Pandemic Challenges for Multinationals and Policymakers

Dr Axele Giroud, Professor of International Business, has co-organised and taken part in two major online events for global policymakers in recent weeks. The first webinar for the Euro-Asian Management Studies Association (EAMSA) looked at how multinationals have been managing supply chains during the pandemic.

Policymakers and members of research institutes from across Asia, Europe, Australia and the US joined the event which began with a panel discussion among leading executives discussing the impact of COVID-19 on their Euro-Asia activities and beyond. They provided insights into how European multinationals have adapted strategies in Asia, and likewise how Asian multinationals have altered their strategies in both Asia and Europe. This was followed by a debate among academics on how COVID-19 will impact upon existing theories and future research on multinational value chains across borders, and at how Euro-Asian supply chains will change in response to the crisis.

Professor Giroud, a former President of EAMSA, said: “The session looked at the profound impact of the pandemic on multinationals. Industry and academic experts alike emphasised how firms have addressed the challenges and reflected on how to bring about change within organisations. They also presented possible future scenarios and ways forward post-pandemic.”

Sustainable investment

In the second event, she acted as an invited academic expert during an inter-governmental policy making workshop organised by UN ESCAP (Economic and Social Commission for Asia and the Pacific) on the topic of sustainable investment.

Professor Giroud has specifically been working with the agency on the development of a new handbook for policymakers to help them devise appropriate policies towards inward and outward sustainable foreign investment.

As she explained: “Right now this is a very topical issue as in the first half of 2020 Foreign Direct Investment (FDI) was down by as much as 49% compared to the same time last year because of the pandemic. The sharpest declines have been in developed countries, including Europe, while investment in Asia has held up better because there is slightly more confidence in the shape of the post-COVID recovery.

“It would be wrong to say that the entire FDI model is under threat, but what we are seeing is companies halting investment in the wake of the pandemic with a lot of projects put on hold. How multinationals adjust their cross-border strategies in the future will very much depend on the length of the crisis, and this may mean less reliance on global value chains. Much also depends on the type of sector they operate in as not all industries are facing the same kinds of difficulties.”

Sustainable Development Goals

She added that a key question for policymakers in this context is how they can continue to attract FDI that supports their own sustainable development goals (SDGs).
“This is a complex area because it requires a shifting mindset from policymakers. How can we define a sustainable foreign direct investment? And how do we develop metrics which can help policy makers identify the right kind of investment, in line with their own development objectives? This is precisely what we are looking to achieve through the development of the handbook.”