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Assets of origin? Chinese multinational enterprises amidst the
Belt and Road Initiative

    The Belt and Road (B&R) initiative has been viewed as the most
    ambitious Chinese international policy initiative in history (Huang,

    2016). Since its launch in 2013, China had been mobilizing its polit-
    ical, economic, and diplomatic resources to link China with Europe

    through Central and Western Asia on land (i.e., the New Silk Road
    Economic Belt) and connect China by sea with Southeast and
    South Asia, the Middle East, Africa and Europe (the 21st Century
    Maritime Silk Road) (Lee, Hu, Lee, Choi, & Shin, 2018). With this
    initiative, China aims to both sustain its own economic growth
    through exporting excess capacity and further engage itself in the
    world’s economy. While it is still too early to assess its full impact,

    the B&R initiative holds the potential to create new growth oppor-
    tunities for the world economy by turning underdeveloped and

    unstable countries along the “B&R” into vibrant economies primar-
    ily through infrastructure development, along with other projects

    in economic and trade cooperation, investment, and financial con-
    nectivity (Huang, 2016). In addition, the B&R initiative has also

    been viewed as a means to increase Beijing’s influence across Eur-
    asia (Fukuyama, 2016; Swaine, 2015).

    How does the B&R initiative affect the global expansion of Chi-
    nese businesses? The rather limited empirical evidence suggests that

    the initiative encouraged the global expansion of Chinese multina-
    tional enterprises (CMNEs), but the impact differs across firms. Kang,

    Peng, Zhu, and Pan (2018) find that China’s outward foreign direct
    investment (OFDI) in B&R countries is approximately 40% higher than
    that in other countries and that the OFDI from China increased by
    46.2% in B&R countries. Similarly, Du and Zhang (2018) find that
    CMNEs became significantly more active in overseas mergers and
    acquisitions in B&R countries after the announcement of the initiative

    in 2013, especially Chinese state-owned enterprises in the infrastruc-
    ture sectors, as well as private firms in the other sectors.

    At the firm level, Li, Liu, and Qian (2019) find that the initiative
    improves the export performance of firms in China’s Xinjiang Uygur
    Autonomous Region supplying economies along the “Belt” route.
    Additionally, cultural contexts such as ethnicity and cultural friction

    moderate the impact (Li et al., 2019), indicating that not all firms bene-
    fit the same from the initiative.

    While the above suggests a push for further globalization through
    the B&R initiative, almost simultaneously, the world economy is
    hampered by an increasing rise of populism and protectionism

    (Evenett, 2019; Rodrik, 2018) and the emergence of de-globalization

    (Witt, 2019). The traditionally pro-free-trade Western society is wit-
    nessing an unprecedented wave of anti-globalization sentiment that,

    in some countries, has been translated into government policies, such
    as the Trump administration’s “Buy American, Hire American” policy.

    Such a shift in mindset and policy can fundamentally turn the previ-
    ously favorable global context for global expansion of CMNEs

    (Ramamurti, 2012; Ramamurti & Hillemann, 2018) into one that is
    unfavorable in the future. The U.S. market ban on Chinese firms
    (e.g., Huawei for 5G and BYD for electric buses) indicates the possible
    unfolding of a new reality where multinational enterprises from
    emerging markets such as CMNEs likely suffer from liabilities of origin
    (Muralidharan, Wei, & Liu, 2017; Ramachandran & Pant, 2010) and/or
    liabilities of “emergingness” (Madhok & Keyhani, 2012).

    In contrast, the rapid expansion of CMNEs in B&R countries sug-
    gests that the country of origin of CMNEs and their relationship with

    the home-country political structure may be an asset for their expan-
    sion in these countries rather than a liability (Orazgaliyev, 2020).

    Rather than suffering from liabilities of country of origin
    (Ramachandran & Pant, 2010, p. 255), CMNEs in B&R countries may
    benefit from capability-based and legitimacy-based advantages as a

    consequence of originating from China. In other words, the B&R ini-
    tiative potentially provides legitimacy to CMNE assets of origin when

    expanding into B&R countries through nation branding (Tsang, 2020)

    and institutional support (Huo, 2020), even though the degree of ben-
    efits varies across firms (Li et al., 2019).

    Whether the hypothesis of assets of origin holds for CMNEs in

    B&R countries is subject to empirical validation. This line of investiga-
    tion will advance our understanding of what is “Chinese” about Chi-
    nese foreign direct investment and CMNEs (Ahlstrom, Yang, Wang, &

    Wu, 2018; Buckley et al., 2007; Deng, 2012; Deng, 2013; Deng, Yang,
    Wang, & Doyle, 2017) and how this translates into unique models and
    business strategies (Boisot & Meyer, 2008; Child & Rodrigues, 2005;

    Rui & Yip, 2008; Tan & Wang, 2011). In a broader sense, this hypothe-
    sis helps us understand how and why CMNEs, as examples of firms

    from emerging markets, differ from MNEs from developed economies
    (Bonaglia, Goldstein, & Mathews, 2007; Ramamurti, 2012) and
    whether they are theoretically distinct (Hernandez & Guillén, 2018) in
    terms of their motivation (Luo & Tung, 2007), strengths, weaknesses
    (Madhok & Keyhani, 2012), and strategy (Luo, Sun, & Wang, 2011),
    among other things. This special issue is intended to stimulate this

    Liang Wang, Haifeng Yan, Xiaohua Yang, Francesco Ciabuschi, William X. Wei

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