Capacity utilization shifting or resource-seeking? Benefits for Chinese enterprises participating in the belt and road initiative

This study investigates the benefits gained by Chinese listed enterprises participating in China's Belt and Road Initiative (BRI). We dispel the concern that the BRI provides a way for Chinese firms to shift excess capacity, instead finding that the capacity utilization of BRI participant firms is worsening. State-owned enterprises (SOEs) are the primary contributors to this effect. More-over, we present evidence that overinvestment and decreased innovation capabilities are the underlying channels of the overcapacity problem. Finally, further analyses reveal distinct benefits accruing to the different ownership structures of BRI-participating enterprises, implying diverse motivations. We demonstrate that domestic political and overseas market resources for non-SOEs in the post-BRI period are significantly improved, which is not the case for SOEs.