SOAS Research Online

Abstract

Increasing natural disasters pose significant challenges to multinational enterprises, given the complex, disruptive and long-lasting impact induced by climate change. This study adopts a multidisciplinary approach, amalgamating climatological insights, engineering design perspectives, and industrial economics theories to evaluate corporate vulnerability of MNEs based on two operating modes – joint ventures and wholly foreign-owned subsidiaries in Shanghai, China. Modelling Typhoon Winnie as the future climate conditions, we unfold the exacerbated economic loss in 2050 scenarios in comparison to that in 2013 scenarios for wholly owned subsidiaries. Nevertheless, with a microgeographical approach, our study demonstrates that in each district within the mega metropolitan city, the ‘location advantage’ position needs to be revisited in the way that clusters have double-impact role in MNEs’ performance in the wake of a natural disaster. This research carries important implications for business operations and policy making in highlighting the importance of developing dependencies across value chain activities and supportive institutional support.