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JIBS Call for Papers on The Outcomes of Foreign Divestment

  • 1.  JIBS Call for Papers on The Outcomes of Foreign Divestment

    Posted 09-25-2024 12:24

    Dear IM colleagues,

     

    Alex Mohr, Palitha Konara, Yingqi Wei, Stav Fainshmidt and I are excited to share the following Call for Papers for a Special Issue on The Outcomes of Foreign Divestment in the Journal of International Business Studies. More details follow below.

     

    We look forward to your submission!

     

    Best,

    Sebastian

     

    CALL FOR PAPERS

    Special Issue of the Journal of International Business Studies

    THE OUTCOMES OF FOREIGN DIVESTMENT AT THE FIRM, INDIVIDUAL, AND SOCIETAL LEVELS

    Special Issue Editors

    ·         Alex Mohr (alexander.mohr@wu.ac.at), Vienna University of Economics and Business, Austria

    ·         Palitha Konara (pk22596@essex.ac.uk), University of Essex, UK

    ·         Yingqi Wei (y.wei@leeds.ac.uk), University of Leeds, UK

    ·         B. Sebastian Reiche (SReiche@iese.edu), IESE Business School, Spain

    ·         Supervising Editor: Stav Fainshmidt (sfainshm@fiu.edu), Florida International University, USA

     

    Deadline for Submission: October 31, 2025

     

    Introduction

    Over the past decade, many multinational enterprises (MNEs) have either voluntarily[1]  or involuntarily[2]  divested their foreign operations in the face of rising geopolitical tensions and other global developments, such as the bifurcation/trifurcation of the world economy, the war in Ukraine, increasing protectionism and techno-nationalism, and the Covid-19 pandemic. These developments have been argued to lead to "slowbalisation" and a multi-polar world economy (Beugelsdijk & Luo, 2024, Economist, 2019, Evenett & Pisani, 2023, Li, Shapiro, & Ufimtseva, forthcoming, Tung, Zander & Fang, 2023). While global trade and investment flows seem to continue to rise, albeit at a slower pace, the divestment of foreign operations by MNEs has become more widespread, highlighting the need to advance our understanding of the firm-, individual- and society-level consequences they elicit (Sethuram & Gaur, forthcoming).

     

    Drawing on seminal work on foreign divestment (Boddewyn, 1979), there has been a significant increase in International Business (IB) scholars' interest in the topic. Foreign divestment is defined as the partial or full liquidation or sale of ownership stakes, assets or operations by an MNE in one or more of its overseas subsidiaries, including both majority-owned and minority-owned business units. Prior research on foreign divestment including subsidiary exit – a specific type involving the complete withdrawal or closure of a foreign subsidiary –  has focused on various internal and external factors driving the decision to divest or exit (for reviews see Ameyaw, Panibratov, & Ameyaw, 2023, Arte & Larimo, 2019, Coudounaris, Orero-Blat, & Rodríguez-García, 2020, Schmid & Morschett, 2020, and Sethuram & Gaur, forthcoming , as well as examples of recent studies, including Dai, Eden, & Beamish, 2023, Nguyen, Larimo, & Dow, 2024, or Niu & Wang, 2023). In contrast, there has been limited research into the possible consequences of foreign divestment. This is surprising not only because of the increasing prevalence of foreign divestment in MNEs' strategies, but also in light of the extensive research on the consequences of foreign direct investment (FDI). Investigating FDI outcomes is one of the key areas of IB research, with scholars extensively debating and studying its implications at the firm, individual, and societal levels (e.g., Reiche, Harzing, & Tenzer, 2022, Wiessner, Giuliani, Wijen, & Doh, 2024). This prior research stream suggests that foreign divestment likewise has significant effects at the firm, individual, and societal levels.

     

