Geopolitical volatility and subsidiary investments
Gilbert Kofi Adarkwah,
Sinziana Dorobantu,
Christopher Albert Sabel
et al.
Abstract:Research SummaryWe examine how geopolitical volatility—the instability of bilateral political affinity between countries—affects foreign subsidiary investments. Building on prior work that shows that the level of political affinity between countries facilitates foreign investments, we argue that the volatility of political affinity impedes firms' ability to form expectations about stakeholder behavior and reduces subsequent investments in subsidiaries. We further argue that the effect of volatility of politica… Show more
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