The decarbonization of carbon-intensive industries presents a critical challenge for firms and policymakers. While incumbent firms possess the resources and capabilities to lead these transitions, they frequently face economic and institutional barriers that delay adaptation. When incumbent firms attempt to reconfigure their core assets to respond to industry disruption, they often face pressure from financial markets to maintain their existing strategy. Prior research suggests that such pressures may mitigate over time as the need for adaptation becomes more accepted. However, less is known about how incumbents are variably exposed to these pressures and the underlying drivers of a shift in investor reactions. Building on research on incumbent adaptation and stakeholder management, we argue that technological commitment contributes to firm-specific exposure to inertial pressures, while convergence in economic interests and normative values helps to align adaptive organizations with investors. Greater levels of technological displacement and shareholder activism lead investors to react more favorably to retirements related to an incumbents’ core technology. On the other hand, investors favor more proactive retirements by incumbents with peripheral exposure to the technology. We find support for our arguments from an event study of decisions to retire coal generators by U.S. investor-owned electric utilities from 2008 to 2018. Our results contribute to understanding challenges with incumbent adaptation to industry disruption, as well as the urgent issue of climate change mitigation by highlighting how financial markets can shape the decarbonization trajectories of carbon-intensive incumbents.

This paper explores the complex interplay between political systems, foreign direct investment (FDI), and income inequality. Building on Acemoglu and Robinson’s Nobel Prize-winning work on institutions, we develop a framework to analyze governments’ political incentives to attract FDI. We argue that highly entrenched autocracies, facing little internal competition for rents, and democracies with strong political competition, eager to secure growth for electoral advantage, exhibit strong incentives to attract FDI. In contrast, weaker autocracies with internal competition for rents and entrenched democracies, where rulers face less pressure to deliver growth, have lower incentives to do so. Rising inequality introduces an additional layer of complexity: while democracies may encounter public resistance to FDI when its benefits are perceived as unevenly distributed, autocracies remain less constrained by public opinion. We analyze data from 144 countries spanning 1990–2018, assessing how political incentives shape FDI inflows and their subsequent impact on economic growth. Our findings suggest that in democracies, robust political competition underpins a country’s incentive to remain attractive to investors, while autocracies require regulatory stability and credible long-term commitments to achieve this outcome. Ultimately, our research underscores a paradox—democratic freedoms, though vital, may at times hinder economic competitiveness relative to autocratic regimes.

Global value chains (GVCs) generate efficiency through production fragmentation but simultaneously create sustainability vulnerabilities that can undermine GVC resilience. While MNE buyer-led private ordering and state regulation represent the primary governance responses to these risks, their effects on supplier compliance remain contested. We develop a domain-sensitive governance framework showing that labor and environmental compliance differ systematically in their cost–benefit structures, and which in turn shape the effectiveness of governance forms in driving compliance across sustainability domains. Using a panel of over 2000 suppliers across emerging economies, we find evidence for the asymmetric effectiveness of governance forms across compliance domains. In the labor domain, both regulation and private ordering improve compliance, as stronger labor regulations increase MNE sourcing and reinforce suppliers’ incentives to upgrade. In contrast, in the environmental domain, while private ordering improves compliance, stringent environmental regulation reduces MNE sourcing, weakening suppliers’ incentives to invest in environmental improvements. We identify a buyer–regulation intermediation mechanism through which regulatory stringency shapes supplier compliance indirectly by altering MNE sourcing strategies. Our findings advance GVC governance research by showing that sustainability compliance, and thus resilience, depends not only on governance instruments but also on domain-specific incentive structures and buyer-mediated governance dynamics.

This study develops the concept of ‘urban-suburban connectivity’ among inventors within metropolitan areas and examines its impact on innovation quality. Using comprehensive patent data from Philadelphia, Pittsburgh, and San Diego (2008-2017), we analyze 93,689 patents to test whether urban-suburban connectivity, operationalized as inventor teams spanning urban cores and suburban areas, produces higher-quality innovations, measured by forward citations. Using two-stage least squares to address endogeneity concerns, our results show that urban-suburban connectivity significantly boosts innovation quality, generating approximately 6.5 additional forward citations. This increase arises from the demographic diversity and cognitive distance between these areas that foster knowledge recombination. Its impact is moderated by firm characteristics: large corporations and foreign MNEs derive less value from these local links than local and small firms because their expansive geographic footprints already provide access to the diverse perspectives necessary for their corporate innovation systems. The study contributes to the international business and innovation geography literatures by introducing intra-metropolitan connectivity as a novel dimension of spatial proximity. We emphasize that bridging urban-suburban divides benefits the innovation performance of small, local firms relatively more than that of large MNEs. These findings provide relevant guidance for managers and policymakers interested in fostering economic development.