    Recent reviews of the literature on foreign divestment and subsidiary exit have highlighted the dearth of research on its firm-level consequences, despite the likely significant effects on the international strategy and structure of MNEs and their divested subsidiaries (Ameyaw, Panibratov, & Ameyaw, 2023, Arte & Larimo, 2019, Coudounaris, Orero-Blat, & Rodríguez-García, 2020, Schmid & Morschett, 2020). This is especially pertinent as MNEs increasingly reconfigure their global operations to adapt to evolving global business realities. The near absence of research into the firm-level consequences of foreign divestment is particularly surprising given the extensive research on the firm-level outcomes of FDI (e.g., Girma, Görg, & Kersting, 2019, Montiel, Cuervo-Cazurra, Park, Antolín-López, & Husted, 2021, van der Straaten, Pisani, & Kolk, 2020). The predominantly positive effects of foreign ownership on firms highlighted in core IB theory imply that foreign divestment might have negative consequences. If the strategy, operations, and performance of foreign subsidiaries depends on continuous flow of knowledge and services within the MNE networks and intra-firm trade with sister subsidiaries, the gains of FDI may disappear or decay post-divestment. Research has begun to draw on theories such as behavioral theory, organizational learning theory, institutional theory, and internalization theory to explore the relation of foreign divestment with various factors (e.g., Mohr, Batsakis, & Stone, 2018, Surdu, Mellahi, Glaister, & Nardella, 2018). However, many questions about the firm-level outcomes of foreign divestment and subsidiary exit remain. For example, although foreign divestment often carries a negative connotation, it might also create opportunities for the focal firms as well as for other firms, such as domestic firms. To focal firms, foreign divestment, voluntary or involuntary, can lead to strategic repositioning owing to MNEs' reassessment and adjustment of their international strategy and organization. Domestic firms may collaborate with foreign firms (in the case of partial divestments) or acquire previously foreign-owned firms. Through such collaborations and acquisitions, they might gain access to valuable firm-specific intangible assets. However, we understand very little about how MNEs' repositioning, whether through voluntary or involuntary foreign divestment, impacts both the MNEs themselves and other firms within their global supply chains. How do incoming domestic owners (re)structure and manage acquired subsidiaries, and how do they integrate them into their existing networks? How do rival firms (both domestic and other foreign firms) respond to MNEs' exit (Ren, Hu, & Cui, 2019)? Similarly, shifting patterns of foreign investment and divestment might necessitate a re-bundling of country-specific and firm-specific advantages, potentially requiring an extension of core IB theory (Luo, 2024).

     

    While the individual-level consequences of FDI have been studied with respect to managing human resources in MNEs, particularly internationally mobile employees (e.g., Froese, Stoermer, Reiche, & Klar, 2021), there is limited research on the individual-level consequences of foreign divestment. Research has investigated redundancies and employee displacement (and displaced employees' wages in their subsequent employment) resulting from the closure of foreign-owned subsidiaries (Jofre-Monseny, Sánchez-Vidal, & Viladecans-Marsal, 2017). Yet, the consequences of foreign divestment for individual managers and employees extend beyond the divested subsidiary, affecting other organizational units of the MNE. Expatriate managers at the divested subsidiary might have to be redeployed elsewhere within the MNE. Although research has explored the consequences of repatriation in general (e.g., Kim, Reiche, & Harzing, 2022), managers repatriating due to foreign divestment may face different challenges, such as greater stigmatization, compared to managers who repatriate after the end of an overseas assignment. Foreign divestments may constitute negative career shocks for expatriates and local employees. While initial research suggests that global professionals deal with major temporary disruptions to their existing work roles in both positive and negative ways (Reiche & George, 2024), we know little about how they experience sudden changes and discontinuities, and the resulting implications for their professional identity, career prospects, and motivation to engage in global work in the future (Akkan, Lee, & Reiche, 2022). Similarly, while global leadership research tends to examine the competencies, development interventions, and experiences that leaders need to grow into more senior global roles (e.g., Zander, 2020), less theoretical and empirical work examines the intrapersonal and interpersonal consequences of reduced global leadership responsibilities, or the implications and facilitating conditions of leading others through foreign divestment and workforce reduction. Foreign divestment decision-and the resulting changes to MNEs' global network of operations-may also alter a firm's location and character of its pivotal positions, the configuration and distribution of its talent pool, and its HRM architecture to adequately staff and develop for its pivotal positions (Collings, Mellahi, & Cascio, 2019). This highlights the need to engage with and expand the global talent management literature.

     

    Like FDI, an MNE's foreign divestment is likely to have effects at the macro- and societal level beyond the firms and individuals directly involved. In addition to the host country's loss of access to the MNE's foreign capital, resources, and managerial capabilities, liquidation/closures can have severe negative consequences on the society, including unemployment, income inequality, loss of tax revenue, economic instability, weakened community well-being and social cohesion. While there has been extensive research on the wider societal externalities (spillovers) associated with FDI (e.g., Kim, Sun, Yin, & Moon, 2022, Wei & Liu, 2006, Montiel, Cuervo-Cazurra, Park, Antolín-López, & Husted, 2021, Wiessner, Giuliani, Wijen, & Doh, 2024), we have a limited understanding of the effects of an MNE's foreign divestment on the local economy and the wider society. Only a small number of studies have addressed societal effects of foreign divestment (e.g., Jofre-Monseny, Sánchez-Vidal, and Viladecans-Marsal; 2018, Shi & Zhu, 2023). Given the importance of societal effects of FDI (Wiessner, Giuliani, Wijen, & Doh, 2024) and the increasingly important role of MNEs in sustainable development (Van Tulder, Rodrigues, Mirza, & Sexsmith, 2021), foreign divestment and subsidiary exit is likely to be societally impactful, hence we need more research on the societal outcomes of foreign divestment.

