Formal rules in the institution-based view include?

The correct choice highlights that formal rules in the institution-based view encompass the requirement for foreign and domestic firms to be treated equally. This principle is critical as it underlines the importance of a level playing field in international business. Equal treatment fosters fair competition and encourages foreign investment by ensuring that foreign companies operate under the same legal frameworks and regulations as domestic entities. This approach helps to create a stable business environment that supports transparency, rule of law, and economic fairness, which are essential elements in promoting international trade and investment.

In contrast, the other choices pertain more to informal norms or localized considerations rather than formal regulatory frameworks. Social expectations of consumer behavior reflect cultural norms and are not codified rules that govern corporate conduct. Informal agreements between firms are also not part of the formal rules, as they lack legal enforceability. Furthermore, government regulations that affect only local companies do not align with the principle of equal treatment, as they create disparities between local and foreign firms, contradicting the fairness that formal rules aim to establish.