Discussion: View Thread

We seek scholarly contributions that can shed light on the challenges and opportunities in the new globalization and advance our deep and broad understanding of future evolution of IB ecosystem featuring new offshoring, reshoring, near-shoring, and friend-shoring.

Guest editors:

Peter Ping Li (ppl.egb@cbs.dk), Copenhagen Business School

Ziliang Deng (ziliang.deng@ruc.edu.cn), Renmin University of China

Marcus Møller Larsen (mml.si@cbs.dk), Copenhagen Business School & BI Norwegian Business School

Abby Jingzi Zhou (abby.zhou@nottingham.edu.cn), University of Nottingham Ningbo China

Special issue information:

Motivation for the Special Issue

The U.S. has been engaging in an aggressive decoupling with China in recent years. On the U.S. side, with the "Pivot to East Asia" strategy by Obama Administration in 2012, the U.S. attitude toward China has gradually evolved from an expectation of a liberalized and democratic China to one that regards China as a threat to the U.S. global leadership (Vertinsky et al., 2023). In the U.S.-China trade war that started in 2018, the former president Trump launched the "America First" policy into almost every domain of U.S.-China relationship (Freeman, 2019). Following that, the current president Biden continues with an even more aggressive decoupling from China. On the other side, China has increasingly emphasized its self-reliance to reduce its technological and market dependence on the U.S. (Vertinsky et al., 2023), even before the U.S. decoupling policy, reflected in the policy of "Made in China 2025" (Li, 2021). Meanwhile, China has also attempted to expand its own global influence to ensure its access to alternative foreign markets via various approaches, including the Belt & Road Initiative. The Russia-Ukraine conflict has further accelerated the U.S.-China decoupling, parallel to the decoupling between the West and Russia after the war between Russia and Ukraine. Recently, the term of "de-risking" has been used interchangeably with "decoupling" to refer to the efforts to limit the risk of escalation in both political and economic terms.

The decoupling has attracted important attention from scholars in different areas given their potential impacts on global business (e.g., Li et al., 2022; Witt et al., 2021; Witt et al., 2023). Scholars have discussed the issues from various perspectives, such as treating it as an institutional shock (Meyer et al., 2023), and a techno-geopolitical uncertainty (Luo & Van Assche, 2023); exploring its impacts on global supply chain (Vertinsky et al., 2023), global strategy (Cui et al., 2023), and global innovation (Petricevic & Teece, 2019). In the field of international business (IB), scholars have begun to call for integrating geopolitical views with business views in more depth, seeking to guide multinational enterprises (MNEs) navigating the disruptive business environment with the VUCA (volatile, uncertain, complex, and ambiguous) features (Bennett & Lemoine, 2014; Buckley, 2022; Li et al., 2022).

Currently, most of the extant studies on decoupling have focused on their negative impacts as a threat, such as supply-chain disruption and techno-geopolitical uncertainty (Luo & Van Assche, 2023; Vertinsky et al., 2023). However, we should not underestimate the strong resilience of MNEs to adapt to decoupling (Zamborsky et al., 2023), and the resilience of globalization in general (Contractor, 2021). Nevertheless, how globalization could continue with new features, and how MNEs could adapt remain unclear.

To a large extent, the above issues represent two departures from the current literature. First, the perspective of deglobalization and decoupling departs from the mainstream view of globalization (emphasizing economic efficiency, sometimes at the expense of security) toward a new emphasis on security not only in economic terms, but also in geopolitical terms. The logic for the first departure lies in the recognition that economic goals (e.g., efficiency and growth) should be balanced against the political goals (e.g., security and ideology).

Second, more importantly, there is a potential new perspective to regard decoupling not only as a disruptive threat but also an arguably viable option for some MNEs and some regions. The logic for the second departure lies in the recognition that some of the previously marginalized regions could emerge as the new lands of opportunities due to the new portfolios or configurations of multiple options, including off-shoring, re-shoring, near-shoring, and friend-shoring.

