Internationalisation and risk: Literature review, integrative framework and research agenda

Managing uncertainty during a global pandemic: An international business perspective

“…As a result, there is a limited understanding of the impact of uncertainty in the international business environment, and in particular, how it may influence the performance of different businesses based on their unique conditions. For example, one of the main challenges in international business is the assessment of the impact of uncertainty when the risks are interconnected and asymmetric (Bekaert, Harvey, Lundblad, and Siegel, 2014; Buckley, Chen, Clegg, & Voss, 2016), including macro risks that affect most firms and micro risks that only impact a few firmscontingent upon their origin (Eduardsen & Marinova, 2020). Most small firms do not even attempt to assess some types of uncertainty (e.g., political and economic) as these may not affect them directly and/or due to the unstructured and subjective nature of their assessment methods (Oetzel, 2005).…”

“…Most small firms do not even attempt to assess some types of uncertainty (e.g., political and economic) as these may not affect them directly and/or due to the unstructured and subjective nature of their assessment methods (Oetzel, 2005). Moreover, they may rely on the managers' own judgment and expert opinion that could be biased and subjective (Eduardsen & Marinova, 2020), as exhibited by the inability of the governments in many countries to anticipate and control the spread of Covid-19 despite having proper pandemic plans in place for many years. For example, public health managers and political leaders have launched programs and initiatives after every major health crisis in the US in the last two decades but most of these "programs were defunded, staff was allowed to depart and Washington forgot the stark lessons it had just learned" (Diamond, 2020).…”

“…For example, risk is generally defined as an uncertain event or condition associated with doing business in foreign markets that can have a negative effect on the firm (Miller, 1992), while uncertainty is defined as the lack of knowledge about the probabilities of the future state of events that may influence the firm (Knight, 1921). Firms involved in international business have to manage different types of risks, such as political, country, foreign exchange, and cultural threats (Eduardsen & Marinova, 2020). Similarly, uncertainty affects firms' choice of path and entry mode for internationalization, speed of international expansion, and commitment to internationalization (Magnani & Zucchella, 2019).…”

The influence of perceived host country political risk on foreign subunits' supplier development strategies

“…There is no single or universal definition of political risk (Agarwal & Feils, 2007; Fitzpatrick, 1983; Kobrin, 1979); however, it generally refers to uncertainty surrounding events and processes in the political environment that have repercussions on the business community (de Mortanges & Allers, 1996). When MNCs venture abroad, they may face additional risks related to the host political environment (Eduardsen & Marinova, 2020). In this context, political risk has been defined as “the risk that a sovereign host government will unexpectedly change the ‘rules of the game’ under which businesses operate” (Butler & Joaquin, 1998, p. 599).…”

“…Quantitative studies use country risk indicators such as the International Country Risk Guide 4 and the Political Constraint Index, 5 which measure potential political instability and policy credibility. Political risk ratings can inform foreign firms about the political climate affecting foreign investment in the host country; however, these country risk indicators have been criticized for considering the risk to be identical for all foreign firms (Kobrin, 1979; Quer, Claver, & Rienda, 2018) and ignoring the importance of perceptions in strategic‐decision making (Buckley, Chen, Clegg, & Voss, 2016; Eduardsen & Marinova, 2020). Prior research (Mshelia & Anchor, 2019; Oetzel, 2005) found that MNCs relied more on managerial perceptions and expert opinions than on cross‐country indices when assessing political risk.…”