A Geopolitical Perspective into the Opposition to Globalizing State-Owned Enterprises in Target States

Geopolitical concerns are one of the important factors influencing multinational enterprise (MNE) location choices. This is particularly true for globalizing state-owned enterprises (SOEs) because of their direct ties with governments. Because of geopolitical concerns, SOEs may face a strong level of opposition in foreign countries which neighbor SOEs’ home countries, have different religious beliefs and political regimes from SOEs’ home countries or countries do not lack resources that SOEs can provide. Such opposition is particularly strong in countries where domestic politicians find it in their interests to arouse nationalistic feelings and oppose foreign SOEs’ investments. This study highlights the importance of considering geopolitical factors in MNE location choices.