"External Threats and MNE Strategy: The Role of Exposure, Resources and Coping Mechanisms".

Multinational enterprises (MNEs), when threatened by political violence in a host country, make different choices; some stay, others exit. What determines who stays and who leaves? We combine insights from the resource-based view, real options theory, and the climate change and environmental sustainability literatures to predict the likelihood, timing and mode of foreign exit in extreme contexts. Exit is argued to be a function of the MNE subsidiary's vulnerability, as determined by three factors: exposure to the threat, at-risk resources (i.e., their irreplaceability, which reduces the delayability of exit, and their immobility, which increases the irreversibility of exit), and coping mechanisms. Innovative geographic modeling of 626 Japanese MNE subsidiaries in 23 conflict-afflicted countries over 1986--2006 provides strong support for our arguments. Our findings suggest that valuable resources may become a firm's "Achilles' heel" in volatile environments, but that increased resilience is possible through the development of coping mechanisms. [ABSTRACT FROM AUTHOR]