In particular, the emerging theme of "friend-shoring" could delineate a new globalization paradigm as a holistic and dynamic balance between globalization and de-globalization. For instance, some MNEs refuse to pick side by keeping their presence on both sides with two separate operations via "firewall"; other MNEs relocate their operations away from China to previously neglected regions. Such regions could benefit from the strategy of "friend-shoring" as being perceived as "friendly" for the U.S. or China (Bilgili et al., 2023; Zamborsky et al., 2023). Further, those friendly and neutral regions can also become the target of new investment from the major economic power since all of them try to expand their influence in such regions.

Aims and Scope of the Special Issue

We seek scholarly contributions that can shed light on the challenges and opportunities in the new globalization and advance our deep and broad understanding of future evolution of IB ecosystem featuring new offshoring, reshoring, near-shoring, and friend-shoring. The aims and scope of the special issue include but are not limited to three broad themes.

• Geographical Reconfiguration of IB Activities

Due to the impact of decoupling, the geographical configuration of IB activities may fundamentally shift from the current cores to the peripherals. The MNEs from both advanced countries (AMNE) and emerging countries (EMNE) could relocate their IB activities away from the decoupled regions (e.g., the Western AMNEs away from China and the Chinese EMNEs away from the West) toward those "friendly" or at least "neutral" regions. For instance, the FDI in Vietnam and India has significantly increased and their trade volumes have also boomed in the past few years (Witt et al., 2021). Other examples include the Chip-4 alliance and "China + 1" strategy. We wonder if the new off-shoring, re-shoring, friend-shoring, and near-shoring could result in a new geographical reconfiguration in the new globalization.

We have witnessed that some AMNEs and EMNEs have been relocating their operations away from China to previously neglected regions in the previous phase of globalization, such as Southeast Asia, South Asia, Africa, Latin America, Middle East, and Eastern Europe. Such regions could benefit from the theme of "friend-shoring" as "friendly" or at least "neutral" regions for the U.S. or China. Further, such regions also become the target of new investment from both the U.S. and China because both sides try to expand their influence in such regions. We wonder how both AMNEs and EMNEs contribute to, or respond to, such a geographical shift in IB activities.

• Future Directions for MNE Operations

The IB field has been subject to temporary shocks and uncertainties with de-coupling or de-risking as one of them. Although decoupling has created negative impacts, it could also create new pathways or models for some stakeholders. For instance, recently Airbus received a batch of orders from China against competition from Boeing. On the other hand, Chinese EMNEs, especially those who slow down their growth in the Western markets, are actively exploring previously neglected markets in non-Western countries.

Further, although some MNEs complains about being forced to pick side by decoupling, some entrepreneurs gain unique advantages from both sides. For example, Tesla continues offshoring and takes both advantages of production efficiency in China and the leading technologies in the U.S. as well as take the unique advantage of leveraging the tension between the U.S. and China. Hence, both opportunities and threats of decoupling may exist toward a new context of new globalization in terms of a holistic and dynamic balance between globalization and de-globalization.

We wonder how MNEs could orchestrate featuring off-shoring, re-shoring, near-shoring, and friend-shoring, while mitigating the threats. For instance, some MNEs refuse to pick sides but keep their presence on both sides by having two separate operations. Such a strategic maneuver could deepen the localization of both MNEs from advanced countries (AMNE) and emerging countries (EMNE) toward the insider status, including the "second-home" strategy (Li et al., 2020).

Finally, while some Chinese EMNEs are challenged and suppressed by the decoupling (Luo & Witt, 2022; Witt et al., 2023), other EMNEs outside China (e.g., those from India and Vietnam) may benefit from the business vacuum generated by the decoupling (Witt et al., 2021). In other words, friend-shoring in particular, and the new globalization in general, can be regarded as a double-edged sword favoring some EMNEs from some regions at the expense of other EMNEs from certain regions. EMNEs need strong resilience to adapt themselves for such new globalization and to optimize their advantages.

