Terrorism, competitiveness, and international marketing: an empirical investigation

Abstract

Purpose The purpose of this paper is to research the relationship between terrorism and multinational enterprises (MNEs), focusing on operational costs, marketing planning, supply chain management, and distribution activities. Terrorism is a growing threat to internationally active firms, but there has been no empirical research to address the distinctive challenges that terrorism poses for the international marketing activities of firms. Design/methodology/approach The paper opted for an exploratory investigation, following a two-phase research design. In the first phase it was based on qualitative interviews with internationally active firms. In the second phase, an online survey of a large sample of international firms based in the USA was performed. All measures were developed specifically for the study. Findings The paper provides empirical insights about how terrorism affects MNEs, especially those operating in emerging markets. It suggests that terrorism accounts for significant costs in the international marketing budget of MNEs, as well as in planning, and the design of supply chains and distribution channels. Findings also reveal that firms with significant resources and international experience appear to cope better with terrorism’s effects. Research limitations/implications Given the early stage of empirical research on terrorism and international marketing, this study was necessarily exploratory. Practical implications The paper includes implications and suggestions for multinational companies to increase the security of their businesses through the development of corporate preparedness. Social implications Terrorism represents not only an organizational crisis at the level of a firm, but it affects the whole society. Originality/value This paper fulfills an identified need to study the relationship between the growing threat of terrorism and international business.