Abstract
This study investigates the negative effects of global terrorism on foreign subsidiary survival in the host country with weak institutions and provides viable strategic options for foreign subsidiary to survive when they encounter lethal terrorist attacks. Our findings prove that (1) global terrorism has negative impacts on foreign subsidiary survival in the host country with weak institutions, and (2) the negative effects of global terrorism can be alleviated by foreign subsidiary’s local embeddedness to stakeholders in the host country with weak institutions. Especially, if foreign subsidiary hires more local employees, increases local investors’ ownership structure, and provides preferential treatments for local governments, it can garner local legitimacy, which is beneficial to survive against global terrorism in the host country with weak institutions.
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