Geopolitical Pressure and Strategic Responses of MNEs in China
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The geopolitical pressure for decoupling from China has become a defining feature of the new globalization, reflected in Western governments’ efforts to limit dependence on China and enhance technological competitiveness and value chain (VC) resilience. As a result, multinational enterprises (MNEs) in China face heightened home-country institutional constraints that compel them to reassess and reconfigure their VCs. Drawing on institutional theory and global value chain research, we develop a conceptual framework explaining how MNEs in China respond to such home-country institutional pressure while evaluating host-country market opportunities. The framework identifies five distinct VC reconfiguration strategies, capturing how firms balance political conformity with economic rationality. By systematically linking geopolitical pressure to firm-level strategic responses, this paper contributes to international business scholarship by providing a theoretical lens for understanding strategic heterogeneity under conditions of geopolitical disruption.
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