Researchers find that unrest can have international ripple effect on business

A recent study conducted by Professor Isil Erel, Academic Director of the Risk Institute at The Ohio State University’s Fisher College of Business, in conjunction with Jan Bena from the University of British Columbia and Serdar Dinc from Rutgers University, has found that global, non-financial companies that have subsidiaries in crisis countries experience negative financial effects that extend beyond that country’s borders.

In their findings, which were presented by Professor Erel last month at Carnegie Mellon University and Emory University, it was determined that investment in a corporations’ subsidiaries in non-crisis countries tended to be 18% lower for corporations who had other subsidiaries in countries experiencing turmoil. Employment growth rate was also shown to be net zero or negative for such companies compared to 1.4% growth for their non-affected counterparts.

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Isil Erel is the Academic Director and research fellow at the Risk Institute. The Risk Institute at The Ohio State University’s Fisher College of Business exists to bridge the gap between academia and corporate America. By combining the latest research with the real-world expertise of America’s most forward-thinking companies, the Risk Institute isn’t just reporting risk management’s current trends — it’s creating tomorrow’s best practices.

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