     

    This Special Issue aims to provide a forum for novel and impactful research that presents both theoretical and empirical insights into the outcomes of foreign divestment as a central, yet under-researched IB phenomenon. Our focus lies on MNEs and the consequences of their foreign divestment at the firm, individual, and societal levels. Specifically, we are looking for papers that provide an MNE-focused perspective and papers that are strictly policy-oriented or overly aggregate are not suitable for this Special Issue.

     

    Suggested Topics for Submission

    We encourage submissions that draw on a diversity of theoretical, paradigmatic and disciplinary approaches, empirical contexts and research methodologies to study the outcomes of both voluntary and involuntary foreign divestment, especially amid the recent global developments. Some of these recent developments (geopolitical fragmentation, techno-nationalism, industry 4.0 (4IR) technologies, increasing attention towards environmental, social, and governance (ESG) issues) may also shape how foreign divestment affects firms, people, industries, and societies. The Special Issue encourages conversations between IB scholars and scholars of different disciplines, e.g., economics, sociology, history, human resource management, and international relations/political sciences. We are particularly interested in manuscripts that examine the outcomes of MNEs' voluntary or involuntary foreign divestments in a rapidly changing global landscape and expand, adapt, or challenge theories pertinent to IB research, such as internationalization theory, institutional theory, the resource-based view, resource dependence theory, transaction cost theory, or behavioral theory (Ameyaw et al., 2023, Luo, 2024). We also encourage scholars to expand the existing theoretical repertoire of IB research to account for relevant attributes and outcomes of MNEs' foreign divestment. We seek contributions that address one or more of the following questions, as well as other questions that are closely related to the topic of the Special Issue. Overall, we strive for a balanced representation of contributions that examine firm-, individual-, and societal-level outcomes of MNEs' foreign divestment.

     

    1.      Firm-level outcomes of foreign divestment

    ·         What are the post-divestment strategies of MNEs? To what extent are divested operations replaced with alternative means to serve or source from host countries? If voluntarily divested operations are replaced with market-based transactions, under what conditions do the resultant benefits outweigh the additional transactions costs? Where are divested operations relocated (e.g., home country vs third country)? What types of operations are relocated, and do these choices vary by location? What are the short-term and long-term effects of foreign divestment on MNEs' organizational structure, financial stability, or operational flexibility?

    ·         Are foreign divestments a means for MNEs to reallocate resources to other foreign market entries? How can the resources released through foreign divestment be transferred and re-deployed in other parts of the MNE? What challenges are associated with an MNE's redeployment of various types of resources and how can MNEs retain or augment the value and utility of these redeployed resources? How/where do MNEs integrate/exploit these redeployed resources, and what are the implications of different resource redeployment strategies on firm performance?

    ·         To what extent can MNEs salvage resources depending on the divestment mode and timing of the divestment, and other characteristics such as the distance to the host country (Dai, Eden, & Beamish, 2017, Dai, Eden, & Beamish, 2023, Liu, Li, Eden, & Lyles, 2022)?

    ·         How does voluntary and involuntary foreign divestment differently affect MNEs' strategies, performance, geographic diversification, and operational flexibility? What are the implications of involuntary foreign divestment for MNEs' risk exposure and risk management? How do voluntary foreign divestments affect MNEs' external relationships and ties to policy makers and other stakeholders in host countries (Tandon, Asgari, & Ranganathan, 2023)?

    ·         How do the outcomes of foreign divestment vary by the mode (partial vs. full divestment) and timing (Dai, Eden, & Beamish, 2023), the method (liquidation, spin-off, vs. carve-out), the nature (e.g., voluntary vs. involuntary divestment, buyer driven vs seller driven sell-offs), and the characteristics of the host country at both sub-national and national levels (Dai, Eden, & Beamish, 2013)?

    ·         How do domestic firms improve their performance by acquiring formerly foreign-owned units/subsidiaries? What conditions determine/facilitate domestic firms' exploitation of acquired assets, e.g., by retaining employees? How or to which extent do domestic owners (re)structure and manage acquired units? How do they integrate acquired units within their internal networks?

    ·         What are the effects of the change of ownership from foreign to domestic or to a third country on the divested firm's performance, innovation, employment, wages, exports, corporate governance, sustainability, environmental practices and performance, and legitimacy?

