How National Security Drives the Coevolution of International Relations and International Business Policy: Evidence From the Belt and Road Initiative

ABSTRACT

Focusing on the Belt and Road Initiative (BRI), this study investigates how national security drives the coevolution of China's political risk management support for multinationals and competing countries' reactions. A competing country is a nation‐state that is neither the home nor host country of a multinational but perceives the multinational as posing a national security threat and reacts accordingly. Governments are deeply involved in cross‐border investment, and the resulting geopolitical tensions divide the world into blocs. Hence, understanding two issues becomes crucial: interactions between international relations and home‐country support for multinationals, and competing countries' influence on multinationals' internationalization. To contribute to these areas, we integrate coevolution theory and realism theory. Coevolution theory explains how reciprocal adaptation unfolds between governments over time, whereas realism theory explains why governments repeatedly adapt their policies to protect national security. Guided by this integrated theoretical framework, we examined China's policy documents published during 2013–2021. We find that, driven by national security concerns, the coevolution of China's support for multinationals and competing countries' reactions to the BRI went through stages of experimentation, legitimation, strategic competition, and collaboration. Our study contributes a theoretical model explaining how and why international business policy evolves under geopolitical competition.