A bargaining and property rights perspective on the Belt and Road Initiative: Cases from the Italian port system

Abstract

Infrastructural assets are vital for a country's economic and social development. Governments typically provide the regulation and administration of these assets, while multinational enterprises (MNEs) develop, construct, finance, and operate them. The Belt and Road Initiative (BRI) promises infrastructure projects that deliver economic and social benefit for both the host country and the MNE, however, the foreign market entry activities of Chinese MNEs in infrastructure projects might not always be successful. By bridging the bargaining power literature with the economics of property rights perspective, we examine how and why host-country actors at different governance levels influence foreign direct investment. Using a comparative case study approach, we interrogate four attempts by Chinese firms to negotiate access to Italian ports. In particular, we show that for a BRI port investment to take place, there has to be an alignment between the various actors of the property rights nexus regarding the allocation of rights. Chinese investors need to understand the bargaining position and property rights of actors across multiple levels, across space, and be mindful of changes over time when negotiating an infrastructure investment. Host-country governments need to have a clear port infrastructure strategy to avoid wasting resources in lengthy negotiations and useless infrastructure.

The Belt and Road Initiative and international business policy: A kaleidoscopic perspective

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The Role of Family Ownership in Norm-Conforming Environmental Initiatives: Lessons from China

“…Moreover, whether those risks are real or perceived, institutional investors are less likely than family-controlled firms to feel the same degree of exposure to the dangers of a weak property rights environment. Since economic growth (e.g., GDP growth) has been considered a crucial political goal in China (Luo et al, 2017), firms with significant numbers of institutional investors could argue that their economic results are contributing to the achievement of this political goal and, therefore, shield themselves from expropriation risks (Luise et al, 2022). In contrast, at least until recently, family-controlled firms have been seen as politically suspect in China, part of an emerging bourgeois class whose belief system is incongruous with Communist party values (Li et al, 2015).…”

The octopus that shrank: A historical analysis of how multinationals address policy and contractual uncertainty in a global value chain

“…Theoretically, the contributions of this study are as follows. First, we argue that an MNC's strategy is based on a careful evaluation of how the broader institutional environment influences its bargaining power, and of the tradeoffs between contractual and policy uncertainty through which each of these are managed, as posited by Henisz and Williamson (1999), Henisz (2000), and Luise et al (2022).…”