MNC's coopetition strategy with host government in emerging market

Abstract

Coopetition reflects the simultaneous coexistence of cooperation and competition within the relationship between two actors. Multinational corporations and host governments in emerging market significantly depend on each other’s resource to achieve economic and non-economic goals. The resource interdependence along with independent interests causes the coopetitive relation.

The study aims to answer the two research questions. Firstly, what are the different domains that cooperation and competition take place in the relationship between MNCs and host governments of a transition economy? Secondly, what are the influencing factor affecting coopetition relationship in the relationship between MNCs and host governments? Therefore the literature review section was structured with the coopetitive concepts in international business, and the relations between multinational corporations and host governments.

The empirical study applies multiple cases study by means of semi-structured interviews. Six interviews from two Finnish industrial multinational corporations were arranged. The six executives who used to or currently work in China participated to respond to resources and bargaining power of the firm, operation strategy, relations with Chinese governments.

The results show that asymmetric interdependences between two parties positively influence competition. Ties with home government and state-owned enterprises positively influence cooperation. Firms with more bargaining power and resources that Chinese governments depend on positively influence cooperation.