The Impact of Political Radicalization on Firms’ Ownership Strategies Abroad

Oliveira, Diana Neto

http://hdl.handle.net/10400.8/13880

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Authors

Oliveira, Diana Neto

Advisor(s)

Santos, João Neves de Carvalho

Reis, Nuno Manuel Rosa dos

Abstract(s)

This study investigates the relationship between political radicalization and ownership strategy within the European Union, while also examining the moderating effect of firm size. Using a sample of 2270 headquarters and 83207 subsidiaries from European Union based firms, we apply an Ordinary Least Squares (OLS) regression analysis to test our hypotheses. Our findings indicate that higher levels of political radicalization strengthen firms' ownership strategies. Additionally, in politically radicalized environments, larger companies have better ownership strategies than SMEs, since they can more easily mitigate the negative effects of such extremism. These insights contribute to the International Business literature by highlighting the implications of rising radicalism in Europe. As political extremism gains momentum, firms must understand how these dynamics influence their international operations and adjust their strategies accordingly.