Initiative as Institution: How the Belt and Road Initiative Influences Chinese Firms' Participation in Global Value Chains.

This article examines how China's Belt and Road Initiative (BRI), launched in 2013, functions as a state-led contracting institution that enhances contract enforcement and thereby influences Chinese private firms' participation in global value chains (GVCs). Using firm-level panel data from 2008 to 2016 and multiplicative interaction models, the study finds that politically connected firms—those with directors holding or having held central government positions—are more likely to increase their GVC involvement following the BRI's implementation, benefiting from the initiative's semi-formal and informal dispute resolution mechanisms such as arbitration and mediation. The research highlights that the BRI's contract enforcement role disproportionately advantages politically connected firms by reducing transaction costs and mitigating risks in cross-border trade, with mid-level government experience (section chief cadre) among directors showing the strongest moderating effect. These findings contribute to understanding how state-led economic strategies can substitute for formal legal institutions in facilitating internationalization, while also underscoring the heterogeneous impact of political ties on firms' global integration.