Year: 2022
Type: article
Abstract: The sudden COVID-19 pandemic sent shockwaves through international markets. This paper studies the relation between multinationality and risk. While IB literature agrees that internationalization, in times of relative stability, increases systematic risk, we argue that internationalization also improves resilience against exogenous shocks. Leveraging the sequential COVID-waves as a unique empirical laboratory, we show that although multinationality causes liability of foreignness that increases systematic risk, it also generates an asset of multinationality that enhances shock resilience. Yet this advantage of internationalized firms gradually erodes as less internationalized firms learn about the shock and investors adapt their valuations to the post-shock reality.
Source: Journal of World Business
Authors: Harald Puhr, Jakob Müllner
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $4,010
OpenAlex ID: W4285585453