Abstract Academic abstract We analyze how skepticism of globalization, the socially constructed vulnerability that emanates from global interdependencies, affects global strategy. We argue that inequality, identity, and influence drive this skepticism and propose that the increase in rhetoric against globalization and for new regulations do not seem to result in significant reductions in cross‐border economic flows. We explain this discrepancy by proposing that multinationals' strategies counteract the impact of politicians' regulatory reactions to the skepticism of globalization. Specifically, we propose that firms increase flexibility in global value chains in response to skepticism of cross‐border trade, rework the localization of global operations to deal with skepticism of cross‐border investment, use lobbying in global finance to address skepticism of cross‐border finance, nativize the global workforce in reaction to skepticisms of cross‐border labor, and protect global knowledge to solve the skepticisms of cross‐border knowledge flows. Managerial abstract We study how the increases in negative attitudes toward globalization, which we call skepticism of globalization, influence the global strategy of firms. We explain that inequality, identity, and influence drive this skepticism and propose that the increases in rhetoric and government regulations do not seem to have resulted in significant reductions in cross‐border economic flows because companies have redesigned strategies to counter the effect of rising skepticism of globalization. Specifically, we explain how the regulations of cross border trade, investment, finance, labor, and knowledge flows that accompany increases in skepticism of globalization are countered by multinationals' strategic changes in the flexibility in global value chains, localization of global operations, lobbying in global financing, nativization of global workforce, and protection of global innovations.
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