    ·         Considering different types of buyers (e.g., state-owned enterprises, sovereign wealth funds, private firms, venture capitalists, family businesses, and other institutional investors) may have varying tendencies to acquire divested assets from MNEs, how do their approaches to acquiring and exploiting these divested assets differ?

    ·         What factors moderate post-divestment outcomes? For example, in what situations are MNEs more likely to experience reduced levels of post-divestment outcomes, and under what conditions can they improve their outcomes?

    ·         Foreign divestment decisions may not only affect the focal firm's future FDI, but also that of other firms because of firms' interdependencies or mimetic behavior (Chan, Makino, & Isobe, 2006, Soule, Swaminathan, & Tihanyi, 2014). Thus, how do rival MNEs (domestic and foreign) respond to MNEs' divestment decisions from specific markets?

    ·         How does foreign divestment affect an MNE's legitimacy, both at home and overseas? To what extent does the effect differ between voluntary and involuntary divestment?

     

    2.      Individual-level outcomes of foreign divestment

    ·         How (internationally) transferable is the specific human and social capital developed by managers and employees at the divested subsidiary? How does this experience impact expatriates' career trajectories and future employment prospects?

    ·         How do expatriates and local employees of divested subsidiaries experience and respond to foreign divestments? How do these divestments affect their status and career prospects, given that voluntary foreign divestments may be regarded as failures and managers may suffer from stigmatization in their future career trajectory both within and outside the divesting MNE? How does involuntary foreign divestment influence the career trajectories of employees who are displaced, and how does this compare to the career impacts of voluntary divestment?

    ·         How does foreign divestment affect the professional identities of expatriates and local employees? How do they adapt to significant changes to their work roles? Under what conditions do expatriates and local employees view foreign divestments as opportunities rather than threats to their professional identities?

    ·         How do foreign divestments influence expatriates' motivation to take on future global work assignments? To what extent are there differences between situations of involuntary and voluntary foreign divestment? How does the need to relocate after foreign divestment affect expatriates' work and family role adjustment in the new location? What happens to expatriates of divested subsidiaries? Do they return to headquarters, move to other subsidiaries of the MNE, or leave the MNE altogether? What happens to local employees of divested subsidiaries? Are they offered opportunities within the MNE's internal network? Which factors determine these outcomes?

    ·         How do recent developments such as geopolitical fragmentation, techno-nationalism, 4IR technologies, and ESG issues shape the individual-level outcomes of foreign divestment?

    ·         Which competencies, experiences or facilitating conditions enable global leaders to effectively lead expatriates and local employees through foreign divestment and unit closures? How do foreign divestments alter an MNE's HR strategy and global talent management architecture?

     

    3.      Societal outcomes of foreign divestments

    ·         What are the macro-level impacts of MNEs' foreign divestment and how do these impacts interrelate? The macro-effects of MNEs' foreign divestment could be potentially positive, e.g., creation of an additional pool of qualified employees that domestic firms can draw on (Sofka, Preto, & de Faria, 2014). Under what conditions can a MNEs' foreign divestment have positive outcomes for local communities, firms and individuals? To what extent do the effects of voluntary and involuntary foreign divestment on the economic stability or social infrastructure of host communities differ?

    ·         Which factors shape the nature of the macro-level effects of MNEs' foreign divestment? For example, how do factors, such as size, location, ownership structure, and entry/establishment mode of an investment affect the outcomes of an MNE's foreign divestment? Are the outcomes more pronounced for greenfield investments compared to acquisitions? Does the impact differ depending on the types of foreign divestment, the context in which the divestment takes place (e.g., voluntary vs involuntary divestments) (Cumming & Zahra, 2016) or on the nature of external force that led to an externally driven divestment , e.g., techno-nationalism?

    ·         To what extent does an MNE's' foreign divestment contribute to or impair various elements of sustainable development in host countries? Because MNEs could bring about negative effects to the host economy (such as corruption, anti-competitive behavior, non-ethical/exploitative behavior, pollution), how do these aspects manifest after an MNE's divestment? What are the differences in the effects between involuntary and voluntary foreign divestment?

    ·         How does foreign divestment affect MNEs' industry, as well as their upstream and downstream industries (e.g., in terms of industry-level competitiveness and restructuring)?

    ·         How do various key stakeholders, e.g., investors and governments, respond to foreign divestment? This is of importance because geopolitical changes might lead to a shift in MNEs' key stakeholders (Devinney, et al., 2013). For instance, research has shown that firms divest in response to stricter environmental regulation (Niu & Wang, 2023), but does such divestments reduce pollution in the divested location and/or merely shift pollution to other locations?

