Building resilience amidst geopolitical tensions: The case of U.S. MNE subsidiaries in China

Abstract

This study investigates how foreign subsidiaries build resilience amid home-host geopolitical tensions. Drawing on resilience and geopolitical risk management literature, we conduct an in-depth qualitative analysis of four U.S. MNE subsidiaries in China. Building on our findings, we propose a model of subsidiary resilience as a capability-building process that unfolds across three stages: before, during, and after geopolitical disruptions. Our results reveal two distinct resilience trajectories. Subsidiaries that exhibit a transformative resilience cycle engage in promotive resistance before disruption, followed by proactive adaptation during disruption and deep-level learning afterward, enabling them to ‘bounce forward’ to a stronger state. In contrast, subsidiaries following a stabilizing resilience cycle adopt defensive resistance, reactive adaptation, and surface-level learning, resulting in a return to pre-crisis conditions (‘bouncing back’). These findings uncover the critical processes determining whether and how subsidiaries maintain resilience over time. The paper concludes with implications for both research and practice.