Exogenous Shock in the GBE and The Effect of MNC International Diversification on Shareholder Value

This article examines the effect of international diversification on Multinational corporation (MNC) shareholder value creation in the face of an exogenous shock to the global business environment (GBE). We use the UN Climate Change Summit (COP26) as our research setting to investigate the extent to which MNC international diversification impacted shareholder value after last minute shifts in the COP26 agreement. Results from an event study analysis of 196 U.S. manufacturing MNCs indicate that international diversification is negatively related to shareholder value creation after COP26. However, MNCs with strategic orientations toward CSR and digitalization continue to create shareholder value despite high international diversification. These findings contribute novel insights to literature on GBE shocks and importance of firm strategic orientations in a turbulent environment.