 A new side of deglobalization: Why did US multinational corporations deconsolidate their subsidiaries from Venezuela?Norma Ortiz, Carlos Jaramillo Zambrano, Urbi Garay and Diego F. Tellez-Falla Journal of Business Research, 2024, vol. 182, issue C Abstract: This study explored the deconsolidation of Venezuelan subsidiaries by 15 U.S. Multinational Corporations (MNCs) during the severe economic and political crisis of 2015. We used a probit model and decision tree classifier to examine how foreign exchange losses and the industry sector influenced this decision. We found that consumer goods MNCs and those with large losses were more likely to be deconsolidated. Deconsolidation may be a common response in other troubled emerging markets, especially in a deglobalized world. We contend that deconsolidation improves stakeholder quality and the transparency of financial reporting. In addition, an MNC’s subsidiary deconsolidation is the middle ground between doing nothing and divesting. This study fills a gap in the academic literature on deconsolidation that has been largely overlooked in the past. This raises new questions and challenges for scholars seeking to promote financial reporting transparency in a changing global environment. Keywords: Deconsolidation; Multinationals; Disclosure; Deglobalization; ESG; Venezuela (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:182:y:2024:i:c:s0148296324002698 DOI: 10.1016/j.jbusres.2024.114765 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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