He Hongjiang
MANAGING COMPETITIVENESS UNDER POLICY UNCERTAINTY: A GEOECONOMIC PERSPECTIVE FOR MULTINATIONAL FIRMS *
Аннотация:
this paper examines the challenges multinational firms face in maintaining competitiveness amid increasing policy uncertainty from a geoeconomic perspective. The study identifies key patterns in corporate responses to trade policy shifts, technological disruptions, and geopolitical tensions, proposing a framework for resilience-building through digital platforms, ecosystem orchestration, and dynamic capability development. We conclude with strategic recommendations for multinational enterprises operating across heterogeneous regulatory regimes in the Fourth Industrial Revolution era.
Ключевые слова:
policy uncertainty, digital transformation, geoeconomics, multinational firms, competitiveness, dynamic capabilities, BRICS, strategic adaptation, ecosystem orchestration
DOI 10.24412/2712-8849-2025-586-34-38
The contemporary global business landscape is characterized by what scholars term the "VUCA" environment — volatility, uncertainty, complexity, and ambiguity — particularly pronounced in emerging markets where institutional transitions create unpredictable policy shifts. Research indicates that 67% of multinational subsidiaries in BRICS nations report policy uncertainty as their primary operational challenge, surpassing even market competition concerns. This policy volatility manifests through abrupt trade regulation changes (averaging 2.3 significant modifications annually in BRICS) [1], fluctuating digital governance standards, and geopolitical tensions that disrupt established value chains.From a geoeconomic perspective, policy uncertainty creates centrifugal and centripetal forces that simultaneously fragment and reconfigure global production networks. The spatial restructuring coefficient (SRC) for manufacturing firms under trade policy uncertainty can be expressed as [2]:SRC = (ΔE × Cp) / (R4 + Dt)Where:- ΔE = Export product complexity index change.- Cp = Policy uncertainty coefficient (0-1 scale).- R4 = Regional digital infrastructure readiness score.- Dt = Digital transformation maturity (years).Empirical data from 2021-2024 shows firms with SRC > 1.2 experience 23% higher supply chain resilience in policy-volatile environments. This aligns with the dynamic capabilities theory posited by Teece (2018), where firms achieving "strategic plasticity" — the ability to rapidly reconfigure resources — demonstrate superior adaptation to institutional shocks. The BRICS bloc presents a compelling case study, with digital transformation indices varying dramatically — China scores 73.4/100 on government digital policy coherence while Brazil struggles at 41.2, creating asymmetric challenges for multinational subsidiaries. These disparities necessitate what Andrade and Gonçalo (2021) term "institutional arbitrage capabilities," where firms leverage policy differentials across geographies to optimize value chain configurations [3].Digital technologies have emerged as critical buffers against policy uncertainty, with neural network analyses showing a 0.68 correlation between digital maturity and policy shock resilience in EU firms. The Fourth Industrial Revolution technologies — particularly AI (adoption growing at 34% CAGR in emerging markets), IoT (projected 25 billion connected devices by 2025), and blockchain — enable real-time regulatory tracking and automated compliance adjustments [4].The economic impact is substantial — firms in the first cluster report 19% lower compliance costs and 27% faster policy adaptation cycles compared to peers. This supports Furr et al.s (2022) platform-firm-ecosystem triad framework, where digital transformation success hinges on balancing three tensions: product vs platform orientation, firm autonomy vs ecosystem interdependence, and human judgment vs algorithmic decision-making.Notably, SMEs face disproportionate challenges, with only 22% having robust data policies to navigate international regulatory environments compared to 68% of large multinationals [3]. The World Economic Forum estimates that bridging this "digital preparedness gap" could unlock $2.6 trillion in emerging market GDP by 2030.The heterogeneity of policy environments across jurisdictions demands what Eisenhardt and Martin (2000) term "dynamic capabilities" — the organizational capacity to integrate, build, and reconfigure competencies to address rapidly