Research SummaryPowerful geopolitical, demographic, cultural, and technological forces are reshaping MNEs' markets, compelling them to be entrepreneurial in order to successfully adapt and grow. We argue that MNEs can leverage digital technologies to exploit their resources, especially mobile resources, to fuel and infuse entrepreneurship throughout their operations. By leveraging and exploiting mobile resources, digital technologies make it possible for MNEs to cultivate their entrepreneurial activities to create new knowledge, build valuable organizational capabilities, and develop new businesses. These arguments contribute to ongoing conversations about the growing role of entrepreneurship in MNEs, the value of mobile resources as a source of competitive advantage, the transformative role of digital technologies in the global marketplace, and IB theories on the sources of MNEs' competitive advantage in dynamic markets.Managerial SummaryIn today's rapidly changing global business environment, multinational enterprises (MNEs) face unprecedented challenges from geopolitical shifts, demographic changes, cultural evolution, and technological disruption. To thrive amidst these transformations, MNEs must embrace entrepreneurship throughout their global operations. This research demonstrates how MNEs can strategically use digital technologies to unlock the value of their mobile resources-including talent, knowledge, and capabilities that can be deployed across locations-to foster entrepreneurship enterprise-wide. By effectively leveraging these mobile resources through digital platforms, MNEs can: Generate new knowledge across geographic boundaries Build distinctive organizational capabilities that competitors cannot easily replicate Develop innovative business models and ventures that create value in dynamic markets Our findings offer practical guidance for multinational executives seeking to enhance their firms' entrepreneurial capacity in a digital era. By intentionally combining mobile resource deployment with digital enablement, MNEs can create sustainable competitive advantages even as markets continue to evolve rapidly. This approach represents a crucial adaptation strategy for multinational firms navigating today's complex global business landscape.Managerial SummaryIn today's rapidly changing global business environment, multinational enterprises (MNEs) face unprecedented challenges from geopolitical shifts, demographic changes, cultural evolution, and technological disruption. To thrive amidst these transformations, MNEs must embrace entrepreneurship throughout their global operations. This research demonstrates how MNEs can strategically use digital technologies to unlock the value of their mobile resources-including talent, knowledge, and capabilities that can be deployed across locations-to foster entrepreneurship enterprise-wide. By effectively leveraging these mobile resources through digital platforms, MNEs can: Generate new knowledge across geographic boundaries Build distinctive organizational capabilities that competitors cannot easily replicate Develop innovative business models and ventures that create value in dynamic markets Our findings offer practical guidance for multinational executives seeking to enhance their firms' entrepreneurial capacity in a digital era. By intentionally combining mobile resource deployment with digital enablement, MNEs can create sustainable competitive advantages even as markets continue to evolve rapidly. This approach represents a crucial adaptation strategy for multinational firms navigating today's complex global business landscape.

Multinational enterprises (MNEs) operate in a complex environment characterized by the interplay of macro factors from the external environment and firm-specific micro factors. Both sets of factors have important temporal elements, specifically industry clock speed at the macro level and firm activity duration at the micro level. We argue that the temporal alignment of these factors has a crucial effect on firm performance. We explore the theoretical foundations of this phenomenon and propose the concept of temporal coupling as a mechanism for resolving temporal misalignments. Temporal coupling is defined as the ability of an MNE to effectively synchronize its internal processes with external temporal rhythms. The effective implementation of temporal coupling is a higher-order adaptive capability that provides competitive advantage in global value chain organization.

Despite the increasing recognition of digital globalization in international business (IB) literature, there is a more pressing need for a comprehensive understanding of the unprecedented power generated by big-tech multinational enterprises (MNEs). This paper suggests that harnessing data ubiquity globally, instantaneously, and continuously represents a defining feature and a revolutionary power source for big-tech MNEs. By leveraging global data value chains through a mutually reinforcing data-AI feedback loop of data access, analysis, and application, big-tech MNEs can reshape IB practices and challenge global regulatory frameworks. Drawing on power-dependence theory, our research framework highlights a logic of power mutuality characterized by the interplay between power generation and power counterbalance. These two forces provide a holistic lens for examining how big-tech MNEs create data-based power, but are simultaneously countered by the economic and sociopolitical stakeholders of big-tech MNEs. We propose promising avenues for future research on MNEs’ data strategies, global data value chains, foreignness and liabilities of data, and global data governance.

Tightening immigration policies worldwide are disrupting multinational enterprises’ ability to recruit global R&D talent for colocated teams. Research shows that the innovation output of dispersed teams is lower than that of colocated teams, but companies can adapt using four strategic approaches: immigration arbitrage, modularization, flexible orchestration, and regional ecosystem integration. These strategies can help teams maintain innovation excellence while navigating mobility constraints.

This paper explores the intersection of international business and economic geography through the lens of connectivity and complementarity of locations. Both facets are leveraged by economic agents like multinational enterprises (MNEs). Complementarity highlights the value created by integrating diverse locational assets, addressing why locations are connected, while connectivity focuses on how linkages are established and maintained. Our framework highlights the reciprocity between the dimensions of complementarity and connectivity to foster intellectual dialogue between the two fields of international business and economic geography. Disrupted global value chains and the digital transformation of economic activities are substantially reshaping the complementarity and connectivity of locations. In this context, we emphasize the need to incorporate technological, socio-political, environmental, and geopolitical dimensions into the analysis of MNE-location interaction.

