Chinese State-Owned Multinationals' (SOMNEs) Subsidiary nonmarket strategies in Selective De-globalization: An integrated perspective of co-evolution theory and the yin-yang frame

Abstract

Subsidiaries adopt nonmarket strategies in host countries to merit legitimacy. This conceptual paper theorizes paradoxes and nonmarket strategies for Chinese SOMNEs' subsidiaries in selective de-globalization targeting China. We enrich the well-received co-evolutionary framework in the IB literature by incorporating the Yin-Yang frame into the analysis and broadening the scope of thinking beyond the economic analysis of risks and costs in political disruptions on MNE subsidiaries. Our integrated theoretical framework highlights two dynamic environments (social and geopolitical) that subsidiaries simultaneously confront and the multi-level institutional pressures within these environments. We propose three Yin-Yang framed nonmarket strategies — zao-shi (造势) (creating favorable momentum), ying-shi (应势) (Not resisting unfavorable momentum) and wu-wei (无为) (inactive action) to address the paradoxes in a de-globalized business environment.