Cross-listed firms often pay close attention to geopolitical risks and carefully manage their relationships with stakeholders in the host country. Despite this, there is a dearth of research on how heightened geopolitical risks affect these firms' communication strategies, particularly in the context of risk disclosure. This paper examines the influence of geopolitical tension on the attributional strategies that firms use when addressing potential risks. Analyzing a sample of cross-listed firms during the escalation of US-China geopolitical tensions, we find that firms exposed to heightened geopolitical risks are more likely to increase their focus on systematic risk disclosures while reducing emphasis on idiosyncratic risks. This shift in risk communication is driven by efforts to buffer against concerns related to political and pragmatic legitimacy. Additionally, the impact of geopolitical risk on risk disclosures is amplified by factors such as the number of state shareholders and a decline in product market sales. Our findings contribute to the literature on corporate governance and international business by offering new insights into how geopolitical tensions shape the strategic communication practices of cross-listed firms.
