A South-South perspective on emerging economy companies and institutional coevolution: An empirical study of Chinese multinationals in Africa. Issue 4 (August 2021) - Mazé, Dominique
Highlights: Non-economic offsets and guanxi-style ecosystems are identified as major levers for business-government deals between Chinese MNEs and African governments. In this process, the power of Chinese MNEs' influence appears stronger than that of African governments and government agencies. Chinese multinationals develop a sustainable footprint in African emerging countries by exploiting and leveraging government-business networks. The active support of the Chinese government serves as a gateway through which the behaviour of host country institutions can later be influenced. Abstract: In this paper, we show how international tenders act as defining moments in building asymmetric coevolution-based mechanisms between Chinese multinational enterprises and local institutions in developing African countries. We used a case study methodology to explore how three Chinese multinationals – Citic, Sinopec, and Chinalco – developed non-market relations with the institutions of three African countries, namely, Algeria, Gabon and the Republic of Guinea, both during and after the submission of international tenders, to win strategic contracts and securely embed the company in question within the target host country. We found that Chinese companies not only submit tenders, but also develop multiple kinds of alliances in order to influence local institutions over the long term, transplant new business practices and standards, and expand in an unparalleled way, with host-country institutions and Chinese MNEs acting as partners in the new ecosystem. Based on our findings, we propose a model which highlights the specific mechanisms through which successful coevolution processes emerge and prosper between Chinese multinationals and developing country institutions. This study contributes to the international management literature by extending the field of institutional theory to co-evolutionism in international business.