Speed of China’s OFDIs to the Belt and Road Initiative destinations: State equity, industry competition, and the moderating effects of the policy

Abstract

Organizational timely investments determine the success of the Belt and Road Initiative (BRI), yet few studies have explored the antecedents of those speed decisions. Based on a dataset of Chinese-listed firms over 11 years, we address this research paucity by incorporating the push and pull antecedents of OFDIs. The study revealed that industry competition significantly facilitates organizational BRI investment speed after the launch of the initiative, but such facilitative effects become weaker for firms located in the key BRI-participating provinces. Intriguingly, firms with greater state equity are slow after the launch of the BRI, and their slow gestures become more severe in those key provinces. The additional tests implicated that this result occurs because of inadequate positioning of those inland provinces. Overall, the study clarified the nature of the BRI by exploring the speed dimension. The findings also challenged the conventional wisdom of treating firms with greater state equity as obedient extensions of the government by unmasking their conservative attitudes toward the BRI, highlighting some fallacies of contemporary BRI policy. Third, the temporal and geographic aspects should be applied simultaneously to examine the policy effects of the BRI.

Family Influence and Environmental Proactiveness of Family Firms in China: A Mixed Gamble Perspective

“…At the governmental level, we measured governmental subsidies using the question that asks how often the respondent had obtained governmental subsidies with 1 indicating ‘never’, 2 ‘occasionally’, and 3 ‘constantly’. We measured government influence by the exact percentage of ownership possessed by the government or SOEs (Liu & Wang, 2021; Qian et al, 2018).…”

“…The different views above encounter greater ambiguities when normative factors are considered. Most previous studies have focused on developed economies but much less on emerging ones (Pisani et al, 2017), with the latter experiencing economic liberalization and changes unequally across regions (e.g., Liu & Wang, 2021; 2019; Qian et al, 2018; Yiu et al, 2014a). Moreover, most of their sampled firms are public-listed firms rather than private-owned FFs, where the former ones are not the main form of FFs (Cruz et al, 2014).…”

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

“…Liu and Wang ( 2022 ) concentrate on the factors that drive the speed of FDI along the BRI. The authors focus on three drivers: the degree of industry competition in China, the share of state equity in the firm, and a firm’s location in an officially designated BRI province.…”

“…Zooming into regional variations across China can be helpful to address some of these questions. Several papers in this special issue have highlighted that the nomination by China’s central government as a Key Province or Municipality in the BRI did not promote the internationalization of the firms in these regions (Chang et al, 2021 ; Liu & Wang, 2022 ). So how is the BRI structured and governed to address domestic Chinese challenges?…”

“…These effects are disproportionately larger for Chinese SOEs than for private firms. Institutional distance negatively moderates these effects Gao (2022) Network view of innovation ecosystems Quantitative data; Poisson estimation The Chinese government’s approach to select and finance a limited number of companies to join BRI projects has a cascading innovation effect on non-BRI firms in China’s domestic railway innovation ecosystem Lewin and Witt ( 2022 ) Realism; international relations Commentary BRI is at its core a political initiative that aims to address China’s domestic and geopolitical objectives Lin ( 2022 ) New structural economics Commentary BRI helps host countries to structurally transform their economies by improving their backbone infrastructure, thus generating economic development Liu and Wang ( 2022 ) Internationalization Quantitative data; random-effect regression model Domestic industry competition boosts the speed with which Chinese firms internationalize under BRI. However, higher state equity and a firm’s location in an officially designated BRI province reduces the speed of internationalization Luise, Buckley, Voss, Plakoyiannaki, and Barbieri ( 2021 ) Bargaining power; economics of property rights Qualitative data; comparative case study The bargaining positions and property rights of local actors across multiple levels influence the implementation of BRI projects …”