Chinese Multinational Enterprises in Europe and Africa: How do They Perceive Political Risk?

The concept of political risk has been defined from the perspective of
developed-country multinational enterprises (MNEs) and has mainly focused on the political and regulatory perils in developing host countries. However, we have
limited understanding of how emerging market firms perceive political risk in
international marketplaces. Adopting a case study method, we examine how Chinese MNEs perceive political risk when operating in developed and developing host countries, specifically, the European Union (EU) and Africa. Our findings show that Chinese MNEs regard their home-country origin and industry-specific restrictions as major political risks in the EU. By contrast, they consider the volatile political environment in some African countries as the main source of political risk. In addition to the sharp contrast in the political and regulatory environment between the EU and African states, Chinese MNEs commonly encounter political risks in both markets due to their own behaviour.