Geopolitical affinity and market commitment

This project examines how geopolitical affinity shapes firms’ market commitments.

Photo by Daniel Eduardo Cáceres on Unsplash

About the project

Using longitudinal data from 1980 to 2022 covering more than 30,000 wind farms, each linked to its turbine suppliers and country-level characteristics, we analyze how changes in geopolitical alignment influence firms’ decisions to sustain or reduce their presence in specific markets.

We argue that when a firm’s geopolitical alignment with a host country weakens, its commitment to that market declines due to heightened perceptions of political and operational risk. Reduced affinity can undermine confidence in contract stability, financing, and regulatory support. We also consider the geopolitical positions of competitors, proposing that the entry or expansion of more aligned rivals amplifies the disadvantages faced by less aligned firms by reinforcing both competitive and institutional pressures.

The project advances the idea of geopolitical affinity as a strategic resource that shapes firms’ ability to sustain market positions and compete effectively in politically sensitive environments.

Research team