We explore the implications for international business of scenarios in which the gradual dealignment between geopolitics and geoeconomics has led to the emergence of two inward-looking political-economic groupings. These developments leave some countries and blocs, especially the European Union, only weakly aligned. Firms in some sectors are simultaneously vertically reintegrating, abandoning elements of global comparative advantage under technological or political pressure. International value chains and trade do not disappear as a result, but their shape and effects will change. How an MNE approaches these big shifts in the world economy will depend on its home location with implications for national economic policy, MNE internationalization and corporate strategizing.
Estrin et al. (Mon,) studied this question.