What drives firms’ Belt and Road strategy, performance, and CSR?

The “Belt and Road Initiative” (BRI) may be the greatest cooperation endeavor in the world. How do firms pursuing BRI perform? There is a scarcity of firm-level BRI studies and no empirical test of the strategy tripod, which includes institutional, industry, and resource-based views. Thus, we are motivated to test the strategy tripod on performance, employment, and business resilience. Moreover, there is no theoretical mechanism linking BRI strategy to firm outcomes. Hence, we create an institutional theory-based model with mechanisms by which BRI creates performance, CSR, and resilience. To empirically examine this novel model, we develop a portfolio of BRI firms and non-BRI competitors in which BRI is the treatment variable. Then, we undertake PSM-DID panel analyses on Chinese listed companies from 2011 to 2020. The findings demonstrate that BRI firms are more profitable, hire more people, and are more resilient than non-BRI firms. As the treatment factor for institutional theory, BRI does explain performance, CSR, and resilience. Furthermore, private control also benefits BRI firms. In particular, we find out that BRI firms in the East Coast region perform better than those from other regions. Our findings yield management decisions about whether to join BRI and policy conclusions about how to advance the BRI. We affirm that all three theories of the strategy tripod explain the performance and CSR of Chinese BRI firms. Thus, as the modern Silk Road, BRI does develop prosperity.