Exercising Strategic Flexibility by MNEs During the 2008–2009 Global Financial Crisis

Walid Hejazi, Jianmin Tang and Weimin Wang

The World Economy, 2025, vol. 48, issue 8, 1957-1976

Abstract: Given the merits associated with foreign direct investment (FDI), governments deploy policies to attract foreign multinational enterprises (MNEs). At the same time, governments deploy policies to smooth business cycles because of the costs associated with fluctuations in economic activity. The cross‐border presence of MNEs bestows upon them the strategic flexibility to adjust their activities across borders in response to recessions or financial crisis (or both). This raises the important question of whether, within any given domestic‐market context, the operations of both domestic and foreign MNEs magnify or mitigate business cycles. The current paper is focused on the 2008–2009 global financial crisis and the recession that followed, and the extent to which domestic and foreign MNEs operating in the Canadian market magnified its effects on the Canadian economy. This research is important because to the extent that MNEs magnify the effects of such financial crises, these additional costs must be offset against the benefits that come from the presence of MNEs.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/twec.70001

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:48:y:2025:i:8:p:1957-1976

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().