Towards a behavioral theory of MNC response to political risk and uncertainty: The role of CEO wealth at risk

Benischke, Mirko H.; Guldiken, Orhun; Doh, Jonathan P.; Martin, Geoff; Zhang, Yanze

doi:10.1016/j.jwb.2021.101265

Cited by 17 publications

(28 citation statements)

References 72 publications

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“…At the firm level, top managers explained that "identifying how multinationals' different types of operations can be affected by political tensions between countries is necessary." For example, political tensions between Venezuela and Colombia, due to divergent political ideologies between former Presidents Hugo Chavez and Alvaro Uribe, confronted Colombian multinationals in Venezuela with the post-market entry risk of expropriation (Benischke, Guldiken, Doh, Martin, & Zhang, 2022;De Villa, Rajwani, Lawton, & Mellahi, 2019). Nonetheless, this risk was higher for production plants than for distribution offices.…”

Section: Figure 1 Multi-level Approach For Assessing Geopolitical Riskmentioning

confidence: 99%

Assessing Geopolitical Risk: A Multi-Level Approach for Top Managers of Multinationals

Villa

2023

AIB Insights

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Geopolitical risk is a major concern for top managers of multinationals around the globe. However, top managers often find it challenging to assess how geopolitical risk can impact their multinational’s operations. Hence, this article offers top managers a multi-level approach for the holistic assessment of geopolitical risk that can help them identify their multinational’s degree of exposure. This multi-level approach integrates insights of over one hundred top managers of multinationals, and involves conducting a tailored examination at the supranational, international, national, industry, and firm levels of analysis to factor geopolitical risk more effectively into strategic decision making.

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Section: Figure 1 Multi-level Approach For Assessing Geopolitical Riskmentioning

confidence: 99%

Assessing Geopolitical Risk: A Multi-Level Approach for Top Managers of Multinationals

Villa

2023

AIB Insights

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“…Equally important, most findings have overlooked the multi-level factors of overseas compliance risks and related complexities, leading to narrow and simplified interpretations. Existing research either focuses on chief executive officer characteristics at the individual level (Benischke et al , 2022) or considers the legal and regulatory environment at the institutional level (Manacorda, 2022). The above risk factors are all studied in isolation.…”

Section: Introductionmentioning

confidence: 99%

Overseas compliance risk prevention for multinational corporations in a law and economics perspective: empirical evidence from Chinese MNCs

Chen

Zhu

Wang

2023

MBR

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Purpose This paper aims to investigate whether executive compensation and internal control can prevent overseas compliance risks through the mediating influence of multinational corporation (MNC) legitimacy and the moderating role of institutional distance. Design/methodology/approach Based on a law and economics perspective and the “bad apple,” the “red barrel” and the “bad cellar” theory of business misconduct, this paper constructs a systematic framework of “compliance motivation MNC legitimacy overseas compliance risk prevention” from the individual, organizational and systematic levels and uses data of Chinese MNCs for empirical analysis. Findings Empirical data from Chinese MNCs show that overseas compliance risks are comprehensively affected by the factors of the individual, organizational and systematic levels. Higher executive compensation and internal control will reduce MNCs’ overseas compliance risks through MNC legitimacy acquisition; institutional distance hinders the positive effect of internal control on MNC legitimacy and therefore aggravates overseas compliance risks. Practical implications This paper contributes to the understanding of the overseas law-abiding and offence behavior of MNCs from a law and economics perspective and offers valuable insights on how to prevent the ever-increasing overseas compliance risks. Originality/value Although the literature has analyzed the factors of compliance behavior, they are not interrelated, let alone integrated in a systematic risk prevention framework. This paper applies a law and economic analysis framework to the study of the overseas compliance risks for the first time.

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“…When evaluating the advantages and risks associated with internationalization, past research has mainly focused on drivers of this strategic decision at institutional and organizational levels and largely failed to account for the role of top managers and their risk propensities (Benischke et al. , 2022; Buckley et al.…”

Section: Introductionmentioning

confidence: 99%

“…, 2016; Kano and Verbeke, 2019). Accordingly, a growing stream of research has revealed that CEO risk propensities reflect on their strategic choices, including internationalization (Benischke et al. , 2022; Boustanifar et al.…”

Section: Introductionmentioning

confidence: 99%

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CEO general work experience and FDI-based internationalization

2022

JSMA

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PurposeThe purpose of this study is to study the impact of the chief executive officer (CEO) general work experience on the level of firm internationalization in the form of foreign direct investment.Design/methodology/approachThe author collects and analyzes data on publicly traded US firms in the manufacturing sector from 1993 to 2012.FindingsThe author finds that CEOs with more general work experience tend to engage in a higher degree of foreign direct investment (FDI)-based internationalization. This relationship will be weakened by CEO stock ownership and enhanced by CEO Ivy League education.Originality/valueThis study enriches the understanding of the important role top managers play in internationalization decisions. The study also contributes to the literature on managerial risk-taking by exploring the outcomes of managerial risk-taking, which have been less studied than the antecedents.

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Towards a behavioral theory of MNC response to political risk and uncertainty: The role of CEO wealth at risk

Cited by 17 publications

References 72 publications

Assessing Geopolitical Risk: A Multi-Level Approach for Top Managers of Multinationals

Assessing Geopolitical Risk: A Multi-Level Approach for Top Managers of Multinationals

Overseas compliance risk prevention for multinational corporations in a law and economics perspective: empirical evidence from Chinese MNCs

CEO general work experience and FDI-based internationalization

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