     

    Workshop and Symposium

    To help authors develop their papers, we intend to organize at least one, likely virtual, paper development workshop for authors who receive a revise and resubmit decision.

     

    Submission Process

    All manuscripts will be reviewed as a cohort for this special issue. Manuscripts must be submitted between October 17, 2025, and October 31, 2025, at http://mc.manuscriptcentral.com/jibs. All submissions will go through the JIBS regular double-blind review process and follow standard norms and processes.

     

    Questions about the Special Issue may be directed to the guest editors or the JIBS Managing Editor (managing-editor@jibs.net).

     

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    About the Guest Editors

    Alex Mohr is Professor of International Business at the Vienna University of Economics and Business (WU Wien), Vienna/Austria. His research interests include foreign divestments, corporate political strategies, the management and survival of international strategic alliances, and International Human Resource Management. His research has been published in journals such as Journal of International Business Studies, Strategy Science, Journal of World Business, Management International Review, International Business Review, Academy of Management Learning and Education, British Journal of Management, International Marketing Review, and Long Range Planning.

     

    Palitha Konara is Professor of International Business and Strategy at the University of Essex. His research interests include MNEs' foreign entry, foreign subsidiary operations/performance/innovation, and MNE's exit/divestment. His research has appeared in journals such as Journal of World Business, Journal of Retailing, Journal of Product Innovation Management, Global Strategy Journal, British Journal of Management, International Business Review, Journal of International Management, Journal of Business Research, Industrial Marketing Management, International Marketing Review, Asia Pacific Journal of Management, Management International Review and Technological Forecasting and Social Change. He is a recipient of the best paper award (the 'Danny Van Den Bulcke Prize') in the European International Business Academy 2019 conference. His recently funded work includes a project funded by the Welsh Government to research 'The Impact of foreign direct investment in Wales' and a project funded by the Department for International Trade to examine 'Foreign divestment in the UK'.

     

    Yingqi Wei is Professor of International Business at the University of Leeds. She has published extensively on topics related to the determinants and impact of foreign direct investment and the internationalization strategy of emerging market multinationals. Her research has appeared in journals of different fields including Journal of International Business Studies, Research Policy, British Journal of Management, Business History, Regional Studies, and World Development. She is CEIBS Best Paper Award Finalist for the International Management Division, Academy of Management 2020 Conference and the recipient for Highly Commended paper in European Journal of Marketing in the 2017 Emerald Literati Network Awards for Excellence, the Best Paper in International Marketing Track Award at both the 2011 and the 2012 Academy of Marketing Conference, the Best Paper Award of International Journal of the Economics of Business in 2010, and the Best Competitive Paper Award at the Academy of International Business (UK) 2005 Conference.

     

    B. Sebastian Reiche is Professor of Managing People in Organizations at IESE Business School, Spain. He is an expert on international assignments and forms of global work, knowledge transfer, culture and language in global organizations, and global leadership. Sebastian has received several research awards from the Academy of Management, including the International HRM Scholarly Research Award in two consecutive years, and the Journal of International Business Studies Silver Medal for his contributions to international business research. His research has appeared in journals such as Academy of Management Discoveries, Academy of Management Journal, Journal of International Business Studies, Organizational Behavior and Human Decision Processes, Organization Science, Personnel Psychology, and Journal of Management Studies, among many others, and has been featured in international press, such as The Economist, The Financial Times, Forbes, and BBC Capital. Sebastian has guest edited several special issues in academic journals, including in Journal of Management. He is Co-Editor of Advances in Global Leadership and regularly blogs on the topic of global work (https://blog.iese.edu/expatriatus/).

     

    Stav Fainshmidt (Florida International University) is an Associate Professor in the International Business Department at Florida International University's College of Business and a Reviewing Editor at the Journal of International Business Studies. His research interests lie primarily in the institutional environments surrounding domestic and multinational firms as well as in the change-oriented capabilities of firms. In addition, he has an interest in research methods. His research program is broad and multidisciplinary. His articles appear in journals such as Administrative Science Quarterly, Strategic Management Journal, Journal of Management, Journal of Management Studies, Organization Science, Journal of World Business, and Journal of International Business Studies.

     

     

    B. Sebastian Reiche, PhD

    Professor of People Management

    Co-Editor – Advances in Global Leadership

    IESE Business School

    Ave. Pearson, 21

    08034 Barcelona, Spain

    Tel: +34 93 602 4491

    sreiche@iese.edu

    Personal website

    Twitter: @sebastianreiche

    My blog on EXPATRIATION AND GLOBAL WORK

    Google Scholar profile