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<p>While geopolitical conflicts, including trade wars, have garnered substantial scholarly attention in recent years, the impact on the outsider firms not directly involved in such conflicts remains underexplored. Engaging in real-options informed analysis, we examine how MNEs from third countries may respond to trade wars by capitalizing on the potential for competitive opportunities: where trade wars prompt the scaling up of third-country subsidiary operations in the involved countries. We further explore how the strategic responses of third-country MNEs to the opportunities presented by a trade war can be enhanced by the strategic flexibility manifest in parent-MNE multinationality, the resources and networks embedded in local partners, and the presence of bilateral economic agreements. Employing the 2018 US–China trade war as an empirical context, our panel data encompass 3601 Chinese subsidiary operations for outsider MNEs hailing from 51 countries, which yields 14,404 annual subsidiary-level observations to conduct difference-in-differences analysis. The empirical results indicate that third-country MNEs disproportionately expanded their Chinese operations in response to the US–China tariff conflict, and that these strategic responses were pronounced for subsidiaries with highly multinational parents, local partnerships in the involved country, and a home–host country bilateral agreement.</p>

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Third-country MNEs, trade wars, and competitive opportunities: a real-options perspective

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  • 发表日期：

    2025年11月17日

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  • Hyewon Ma,
  • Joseph A. Clougherty

摘要

While geopolitical conflicts, including trade wars, have garnered substantial scholarly attention in recent years, the impact on the outsider firms not directly involved in such conflicts remains underexplored. Engaging in real-options informed analysis, we examine how MNEs from third countries may respond to trade wars by capitalizing on the potential for competitive opportunities: where trade wars prompt the scaling up of third-country subsidiary operations in the involved countries. We further explore how the strategic responses of third-country MNEs to the opportunities presented by a trade war can be enhanced by the strategic flexibility manifest in parent-MNE multinationality, the resources and networks embedded in local partners, and the presence of bilateral economic agreements. Employing the 2018 US–China trade war as an empirical context, our panel data encompass 3601 Chinese subsidiary operations for outsider MNEs hailing from 51 countries, which yields 14,404 annual subsidiary-level observations to conduct difference-in-differences analysis. The empirical results indicate that third-country MNEs disproportionately expanded their Chinese operations in response to the US–China tariff conflict, and that these strategic responses were pronounced for subsidiaries with highly multinational parents, local partnerships in the involved country, and a home–host country bilateral agreement.