• Reflections on MNE Theories

The above discussion makes one wonder if the emerging context of friend-shoring and the new globalization in general could challenge the extant theories of MNE, such as the OLI model and the Uppsala model. For instance, the strategy of friend-shoring is a challenge to the current configuration of global value chain in terms of location choice. Such a strategy also challenges the current views about the stages and mechanisms in the process of internationalization. We may need to incorporate new theoretical perspectives such as real options to examine such strategies.

The development of EMNEs has inspired various theoretical discussions, such as the springboard perspective (Luo & Tung, 2007), LLL model (linkage, leverage and learning, Mathews, 2006), and catch-up model (Lee & Malerba, 2017). However, such theoretical discussions were based on the phenomena in the earlier context of globalization based on an efficiency-first logic. What would be the new perspectives to understand MNEs in the new globalization featuring off-shoring, re-shoring, near-shoring, and friend-shoring? We know much more about how EMNEs can compete with AMNEs as followers or latecomers, but we have little knowledge about the challenges facing EMNEs as they endeavour to become leading players. When geopolitical frictions become more frequent, how can both EMNEs and AMNEs mitigate the negative impacts of such conflicts? What are the good strategic options for both EMENs and AMNEs? Should EMNEs keep a low profile by focusing on the emerging markets only? What new paradigm should be created for MNEs to incorporate both efficiency and security in the global value chains in the new globalization? What is the theoretical underpinning of pendulum internationalization featuring divestiture from a certain country but re-entry in the future? These questions have created abundant opportunities for theoretical extensions and contributions.

Examples of Research Questions

1.  Which countries will likely benefit from the geopolitical tensions between major economies and become a new land of opportunities by hosting the near-shoring, and friend-shoring?
2.  In the context of increasing geopolitical frictions, what strategies can EMNEs and/or AMNEs employ to mitigate the potential negative impacts of such conflicts?
3. To what extent will security concerns outweigh efficiency considerations in the corporate global strategies and global value chains?
4.  What new paradigm should be created for MNEs to incorporate both efficiency and security in the global value chains in the new globalization?
5. How should MNEs adjust their global portfolio encapsulating off-shoring, re-shoring, near-shoring, and friend-shoring?
6.  What new theoretical perspectives may be developed/employed to examine the strategic choices between off-shoring, re-shoring, near-shoring, and friend-shoring?
7. What are the determinants affecting the re-shoring, near-shoring, friend-shoring, and relocation decisions of MNEs?
8.  Will there be tension between a subsidiary in a large developing economy and its headquarters during the strategic shift from off-shoring to re-shoring, near-shoring, and friend-shoring?
9.  How important are the differences in preferential policies (e.g., in corporate income tax rates) between the home and host countries in making the re-shoring decision?
10.  In what equity mode (e.g., wholly-owned subsidiaries, international joint ventures, and outsourcing), will re-shoring, near-shoring, and friend-shoring more likely occur?
11.  In what sector (e.g., high-technology, strategic, or labor-intensive sector), will re-shoring, near-shoring, and friend-shoring most likely occur?
12.  To what extent will the ideological difference, diplomatic animosity, or historical conflict/tension/war/colony between home and host countries affect the location choice in re-shoring, near-shoring, and friend-shoring?
13.  In the era of the digital economy featuring data as an important factor of production/service, the paradigm of international business has been fundamentally changed. Will the big tech firms (e.g., Meta and Google) stop offshoring but primarily employ home market resources?
14.  In host developing countries with weak IPR protection, will technological decoupling with the developed countries (e.g., as a result of re-shoring) trigger stronger indigenous innovation while curbing technological spillovers to local firms?

Manuscript submission information:

Author Guidance for Submissions

We encourage multi-disciplinary co-author teams covering international business, international relations, international economics, and so on. However, key for inclusion in this special issue is the presence of a distinct theoretical contribution to the field of international management. Conceptual and empirical papers are both welcome. 

The Journal of International Management's submission system will be open for submissions to our Special Issue from 01/06/2024. When submitting your manuscript to Editorial Manager® please select the article type "VSI: New Globalization". Please submit your manuscript before 31/07/2024..

