Geopolitical risk and foreign subsidiary performance of emerging market multinationals

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2024-01-09 DOI:10.1016/j.mulfin.2024.100836

Xin Li , Yan Tong , Kai Zhong , Guoquan Xu , Wenyi Zhao

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Abstract

In recent years, enterprises have faced increasing uncertainty due to rising geopolitical risks. This paper examines the impact of geopolitical risk (GPR) in host countries on the performance of foreign subsidiaries of A-share-listed Chinese multinational enterprises (MNEs) from 2003 to 2020. The results show that the GPR of host countries negatively affects the foreign subsidiary performance of Chinese MNEs. The deteriorated local business environment acts as a channel for this negative relationship. Moreover, such a negative relationship is mitigated for listed firms with more international experience and senior executives with an overseas background, when the foreign subsidiaries do not operate in sensitive industries or when there is a better institutional environment in the host countries. This study extends the literature on how external uncertainty affects the performance of foreign subsidiaries of emerging market multinational enterprises. It also sheds light on the internationalization of firms through the management of international uncertainty.

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地缘政治风险与新兴市场跨国公司海外子公司的业绩

近年来，由于地缘政治风险不断上升，企业面临着越来越多的不确定性。本文研究了 2003 年至 2020 年东道国地缘政治风险（GPR）对 A 股上市中国跨国企业（MNE）境外子公司绩效的影响。研究结果表明，东道国的地缘政治风险对中国跨国企业海外子公司的绩效有负面影响。当地商业环境的恶化是造成这种负面关系的一个渠道。此外，当外国子公司不在敏感行业运营或东道国有更好的制度环境时，国际经验更丰富的上市公司和有海外背景的高管可以缓解这种负面关系。本研究扩展了有关外部不确定性如何影响新兴市场跨国企业海外子公司绩效的文献。它还揭示了企业通过管理国际不确定性实现国际化的过程。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.