Seminar - Corporate Isolation Vs. Global Immunity - MNE Internationalization and Resilience to The Covid-19 Pandemic
You are cordially invited to attend a research seminar by Jakob Müllner, Vienna University of Economics and Business. Follow the link in your calendar email invitations(Join Microsoft Teams Meeting) to join the seminar on Wednesday, 12th May at 13.00.
Our study is the first to analyse the relationship between systematic risk, uncertainty resilience, and firm-level internationalization. The COVID-19 pandemic provides a unique empirical laboratory to study the effects of firm-level internationalization on firms’ resilience to extraordinary shocks of uncertainty, and to distinguish these effects theoretically and empirically to firms’ ordinary systematic risk in times of low uncertainty. We study S&P 500 firms and show that – consistent with IB literature (Reeb, Kwok, & Baek, 1998) –internationalization increases normal, or ordinary, systematic risk of companies during periods of low uncertainty. In times of extraordinary shocks and non-ergodic uncertainty, however, the real options incorporated in MNEs, protect firms from abnormal value destruction and make them more resilient. Our findings contribute to IB literature by distinguishing different states of uncertainty and identifying antipodal effects of internationalization in these different states.