Serving national security? MNE responses in economic war

Abstract

We argue that national security concerns can be an important driver of market exit decisions of MNEs. Drawing on institutional theory and using fuzzy-set qualitative comparative analysis (fsQCA) on a sample of 196 MNEs from 26 home countries, we find that two factors expressing pressure arising from national security concerns combined with three organizational boundary conditions account for 88 % of exit decisions of MNEs from the Russian market following the start of the Ukraine War. We extend theory by establishing national security as a source of legitimacy pressure affecting MNE strategic choices and by elaborating contingencies under which national security pressures are sufficient for market exit, at least in the context of economic war. Our findings may further be relevant to the sanctions literature in international business by indicating that the impact of sanctions is contingent on organizational-level conditions.