Honestly, there could be a very real world impact on your SERPs without you understanding it. I suggest not blocking all traffic from foreign countries.
Let's take this scenario as an example:
I have an ecommerce website that only sells to the United States. I really only care about the US traffic, since that is where my sales can come from. However, many of my inbound site links seem to be coming from Outside US traffic. This outside US traffic cannot buy from me, in fact, they cannot buy many of the products I sell because they are not available in their country.
Even so, when investigating my link profile, I notice that some users are getting the products I sell from somewhere and then blogging about how they love the product. They include a link back to my site since they know I sell the product.
Now, it's true that most traffic from that referral source will not convert to paid users. But, the links they provide are helping me in the SERPs, which brings in the qualified traffic that converts to sales.
In regards to the bounce rate =: You're not actually decreasing the bounce rate. Instead, you've identified the accurate segment of users to be measuring bounce rate from. In your Google Analytics, you should filter out the foreign traffic so that you're only measuring the correct segment of traffic that is important to you.
Now you have the best of both worlds - your reports show the accurate target segment and its metrics, as well as, any benefit that comes from the foreign traffic and link building.