Home-country government support, the belt and road initiative, and the foreign performance of Chinese state-owned subsidiaries

Yuanyuan Huang (), Lu Shen () and Chuang Zhang ()
Additional contact information
Yuanyuan Huang: Southwest Jiaotong University
Lu Shen: Dalian Maritime University
Chuang Zhang: Dongbei University of Finance and Economics

Asia Pacific Journal of Management, 2022, vol. 39, issue 3, No 10, 1023-1049

Abstract: Abstract State-owned (SO) multinational enterprises (MNEs) from emerging economies face two contradictory effects on their foreign operations due to their linkage with their home-country governments. Although home governments provide SO MNEs with resources, the affiliation also exposes SO MNEs to the legitimacy challenges in the host countries. Given this theoretical debate, we propose that home government support may facilitate SO MNEs’ post-entry operations in the host markets. Furthermore, because the legitimacy pressures directed at SO MNEs may be contingent on the interstate relations between the host and home governments facilitated by China’s Belt and Road Initiative (BRI), the BRI cooperative relations may shift the effect of home government support. Using survey and archival data, we find that home government support has a positive impact on the foreign performance of SO subsidiaries. This effect is weaker in countries that are cooperating with the BRI than in those that are not. Moreover, institutional distance weakens the negative interactive effect between BRI cooperation and home government support on the performance of SO MNEs’ foreign subsidiaries. These findings extend the institutional perspective by highlighting an alternative source of legitimacy for MNEs with distinctive attributes and in various host conditions.

Keywords: Home government support; Belt and road initiative (BRI); Institutional distance; State-owned subsidiary; Institutional theory (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10490-020-09743-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:asiapa:v:39:y:2022:i:3:d:10.1007_s10490-020-09743-9

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10490/PS2

DOI: 10.1007/s10490-020-09743-9

Access Statistics for this article

Asia Pacific Journal of Management is currently edited by Jane Lu

More articles in Asia Pacific Journal of Management from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().