Chinese institutions and international expansion within the Belt and Road Initiative:firm capabilities of Chinese companies in the European Union

Framed within Institutional Theory and the Resource-Based View of the firm this article seeks to understand how the development of Chinese firms’ capabilities expanding its operations within the Belt and Road Initiative in the European Union, is influenced by two distinctive home institutions; (i) the support from the state, and (ii) the pervasive reliance on personal relationships (guanxi); and how far these capabilities contribute to the success of Chinese firms in the BRI. The study adopts a Narrative Inquiry strategy and a qualitative narrative analysis of 20 narratives from managers from three different types of Chinese firms. The main finding of the study is the understanding of the development and application of two capabilities that are relevant to the Chinese context, the adaptive capability and the resource bridging capability.