Should We Stay or Should We Go? MNE Decisions to Withdraw or Remain during Geopolitical Crises

Abstract

Geopolitical crises can create conflicting obligations for MNEs operating in now-hostile host countries, often requiring a strategic balance between home-country pressures to exit and the importance of continuing business in the present or retaining the option to re-enter business in the future. To identify such strategies and the country- and firm-specific characteristics informing such strategic decisions, I draw lessons from business history and an analysis of ongoing MNE responses to Russia’s invasion of Ukraine to provide insights into two specific options which managers can employ: namely, leveraging home country neutrality and relying on local partners to steward host-country operations. I also suggest steps managers can take to build resiliency for their MNEs in the event of future geopolitical crises.