Title: The Domestic Pivot: Geopolitical Risk and Corporate M&A Strategies

Speaker: Jiang Ping, Professor of Finance, University of International Business and Economics; Ph.D. Supervisor; Researcher, National (Beijing) Institute of Open Economy, University of International Business and Economics; Director of Beijing ESG Research Institute; Associate Editor of the SSCI journal "Economics & Politics"; Invited Guest of CCTV "Focus Interview" and CCTV Finance. Professor Jiang Ping obtained her bachelor’s and master’s degrees from Guanghua School of Management, Peking University, and her Ph.D. from City University of Hong Kong. She has published more than 50 papers in first-class domestic and foreign journals, including top and first-class SSCI journals such as "The Review of Financial Studies", "Journal of Corporate Finance", "Journal of Banking and Finance" and "Financial Management". She has presided over 3 projects of the National Natural Science Foundation of China, served as the leader of 4 sub-projects of major social science projects, and won the first Sun Yefang Financial Innovation Award. She was selected into the first batch of "Young Talent Program" of Beijing Municipal Education Commission and the "Outstanding Young Scholar Cultivation Program" of University of International Business and Economics. Her research results have also won awards such as the Best Paper Award issued by the Chartered Financial Analyst Institute (CFA) and the Chinese Finance Association (TCFA), and the Excellent Paper Award of the 3rd China International Conference on Management. She actively participates in teaching reform, and the course "Corporate Finance" she teaches was rated as a Beijing High-Quality Undergraduate Course and selected into the second batch of National First-Class Undergraduate Courses.

Abstract: Using a return-based measure of firm-level exposure to geopolitical risk (GPR), we examine its impact on the acquisition strategies of U.S. firms. The study shows that firms with higher geopolitical risk exposure are significantly more likely to conduct domestic M&A transactions, while this impact is not evident in cross-border transactions. This shift toward domestic markets is driven by strategic risk diversification motives, as evidenced by high-geopolitical-risk acquirers targeting firms with low geopolitical risk. The main mechanism is that firms use domestic M&A as a strategy to prepare for potential disruptions to their international supply chains. Subsequently, we identify key boundary conditions, showing that this impact is more significant for firms that are more vulnerable to geopolitical shocks (motivation to act) or have stronger market power (ability to act). Although these transactions trigger negative returns at announcement, they lead to significant long-term outperformance, including improved equity valuations, increased stock returns, enhanced operational stability, and greater supply chain resilience. Overall, our research identifies M&A as a key tool for risk management, providing a nuanced counterargument to the common view that uncertainty uniformly inhibits investment.

Date & time: 11 October 2025, 14:40-15:15

Venue: B609, Yifu Information Technology Building, Central Campus, Shandong University