All submissions deemed suitable to be sent for peer review will be reviewed by at least two independent reviewers. Once your manuscript is accepted, it will go into production, and will be simultaneously published in the current regular issue and pulled into the online Special Issue. Articles from this Special Issue will appear in different regular issues of the journal, though they will be clearly marked and branded as Special Issue articles.

Please see an example here: Journal of International Management | The Impact of Digital Technologies on Firms' International Strategy | ScienceDirect.com by Elsevier

Please ensure you read the Guide for Authors before writing your manuscript. The Guide for Authors and link to submit your manuscript is available on the Journal's homepage at: Journal of International Management | ScienceDirect.com by Elsevier

Workshops

To promote the visibility of this special issue and generate more interest among potential contributors, we intend to organize an online workshop in early 2024. In addition, we plan to propose a panel discussion at AIB Annual Meetings in Seoul during July 2-6, 2024.

References:

Bennett, N., & Lemoine, G.J. (2014). What a difference a word makes: Understanding threats to performance in a VUCA world. Business Horizons, 57(3), 311-317.

Bilgili, T.V., Bilgili, H., Allen, D.G., Loncarich, H., Kedia, B.L. & Johnson, J.L. (2023). Friends, foes, or 'frenemies': Intercountry relations and cross-border acquisitions. Global Strategy Journal, 13: 349-390.

Buckley, P. J. (2022). Corporate reactions to the fracturing of the global economy. International Business Review, 102014.

Contractor, F.J. (2021). The world economy will need even more globalization in the post-pandemic 2021 decade. Journal of International Business Studies, 1-16.

Cui, V., Vertinsky, I., Wang, Y., & Zhou, D. (2023). Decoupling in international business: The 'new' vulnerability of globalization and MNEs' response strategies. Journal of International Business Studies, 1-15.

Freeman, C.P. (2019). Constructive engagement? The US and the AIIB. Global Policy, 10(4), 667-676.

Lee, K., & Malerba, F. (2017). Catch-up cycles and changes in industrial leadership: Windows of opportunity and responses of firms and countries in the evolution of sectoral systems. Research Policy, 46(2), 338-351.

Li, J., Van Assche, A., Li, L., & Qian, G. (2022). Foreign direct investment along the Belt and Road: A political economy perspective. Journal of International Business Studies, 53(5), 902-919.

Li, P.P. (2021). The New Challenges in the Emerging Context of Global Decoupling. In Globalization, Political Economy, Business and Society in Pandemic Times, 36, 221-235.

Luo, Y., & Van Assche, A. (2023). The rise of techno-geopolitical uncertainty: Implications of the United States CHIPS and Science Act. Journal of International Business Studies, 1-18.

Luo, Y., & Witt, M. (2022). Springboard MNEs under de-globalization. Journal of International Business Studies, 53(4), 767-780.

Luo, Y., & Tung, R.L. (2007). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38, 481-498.

Mathews, J.A. (2006). Dragon multinationals: New players in 21^st century globalization. Asia Pacific Journal of Management, 23(1), 5-27.

Petricevic, O., & Teece, D.J. (2019). The structural reshaping of globalization: Implications for strategic sectors, profiting from innovation, and the multinational enterprise. Journal of International Business Studies, 50, 1487-1512.

Vertinsky, I., Kuang, Y., Zhou, D., & Cui, V. (2023). The political economy and dynamics of bifurcated world governance and the decoupling of value chains: An alternative perspective. Journal of International Business Studies, 1-27.

Witt, M.A., Li, P.P., Välikangas, L., & Lewin, A.Y. (2021). De-globalization and decoupling: Game changing consequences? Management and Organization Review, 17(1), 6-15.

Witt, M.A., Lewin, A.Y., Li, P.P., & Gaur, A. (2023). Decoupling in international business: Evidence, drivers, impact, and implications for IB research. Journal of World Business, 58(1), 101399.

Zamborsky, P., Yan, Z.Y., Michailova, S. & Zhuang, V. (2023). Chinese multinationals' internationalization strategies: New realities, new pathways. California Management Review.

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Jingzi Zhou
Associate Professor
Nottingham University Business School China
Ningbo
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