ⓒ 2019-Center for Economic Integration, Sejong Institution, Sejong University, All Rights Reserved. pISSN: 1225-651X eISSN: 1976-5525 Journal of Economic Integration jei Vol.34 No.1, March, 2019, 086~108 http://dx.doi.org/10.11130/jei.2019.34.1.086 Does Divestment Risk Evolution of MNE Subsidiaries Display an Inverse U-Shaped Form? Antonios Georgopoulos* University of Patras, Rio Patras, Greece Vasilios Sogiakas Te American College of Greece, Athens, Greece Abstract The current study investigates the evolutionary path of divestment risk of MNE subsidiaries in a regionally integrated area. Although descriptive statistics tend to indicate an inverse U-shaped path of divestment risk for the whole post-war era (1960~2015), including the protectionism period (1960~1980), the Kaplan–Meier survivor curve is monotonically decreasing across the three successive stages of EU integration (1981~2015). Moreover, the econometric fndings exhibit that divestment risk stabilization at the deep integration stage is due to investment in product differentiation and human capital and not to factor differentials such as tariffs and wage costs. To our best knowledge, this is the frst study that explores the evolution of foreign divestment risk in a gradually increasing integrated environment. JEL Classifcations: F15, F23 Keywords: MNE subsidiary, Economic integration, Greece * Corresponding Author: Antonios Georgopoulos; Professor, Department of Business Administration, University of Patras, University Campus, 26504 Rio Patras, Greece, Tel: +302610996139, email: georgop@upatras.gr Co-Author: Vasilios Sogiakas; Lecturer, The American College of Greece, Tel: +306983601100, email: vasilios.sogiakas@glasgow.ac.uk