Drawing on research on the microfoundational processes affecting the roles of strategic leaders in international business and research on political psychology, we explore how the political ideology of the CEO influences firm FDI decisions. Asymmetries between liberals and conservatives in their epistemic motives, relational motives, and dispositional preferences interact with the additional sources of bounded rationality in a multinational context to influence internationalization strategy. Specifically, we argue that firms led by liberal CEOs engage in more FDI than those led by conservative CEOs because (1) they are more likely to direct their attention abroad, and (2) they are more likely to find opportunities abroad attractive. Moreover, because internationalization decisions require the approval of multiple stakeholders, the managerial ability of the CEO to legitimize their preferences serves as a key moderator of this relationship. Finally, integrating additional insights from the literature on home-country institutions, we find that the divergence between CEO ideologies and the national political institutions in their home country can lead to increases in FDI. We test our hypotheses using an unbalanced panel of 455 firms in years 2009-2020. Overall, we find support of our hypotheses which underscore the importance of the CEO’s political ideology in influencing firm internationalization.

We elucidate the moderating impact that the foreign subsidiary’s internal technological embeddedness plays on the relationship between the foreign subsidiary’s innovation performance and its foreign divestment propensity. Because the innovation capabilities of firms are important means to build/sustain competitive advantages, increase overall organizational performance, and are hence considered crucial for foreign subsidiary survival, we hypothesize that there is a negative relationship between a foreign subsidiary’s innovation performance and its foreign divestment probabilities. Moreover, we aim to elucidate under which conditions this negative association can be weakened. To answer this puzzle, we integrate the business network view and the resource dependence theory to propose that the internal technological embeddedness of foreign subsidiaries within their internal MNE networks, as a strategic valuable resource, matters in the subsidiary’s innovation performance – foreign divestment relation. Previous research has treated foreign divestment as an aggregated construct, not differentiating its various forms, leading to an oversimplification of the phenomenon. Responding to a call, we focus on two types of foreign divestments: full foreign divestment through subsidiary sales and subsidiary liquidations/closures. We test our hypotheses in a sample of 1,056 foreign-owned subsidiaries operating in a European country over the period from 2008 to 2016.

Geopolitical conflicts pose challenges for multinationals with operations in conflicting countries, as they have to provide legitimate justifications for their actions and decisions under the scrutiny of stakeholders and the international community. This study explores the co-construction of corporate (il)legitimacy during a geopolitical conflict. We trace the legitimation-seeking process in the case of a Finnish multinational that, prior to the Russian attack on Ukraine, had the majority of its manufacturing in Russia. We analyze how corporate (il)legitimacy was co-constructed in a discursive interaction between the multinational seeking to legitimize its presence in Russia and the media questioning and problematizing the multinational’s actions. We show that (il)legitimacy is co-constructed through a range of legitimation strategies employed by both the multinational and the media. It consists of both the discursive realm that provides the discursive and rhetorical resources for the strategies (e.g., moral arguments) and the material realm that frames the strategies by enabling or constraining their potency (e.g., consumer boycotts). Our analysis shows that while the multinational’s actions in Russia were co-constructed as relatively legitimate in the first months after the invasion, changes in the material realm of legitimation tilted the co-construction toward illegitimacy, leading the multinational to exit from Russia.

Although business school internationalization is not a novel development, it remains inadequately explained conceptually. Previous studies have predominantly delved into specific cases, lacking comprehensive theoretical underpinnings for this growing trend. In this study, we adopt one of the fundamental theories of international expansion, the eclectic paradigm, to investigate how top business schools establish their regional and global presence. Leveraging insights from the literature on knowledge-intensive multinationals (KIMs), we shed light on the process and demonstrate that business schools expand into global cities with robust connectivity to mitigate the liability of outsidership through concerted networking efforts. We refer to this pattern as OLIN: Ownership-Location-Internalization-Network.