On the economic implications of international travel restrictions: Evidence from Chinese MNEs' firm value

During the early stage of the COVID-19 pandemic, many countries and regions issued travel restrictions to prevent the spread of the virus. However, little is known about the impacts of such policy changes on individual businesses, particularly multinational enterprises (MNEs) that involved in business activities across countries. Drawing upon signaling theory and resource dependence theory, we find that the MNEs directly affected by travel restrictions experience significant reductions in shareholder value in both the short and long term. Furthermore, state ownership mitigates the negative effect of travel restrictions on MNEs, but having a large number of overseas subsidiaries and high-tech characteristics deepens the adverse effects caused by travel restrictions. These findings offer new research directions for international business scholars to explore the economic consequences of public policies resulting from global emergencies, and provide insightful lessons for managers to respond to international crises and for policymakers to develop future public policies.