The connections that bind: Political connectivity in the face of geopolitical disruption

Hartwell, Christopher A.; Zadorozhna, Olha

doi:10.1016/j.intman.2024.101141

Journal of International Management

2024

DOI: 10.1016/j.intman.2024.101141

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The connections that bind: Political connectivity in the face of geopolitical disruption

Christopher A. Hartwell,

Olha Zadorozhna

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2024

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Cited by 4 publications

References 88 publications

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The role of ESG in enhancing firm resilience to geopolitical risks: An eastern European perspective

Reyad,

Ayesha,

Iqbal

et al. 2024

Bus Strat Dev

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Geopolitical risk (GPR) presents a profound challenge to firms, particularly in regions with persistent political instability. In Eastern Europe, where conflicts like the Russia–Ukraine war heighten uncertainty, firms face immediate financial threats and long‐term strategic vulnerabilities. This study examines the impact of GPR on firm performance, focusing on the moderating role of environmental, social, and governance (ESG) practices as a resilience mechanism. Using a comprehensive dataset of 1360 publicly listed firms across Poland, Russia, and Ukraine from 2014 to 2023, the analysis employs a base panel data regression model, followed by a two‐step generalized method of moments (GMM) approach to account for endogeneity and ensure robustness. The findings reveal a significant negative relationship between GPR and firm performance, measured by return on assets (ROA). Firms exposed to higher geopolitical risks exhibit weaker profitability. However, firms with stronger ESG performance demonstrate greater resilience, as the GMM results show that ESG engagement moderates the adverse effects of GPR on profitability. This suggests that ESG initiatives enhance adaptive capacity in volatile geopolitical environments. In terms of policy implications, ESG should be promoted as a key strategy for firms operating in politically unstable regions. Governments and regulatory bodies may consider mandatory ESG disclosures and incentivizing sustainability practices to help firms mitigate external risks, improve financial resilience, and attract stable investment. Aligning corporate strategies with global ESG standards is essential to ensuring business sustainability amid ongoing geopolitical threats.

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The role of ESG in enhancing firm resilience to geopolitical risks: An eastern European perspective

Reyad,

Ayesha,

Iqbal

et al. 2024

Bus Strat Dev

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Diplomacy and MNE strategy: how international relations can influence international business

Hartwell,

Ursprung

2024

MBR

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Purpose This study, a perspective piece, aims to argue that one particular slice of political institutional operations – the conduct of international relations – offers a clue to the possible risks that businesses face from geopolitics. Design/methodology/approach The authors examine the various facets of international relations and diplomacy, including the processes and arenas, to show the relevance of statecraft for firms looking to minimize political risk. Findings By understanding the role of diplomacy and statecraft as a process, firms can better prepare themselves for events that have far-reaching ramifications. This is very different than minimizing risk from inherent geopolitical tensions and allows for a more flexible approach to understanding risk levels in the global arena. Originality/value International business scholarship has focused on institutions and their effects on firms and has recently begun to re-examine the role of geopolitics and political risk on firm performance and decisions. However, the current literature continues to have a superficial understanding of institutional processes and their impact on business, especially when it comes to the daily workings of political institutions.

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International High‐Tech SMEs Amid Geopolitical Pressures

Sinani,

Zilja

2024

British J of Management

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In the wake of increased geopolitical tensions, we investigate the impact of geopolitical risk on the investments of international high‐tech small and medium‐sized enterprises (SMEs). Prior research on SME internationalization has primarily emphasized the importance of home and host‐country institutions and political risk, with limited attention given to geopolitical risk as a distinct contextual factor. Drawing on international relations literature, we posit that geopolitical risk, captured by diplomatic relations between home and host countries, creates political legitimacy concerns for international high‐tech SMEs, discouraging their international investments. This effect is contingent on SME innovation (through patents) and the scope of international diversification. Analysing data from international high‐tech SMEs and their subsidiaries for the period 2009–2022, we find consistent evidence for our hypotheses.

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The connections that bind: Political connectivity in the face of geopolitical disruption

Cited by 4 publications

References 88 publications

The role of ESG in enhancing firm resilience to geopolitical risks: An eastern European perspective

The role of ESG in enhancing firm resilience to geopolitical risks: An eastern European perspective

Diplomacy and MNE strategy: how international relations can influence international business

International High‐Tech SMEs Amid Geopolitical Pressures

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