Import of technologically complex products by Chinese high-tech enterprises and outward foreign direct investment under strategic political game conflicts between major powers

Min Chen and Fang Yang

The Journal of International Trade & Economic Development, 2026, vol. 35, issue 3, 676-699

Abstract: This paper studies how strategic political game conflicts between large countries affect firms’ decisions to import technologically complex products and engage in outward foreign direct investment (OFDI) by building a three-phase decision-making theoretical model and testing. It is found that the importation of technologically complex products by high-technology firms under strategic political game conflicts leads to a reduction in future OFDI, which is obvious when the pyhsical and institutional distance between the host country and the home country is large. Lower labour productivity and higher fixed costs are the main channels through which the import of technologically complex products under the conflict of the great power political game leads to a reduction in future OFDI by high-tech firms. Imports of technologically complex products by non-state-owned firms in the context of great power political game conflicts lead to a greater reduction in future OFDI than those for state-owned firms. As a result, firms will reduce imports of technologically complex products in order to increase OFDI under games of conflict between major powers, and firms will have an incentive to promote bilateral and multilateral cooperation.

Date: 2026
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DOI: 10.1080/09638199.2026.2626587

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