Replication package - How Firms Communicate about Geopolitical Risk

As geopolitical tensions rise in an interdependent world economy, cross-border exchanges become more difficult for firms. Yet, scholars do not observe the expected deglobalization. Instead of looking at behavioral reactions, this article examines how firms respond in their communication. We do so by introducing a geopolitical communication index based on annual reports of Belgian public firms. The index allows us to analyze how the country average evolved, examine sector and firm differences, and qualitatively assess the most common concerns. Firms do communicate more about geopolitics when risk increases, and the sectors and firms that are most internationally integrated communicate the most. However, we also find that firms mainly communicate about geopolitical risks that directly affect their operations and less about structural but abstract developments and incidents. As such, the article contributes to a better understanding of how firms relate to the international economic system and its geopolitical foundations.