The Belt and Road Initiative for an Intercontinental Ecosystem: Strategic Implications for Multinational Enterprises around the World

Peter P. Li*, Peter S. Hofman, Michele Geraci

*Corresponding author for this work

Research output: Contribution to journalJournal article

Abstract

International trade and foreign direct investment (FDI), as well as other forms of cross‐border economic activities, are essential to globalization, even in the emerging era of neoglobalization as a unique balance between globalization and deglobalization. Despite the hype, globalization is a relatively new phenomenon. In the past few decades, international trade and FDI were largely regional in scope (Cantwell, Dunning, & Lundan, 2010; Rugman, 2003; Rugman & Verbeke, 2004). For globalization as the highest stage of internationalization, intercontinental economic activities are much more critical than intracontinental ones. In recent history, intercontinental economic activities have often occurred across the Atlantic and the Pacific Oceans. This contrasts with much older types of intercontinental economic activities that occurred in the form of cross‐land exchanges. For example, in the ancient Silk Road era, China and Europe engaged in intercontinental economic exchanges that gave rise to economic, social, technological, and cultural transformation in both China and Europe. This historical era included the birth of the Renaissance and the Industrial Revolution as the most significant events in the history of East‐Meeting‐West (Li, 2012). Now it seems that history is repeating itself in another context, as evidenced by the Belt and Road Initiative (BRI). Even though the BRI was initiated by China, it cannot be considered a sole effort on the part of China. Rather, it could be reframed as a megaproject of international collaboration between China and Europe in a move toward an intercontinental ecosystem (in terms of a cross‐continental community of self‐organized, yet interdependent, members engaging in co‐opetition based on an institutional platform as their shared infrastructure for interaction, cf. Jacobides, Cennamo, & Gawer, 2018; Nambisan, Zahra, & Luo, 2019; Shipilov & Gawer, 2020), and as one of the most critical events in the emerging era of neoglobalization. The purpose of this article is to identify the salient challenges of the BRI to intercontinental economic integration and discuss the major strategic implications of BRI for multinational enterprises (MNEs) around the world. In particular, our study bears critical implications for the debates over the potential effect of China's international relationships on China's domestic policies, and also the domestic forces underlying such international relationships, even under the condition of economic “cold war” (e.g., Allison, 2017; Petricevic & Teece, 2019; Teece, 2020; Witt, 2019; see Li, 2019 for a review).
Original languageEnglish
JournalThunderbird International Business Review
Volume62
Issue number3
Pages (from-to)239-248
Number of pages10
ISSN1096-4762
DOIs
Publication statusPublished - May 2020

Bibliographical note

Published online: 26 February 2020.

Cite this