Understanding international business in a world of volatility and uncertainty

In February of 2020, somewhere outside of Barstow, California, “Mad” Mike Hughes walked out into a clearing, strapped on a homemade rocket, and launched himself into the sky in an ill-fated attempt to prove that the Earth was flat. Unfortunately, he failed to prove his theory after fatally encountering a spherical planet at a very high rate of speed. In much the same way, Gies assistant professor Yilang Feng says that those exploring globalization and corporate global strategy are likely to crash and burn unless they adapt a world view that’s far closer to Magellan’s than those who feared the monsters living at the “edge” of the world.

“In my class I first want my students to understand the realities of the semi-globalized world, which means large parts of the world are not globalized, contrary to the popular belief of the past decade that the world is flat,” said Yilang Feng. In fact, says Feng, the world is quite regional, fraught with severe backlashes that inhibit the free flow of people, commodities, and ideas. And these struggles can play out in very interesting ways for practitioners of international business.

In one recent study, Feng looked at foreign direct investment, or more specifically, how foreign investment is viewed through various prisms in the United States. In general, we all like the idea of someone investing in our communities. It brings jobs, stability and increasing economic prosperity. And politicians who promise economic investment can find themselves doing very well in the polls.  According to Feng, however, that enthusiasm can vary significantly, depending on the investment source.

Using a randomized field experiment, Feng and his partners tested respondents’ reactions to “business investment,” “foreign investment,” or “Chinese business investment,” and their work yielded some interesting findings. For one, Americans were skeptical of Chinese business investment and, to a lesser extent, investment from other foreign sources. They also found that the gap in enthusiasm between generic business investment and foreign/Chinese investment widened in areas that have experienced trade-related job losses. In other words, politicians promising a chicken in every pot will get a better response if it’s a domestic breed, especially if it’s served on the grill in Detroit.

Feng, who completed a PhD in political science at the University of Michigan in 2019, hopes to share these and other insights with students taking Multinational Management at Gies — starting with the premise that the global economy isn’t flat. “With this baseline understanding, I’ll work with my students to understand how managers and their organizations make location and institutional choices to maximize performance and manage risks.”

Feng, who held a postdoctoral appointment at Harvard prior to joining Illinois, started his academic life in Canada. Prior to that, he spent most of his life in northern China, which officially makes Champaign the warmest place he’s ever lived. But it wasn’t just the weather that attracted him to Illinois. Feng says he was drawn by the opportunities he saw at Gies, as well as the caliber of its students. He was also liked the vision of those at the helm.

“Gies has very effective leadership to guide the College through this turbulent time, which means it can provide junior scholars like myself a highly stable and nourishing environment. And I don’t say that lightly,” said Feng. “I am very lucky to be able to start my academic career here.”