首页|Operations locked-in amid geopolitical conflicts: A study of the 2022 Russo-Ukrainian war
Operations locked-in amid geopolitical conflicts: A study of the 2022 Russo-Ukrainian war
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NETL
NSTL
Elsevier
The rise in geopolitical conflicts has created unprecedented risks for firms, particularly in their operations and supply chains. In the wake of the 2022 Russo-Ukrainian War, many multinational enterprises have faced significant challenges in managing these risks, with some becoming "locked-in" to such high-risk regions as Russia. This study explores how firms manage operations under geopolitical conflict, with a focus on those unable to fully exit risky markets. Using a sample of U.S.-listed firms maintaining operations in Russia following the invasion, our propensity score matching and difference-in-differences analysis demonstrates that these firms have experienced undermined profitability. However, we find mixed moderating effects of different types of market dependencies. Firms with subsidiaries and suppliers in Russia experienced a more severe decline in profitability, while having customers in Russia served to mitigate this impact. Moreover, we explore the role of slack resources in alleviating the adverse effects, showing that firms with more operating and unborrowed slacks better maintained their financial performance. The findings contribute to the operations and supply chain management literature on geopolitical risks and resource dependence theory, while offering managerial implications for navigating operations under geopolitical conflicts.
NETL
NSTL
Elsevier
