The Effect of Internationalization and Partisan Ambidexterity on Firms’ Sensitivity to Elections

Rising partisan polarization, protectionist tendencies, and electoral and policy uncertainty not only increased risks of firms´ international operations, but also in their national business habitat. In this paper, we study the effect of election-related uncertainty on firms’ stock prices. In addition to firm internationalization as a mitigating effect against home-country policy risk, introduce the concept of partisan ambidexterity to describe firms that have expertise, legitimacy and operations in locations with opposing ruling political ideologies. Specifically, we conduct an event study of the US presidential elections in 2008, 2016, and 2020 and their effect on 2,941 listed US firms. We contribute to strategic management research by exploring whether firms´ with a bi-partisan national footprint can act as a safeguard against market fluctuations related to political events. Managerial Summary