We are delighted to announce a new publication by Professor Dr. Dirk Holtbrügge, Dr. Marc Oberhauser, and Dr. Laura Kirste in the Journal of International Business Studies.
Their article, “Violent conflicts, institutional friction, and foreign divestment: The case of MNCs’ market exit from Russia,” examines how geopolitical conflicts influence multinational companies’ decisions to remain in or withdraw from foreign markets.
Drawing on data from 864 multinational companies operating in Russia, the authors develop and test a model of institutional friction that distinguishes between structural, situational, and operational sources of friction. The findings show that political relations between home and host countries, military threats, and companies’ institutional embeddedness jointly shape foreign market exit decisions. Economic sanctions, by contrast, do not directly lead companies to withdraw, but intensify the effects of other forms of institutional friction.
By offering a more dynamic perspective than traditional concepts of institutional distance, the study provides new insights into how multinational companies respond strategically to violent conflicts and rapidly changing geopolitical conditions.
The full article is available on the journal’s website.