ABSTRACT
What impact did political risk and nationalism have on global business? In this chapter, risks arising from political phenomena, including nationalism as one of the most prominent ones, are regarded as a part of various ‘non-market risks’, which have often escaped economic analysis and rather been treated as accidental, exogenous variable. In contrast, we posit that political risk and nationalism have shaped the development of global business and changed the trajectory of globalization. Responding to political pressures, global business looked to transform itself from being based on a unitary structure to a multi-centered one: today’s multinational corporations were created to operate beyond the constraints imposed by the sovereign states. In addition, the economic entities involved in global business created international public goods on their own, such as special safe havens, rather than remaining passive to the actions of sovereign states. Ironically, however, this seems to be creating a new kind of political risk and widespread anti-globalism.
