
A. the closer the languages the tougher the interactions.
B. crossing "wider" language differences increases transaction costs.
C. the more distant a language from the other, the more valuable the brand becomes in the new territory.
D. major languages have "syntactical superiority" over minor languages that help in brand positioning.
E. a 'neutral' language is required to address the differences arising out of linguistic distances.
Answer: B. crossing "wider" language differences increases transaction costs.