Volatility of Political Affinity and Subsidiary Investments

Christopher Albert Sabel, Flladina Zilja, Gilbert Kofi Adarkwah

Research output: Chapter in Book/Report/Conference proceedingConference abstract in proceedingsResearchpeer-review


We investigate the effect of volatility in political affinity on multinational firms' foreign subsidiary investments. We extend prior work that focuses on the level of political affinity and argue that volatility in political affinity equally affects multinational firms' foreign investments. While research showed that levels of affinity are positively related to multinational firms' investment, we argue that volatility negatively affects subsidiary investment as it increases environmental uncertainty for multinational firms in foreign locations. Further, we show that the interplay of the level and the volatility of affinity and firms' experience in high-volatility countries affects overall investment, providing greater insight into multinational firms' investment patterns. Analyzing 1,078 U.S. public firms and their subsidiaries in 106 countries from 2000 to 2015, we find support for our hypotheses.

Original languageEnglish
Title of host publicationProceedings of the Eighty-second Annual Meeting of the Academy of Management
EditorsSonja Taneja
Number of pages1
Place of PublicationBriarcliff Manor, NY
PublisherAcademy of Management
Publication date2022
Publication statusPublished - 2022
EventThe Academy of Management Annual Meeting 2022: Creating a Better World Together - Seattle, United States
Duration: 5 Aug 20229 Aug 2022
Conference number: 82


ConferenceThe Academy of Management Annual Meeting 2022
Country/TerritoryUnited States
Internet address
SeriesAcademy of Management Proceedings

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