Abstract
Framed within Institutional Theory and the Resource-Based View of the firm the purpose of the study is to understand how the development of Chinese firms’ capabilities expanding its operations within the BRI in the European Union, is influenced by two distinctive home institutions interrelated with the state; (i) the support from the state, and (ii) the pervasive reliance on personal relationships (guanxi); and how far these capabilities contribute to the success of Chinese firms in the BRI. The study adopts a Narrative Inquiry strategy and a qualitative narrative analysis of twenty narratives from managers from three different types of Chinese firms involved in the BRI (State-Owned Enterprises, National Champions, and Private Firms). A thematic analysis in the context of biographical narrative research was considered as method of analysis. Finally, a coding process was followed and categories and themes for each of the narratives identified. The main finding of the study is the understanding of the development and application of two capabilities that are unique to the Chinese context, the adaptive capability and the resource bridging capability, following the analysis of a process and sequence of events related to the domestic development and further internationalisation expansion within the BRI of Chinese companies in the European Union (EU). Findings also show how these capabilities are the source of competitive advantage of Chinese firms in the EU. This article will contribute to the academic literature in two areas: (i) Institutional Theory, by providing an understanding of the influence of home institutions on the expansion of Chinese companies in Europe when following a state-led internationalisation strategy (the BRI); and (ii) the Resource-based view (RBV) and capability-building, by analysing the development of capabilities in Chinese companies and how Chinese home institutions shape these capabilities in the EU. The study bears implications for practitioners and policymakers as well as academics.
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