Decoupling in international business: The 'new' vulnerability of globalization and MNEs' response strategies

VC Cui (First Author), I Vertinsky (Participant Author), YG Wang (Participant Author), DS Zhou (Participant Author)

Research output: Contribution to journalJournal

6 Citations (Web of Science)

Abstract

What can MNEs learn from the COVID-19 pandemic? IB scholars have provided ample insights into this question with many focusing on risk management. Complementing these insights, we argue that MNEs should also consider the long-lasting effect that COVID-19, inter alia, had on the institutional logic underlying globalization. The U.S. and its allies have redefined their logic from pursuing cost-reduction to building partnerships based on shared value, aiming to substitute China's role in the world economy. The geopolitical pressure for decoupling from China is the source of 'new' vulnerability of globalization. Such pressure is counteracted by economic rationality, creating unsettled priority between the globalization and deglobalization logics at the macro-level institutional space. Combining both risk-management and institutional logic perspectives, we develop a more comprehensive framework on how MNEs should respond to these challenges. This paper contributes to the debate regarding the impact of COVID-19 on globalization, suggesting that neither globalization nor deglobalization logics will prevail in the short run, and IB will likely be more fractured in the long run, based on not only geographic but also ideological and value propinquity. In strategic sectors, the balance will shift toward bifurcation while in others the balance will shift toward the globalization logic.
Original languageEnglish
Pages (from-to)1562-1576
Number of pages15
JournalJournal of International Business Studies
Volume54
Issue number8
Early online date21 Feb 2023
DOIs
Publication statusPublished - 2023

Corresponding author email

victor.cui@uwaterloo.ca

Project sponsor

Social Sciences and Humanity Research Council of Canada

Project No.

430-2020-00938
435-2017-1301

Keywords

  • COVID-19
  • MNE strategy
  • Decoupling
  • Deglobalization
  • Globalization
  • Institutional logic

Indexed by

  • ABDC-A*
  • FT
  • SSCI

Fingerprint

Dive into the research topics of 'Decoupling in international business: The 'new' vulnerability of globalization and MNEs' response strategies'. Together they form a unique fingerprint.

Cite this