Articles
DOI DOI: 10.5281/zenodo.18442550

Internationalization under Geopolitical Risk: Market Selection and Exit

Oana Branzei1
  1. 1 Western University, Ivey Business School, London, Canada

Abstract

Background: Geopolitical risk has become a first-order determinant of
internationalization decisions, shaping both where firms expand and how quickly
they retreat. This review synthesizes research on geopolitical risk, sanctions exposure,
and macro-financial tightening and connects it to market selection and exit choices.
Methods: We develop a structured review anchored in decision theory, real options
logic, and international business research. Prior findings are organized into a process
model spanning scanning and entry, escalation management, and exit governance.
Results: : The synthesis identifies three recurrent mechanisms: (i) risk repricing
through capital flows, currency volatility, and financing conditions; (ii) operational
disruption via trade controls, cross-border payments friction, and compliance costs;
and (iii) strategic lock-in created by asset specificity, network dependence, and
institutional embeddedness. We propose a market selection and exit matrix and a set
of testable propositions linking risk signals to entry mode, pacing, and exit timing.
Conclusions: : Internationalization under geopolitical risk is best understood as a
dynamic portfolio problem. Resilience depends on optionality, diversified financial and
operational channels, and disciplined exit governance that preserves re-entry pathways
while limiting non-linear exposure.

How to Cite

Branzei, O. (2026). Internationalization under Geopolitical Risk: Market Selection and Exit. Transnational Academic Journal of Economics, 2(2), 137–144. https://doi.org/10.5281/zenodo.18442550
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