The Changed Geopolitical Map: Implications for Business Policy in a Sustainable Finance Perspective

Pervez N. Ghauri, Lars Oxelheim () and Trond Randøy
Additional contact information
Pervez N. Ghauri: Birmingham Business School, Postal: University of Birmingham, U.K.
Lars Oxelheim: Research Institute of Industrial Economics (IFN), Postal: Stockholm, Sweden, and the School of Business , and Law, University of Agder (UiA), Norway, https://www.ifn.se/en/researchers/affiliated-researchers/lars-oxelheim/
Trond Randøy: Copenhagen Business School (CBS)

No 1465, Working Paper Series from Research Institute of Industrial Economics

Abstract: The paper acknowledges the changed geopolitical map and the new adjacent political mindset and examines the current state of the relationship between MNEs and governments/central banks. The focus is on the implications of these changes for business policy in a sustainable finance perspective. Our analysis reveals that the increased tensions in the post-financial crisis of 2008/2009, the ultra-low interest rates during the Pandemic, and development in geopolitics post-Ukraine, contribute to reducing the assumptions for a well-functioning global value chain. These tensions all need to be addressed by careful adaptation of company strategies and government policies. Five corporate strategies for the reorganization are discussed. Moreover, on the positive side the reorganization of the global value chain provides an opportunity to meet the United Nations’ Sustainable Development Goals (SDGs) (United Nations, 2015). The reorganization calls for sustainable financial decisions that internalize environmental, social, and governance (ESG) considerations. The paper addresses this call and explores the implications for the practice of sustainable finance in a MNE that considers a reorganization of its global logistic chain because of increased frictions in crossing national borders.

Keywords: Sustainable finance; ESG; Protectionism; Globalization; State aid; Investment patterns; Global value chain (search for similar items in EconPapers)
JEL-codes: D25 E22 E24 E58 E62 F21 F23 L22 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2023-05-30
New Economics Papers: this item is included in nep-cis and nep-env
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