Resources-for-infrastructure (R4I) swaps: A new model for successful internationalisation strategies of rising power firms?

Abstract

Purpose

This paper aims to understand the role resources-for-infrastructure (R4I) swaps play in internationalisation strategies, thereby contributing to a modern theory of the multinational enterprises (MNEs) based on experiences of rising power firms. Since 2004, the Chinese Government; state-owned policy banks; and oil, mining and construction corporations have used a relatively unique form of internationalisation through complex, large-scale R4I swaps in Africa.

Design/methodology/approach

This paper uses a resource bundling perspective and political economy lens to analyse complex entry decisions and success, as well as the failure of R4I swaps. The paper is based on a comparative analysis of published case studies of R4I swaps in seven African countries complemented by field research by the first author.

Findings

The findings show that, under very specific circumstances, R4I swaps can be considered as a successful internationalisation strategy. R4I swaps enable Chinese MNEs to build and maintain relationships with non-market elites that control access to natural resources and infrastructure contracts.

Research limitations/implications

The sample of cases, although representing all relevant R4I-swaps, is too small to come for more quantitative conclusions on success/failure factors.

Practical implications

R4I swaps are a very unlikely model for Western MNEs, as they lack the necessary country-specific competitive advantages and institutional mechanisms.

Originality/value

To the authors’ knowledge, this is the first comprehensive study of all relevant Chinese R4I swaps in Africa and contains original data from fieldwork in Ghana and D.R. Congo.

Citation

Konijn, P. and van Tulder, R. (2015), "Resources-for-infrastructure (R4I) swaps: A new model for successful internationalisation strategies of rising power firms?", Critical Perspectives on International Business, Vol. 11 No. 3/4, pp. 259-284. https://doi.org/10.1108/cpoib-02-2013-0008