This study investigates how multinational enterprises (MNEs) leverage cross-border innovation to enhance their capacity for orchestrating global value chains (GVCs). Grounded in systems integration theory, and using the context of the aircraft engine industry of the aerospace sector, we propose that architectural knowledge is imperative for MNEs to orchestrate their GVCs. This leads us to hypothesize that orchestrating MNEs possess a broader technological scope and a wider range of cross-border innovations compared to other firms. Moreover, we demonstrate the rising complexity and interdependency of the sector’s technological system and conjecture that this increases the scope advantage that orchestrating MNEs need over other firms. To test these hypotheses, we analyze a unique longitudinal dataset on formal inter-firm linkages from 2002 to 2014. Our findings provide empirical support for our theoretical predictions.

In the paper, we integrate the research on co-mobility and individual outcomes with the literature on organisational failure and negative social evaluation by studying employees’ career evolution following co-mobility triggered by a sudden organisational failure. We theorise and uncover evidence of decreased promotion odds for co-mobile employees in the wake of organisational failure, lending support to co-mobility as a useful tool to secure a job, albeit at a cost, especially for seniors. We further explore the effects of intra- and inter-industry moves for juniors and seniors and find that for juniors, strategies that resulted in finding jobs relied on both co-mobility and solo moves within and outside of the focal industry. Although their social and human capital is more generic, juniors frequently acted as team builders and co-mobility orchestrators, as supported by our qualitative evidence. Seniors managed to avoid negative social evaluations even when moving solo within the focal industry, a strategy they used frequently, even in comparison to co-mobility. We test and find evidence for our theorising with the use of proprietary hand-collected data on 185 junior and senior employees who secured jobs in various countries and industries after an exogenous organisational failure in the bunker trading industry.

Global connectivity represents a critical enabler of progress as it contributes to the exchange of goods, knowledge, and ideas across organizational and national borders. Technology- and humanbased networks are the prime drivers of connectivity. The development of information and communication technologies, together with the movement of people across borders, has dramatically accelerated collaboration on a global scale, fostering innovation, cultural exchange, and economic prosperity. Yet, connectivity is a double-edged sword. The increasing interconnectedness of our world also uncovers the liability of global connections, which renders countries and organizations more vulnerable to disruptions, particularly under certain conditions. We discuss how different forms of connectivity face distinct threats when disruptions occur, depending on the source and predictability of such disruptions. A key pillar of our analysis is the focus on the complex interplay between human and technological factors in shaping our interconnected world and the implications for firms, especially multinational enterprises (MNEs). Carefully analyzing the composite portfolio of connectivity by balancing the technological and human factors is a core strategic requisite to ensure resilience and renewal for MNEs in a complex, interconnected world. We provide a more comprehensive perspective on global connectivity in the international business context to understand the complexities of disruptions. Building on a rich foundation, we offer an agenda outlining new avenues for future research to improve our collective understanding of global connectivity in a world of disruptions.

Since its inception in the 1990s, research on modularity has expanded along changes in technological markets, such as the increasing pace of innovation and the reduction in prior forms of coordination. One main contribution of research has been to show numerous instances of modularity's influence on competition. These include allowing small firms to incubate innovations before suddenly disrupting markets, and enabling the rise of co-opetition strategies that generate network effects. These early days of modularity research culminated in Baldwin and Clark's (2000) fundamental book and its depiction of modularity as an efficient coordination mechanism. They established modularity as an important field of research and seeded the promise of a "modularity revolution." Advances in material knowledge, innovative contractual arrangements, and deregulation held the promise of a spread of modularity across all industries.

We argue that the degree of concentrated ownership of international knowledge connections of a city in the hands of a small number of MNEs reduces the potential for knowledge spillovers and has a negative influence on the attractiveness of a city for new R&D investments. Ownership concentration in international knowledge connections reduces the positive influence of two complementary characteristics of international knowledge connectivity: the international connectedness ("depth") and the geographical diversity ("breadth") of the cities' international knowledge networks. Our analysis of the location decisions for 3235 new cross-border R&D investments made by 1599 firms distributed across 71 global cities (2003-2016) provides support for these hypotheses.

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High-skill migrant workers significantly contribute to advanced economies by directly generating knowledge-intensive assets and serving as bridges to knowledge in their origin countries. However, rising populist sentiment has led to increased immigration restrictions in wealthy economies like the U.S. and the Europe Union. This study examines the impact of the 2004 H-1B visa cap reduction on U.S.-based multinational enterprises (MNEs). We use a sample of 371,856 patents assigned to 707 U.S.-based MNEs. We find that post-shock, MNEs increased the geographic dispersion of their global R D workforce, rather than replacing foreigners with local American workers. Despite this, the firms experienced a decline in innovation performance, likely due to elevated coordination challenges. Interestingly, sectors relying more on codified knowledge demonstrated increased R D team dispersion with less impact on innovation. This suggests that the geographic proximity of innovation teams is crucial for tacit knowledge-intensive sectors. These findings highlight the complex consequences of immigration restrictions and suggest boundary conditions on the effectiveness of work-from-anywhere models in knowledge-intensive industries.