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

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.