Internationalization under Geopolitical Risk: Market Selection and Exit

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.