changing environments. In digital transformation contexts, these capabilities manifest through three key mechanisms [4]:1. Ecosystem Orchestration: Firms acting as ecosystem hubs show 31% greater stability in policy-volatile markets by distributing risk across network partners. For example, TBEA Groups subsidiaries in emerging markets mitigated institutional uncertainty by developing localized digital partnerships — while the Kazakhstan operation formed alliances with 14 domestic fintech providers to navigate banking reforms, the South African unit co-created an AI-powered regulatory tracking system with local universities.2. Architectural Ambidexterity: The ability to simultaneously maintain core operations while experimenting with policy-responsive innovations. Data from Russian industrial firms shows those allocating 12-18% of digital budgets to regulatory sandbox projects achieved 2.4× faster adaptation to new data localization laws.3. Cognitive Flexibility: Measured by what scholars call the "attention allocation index" (AAI), where firms balancing threat detection (policy risks) and opportunity sensing (regulatory gaps) outperform. Case studies reveal optimal AAI ratios between 1:1.2 and 1:1.5 correlate with 18% higher survival rates in volatile markets[2].Multinationals are adopting three emergent geoeconomic strategies to navigate policy uncertainty:1. Digital Hedge Configurations. Firms establish parallel digital infrastructures across policy regimes. For instance, European manufacturers in Brazil maintain both cloud-based (for global integration) and edge-computing systems (for data sovereignty compliance), with an average 17% cost premium offset by 29% greater operational continuity.2. Regulatory Arbitrage Networks. Platform business models enable real-time value chain reconfiguration. A study of 45 global supply chains showed firms using AI-driven trade policy algorithms reduced tariff impact by 38% through dynamic rerouting. The "MantaMESH" platform exemplifies this, helping SMEs navigate 142 trade agreements with machine-learning recommendations.3. Policy Co-Creation Engagements. Proactive firms shape regulatory environments. In Russia, digital industrial leaders collaborated on 73% of Industry 4.0 policy formulations, securing favorable terms that boosted their export complexity index by 1.8 points versus non-participants. The Centre for the Fourth Industrial Revolution Brazil demonstrates how multinationals can influence emerging digital governance frameworks.Geographic diversification patterns reveal clustering in "digital policy havens" — locations combining advanced infrastructure with predictable governance. Vietnam, Poland, and Chile have attracted 42% of recent digital FDI inflows by offering policy stability indices 35% above emerging market averages.This study establishes that managing competitiveness under policy uncertainty requires multinational firms to develop symbiotic digital-geoeconomic strategies. Digital transformation serves as both a shock absorber and opportunity engine, with neural network analysis confirming its strong predictive power (0.82) for policy resilience. This dynamic is particularly evident in BRICS nations, which present acute challenges — such as policy volatility scores 2.1 times higher than the OECD average — yet also offer unique opportunities through rapid digital industrialization. To navigate this landscape, firms must leverage quantifiable metrics like the Spatial Restructuring Coefficient (SRC) and Digital Resilience Score (DRS) for strategic decision-making. The most successful organizations combine technological adoption with geoeconomic intelligence, securing a competitive advantage of 18 – 27% in uncertain environments.Future research should explore longitudinal effects of digital sovereignty policies and the role of generative AI in predictive policy adaptation. As the Fourth Industrial Revolution accelerates, the intersection of geoeconomics and digital strategy will increasingly determine multinational competitiveness.
Номер журнала Вестник науки №5 (86) том 4
Ссылка для цитирования:
He Hongjiang MANAGING COMPETITIVENESS UNDER POLICY UNCERTAINTY: A GEOECONOMIC PERSPECTIVE FOR MULTINATIONAL FIRMS // Вестник науки №5 (86) том 4. С. 34 - 38. 2025 г. ISSN 2712-8849 // Электронный ресурс: https://www.вестник-науки.рф/article/23273 (дата обращения: 08.07.2025 г.)
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