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| Author: | Oh, C.H. Oetzel, J. |
| Title: | Multinationals' response to major disasters: how does subsidiary investment vary in response to the type of disaster and the quality of country governance? |
| Journal: | Strategic Management Journal
2011 : JUN, VOL. 32:6, p. 658-681 |
| Index terms: | Europe multinational companies subsidiary companies investment institutions risk disasters terrorism |
| Freeterms: | country governance quality |
| Language: | eng |
| Abstract: | This paper explores multinational corporations' (MNCs) response to major disasters at the subsidiary level. Examined are the disaster's type and severity and whether and how country governance moderates the relationship btw. exogenous disaster risk and subsidiary investment. The hypotheses are tested using a panel dataset of over 70 large European MNCs with their subsidiaries (2001-2006) including more than 31,000 total observations. Based on the findings, it is suggested that the number of a firm's foreign subsidiaries is likely to decrease in response to terrorist attacks or technological disasters but not natural disasters. For terrorist activities, MNC subsidiary-level disinvestment is less likely when the host country governance quality is higher. |
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