The belt and road initiative, cultural friction and ethnicity: Their effects on the export performance of SMEs in China

Jiatao Li, Bin Liu, Gongming Qian

Research output: Journal PublicationArticlepeer-review

70 Citations (Scopus)

Abstract

China's Belt and Road Initiative (BRI) has provided Chinese firms with significant incentives to speed up the pace of internationalization. Yet very little international business (IB) research has been found to empirically examine such policy effects. This study explores this important issue using Chinese firms of different ethnicities in the Xinjiang Uygur Autonomous Region (XUAR) of China. We propose that the BRI has a positive formal institutional effect on the export performance of XUAR firms that target the “Belt” countries. Both cultural friction and ethnicity serve as the unique cultural contingencies that moderate the relationship between the BRI and export performance. More specifically, the cultural friction that results from the process of internationalization will negatively affect the export performance prompted by the BRI. The Uygur-owned firms will benefit more from the BRI due to their cultural similarity. Overall, the study takes the lead in investigating both internal conditions and external environments that promote and inhibit the internationalization process of small-to-medium enterprises (SMEs) in the XUAR that are geographically close to the “Belt” countries. The findings help enrich the understanding of the dual “push” and “drag” effects on the outcomes of SMEs’ international activities due to the government-led initiatives and the understanding of micro-foundation toward internationalization from an ethnicity perspective.

Original languageEnglish
Pages (from-to)350-359
Number of pages10
JournalJournal of World Business
Volume54
Issue number4
DOIs
Publication statusPublished - Jun 2019
Externally publishedYes

Keywords

  • Belt and road initiative
  • China
  • Cultural friction
  • Ethnicity
  • Export performance

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Marketing

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