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

Author

Listed:
  • Ghauri, Pervez N.

    (Birmingham Business School)

  • Oxelheim, Lars

    (Research Institute of Industrial Economics (IFN))

  • Randøy, Trond

    (Copenhagen Business School (CBS))

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.

Suggested Citation

  • Ghauri, Pervez N. & Oxelheim, Lars & Randøy, Trond, 2023. "The Changed Geopolitical Map: Implications for Business Policy in a Sustainable Finance Perspective," Working Paper Series 1465, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1465
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    References listed on IDEAS

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    More about this item

    Keywords

    Sustainable finance; ESG; Protectionism; Globalization; State aid; Investment patterns; Global value chain;
    All these keywords.

    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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