Navigating the Tripartite Cooperation Realm: Insights from the Literature

The previous chapter, Chap. 2 , primarily focused on the country-level dynamics of tripartite cooperation. This chapter shifts the focus to introduce theoretical frameworks that explore the actions and determinants influencing firms’ participation in tripartite cooperation. Both Chinese and Western multinational enterprises (MNEs) possess advanced technology and greater financing abilities, enabling them to engage in cross-border, large-scale economic infrastructure projects, such as power stations, roads, railways, and ports. This chapter retrospectively reviews the previous literature and aims to identify what is already known and where there are still gaps about the central research question of this study: Why do participants opt for a tripartite cooperation model, despite potentially bearing additional transaction costs? To answer this question, the theoretical research primarily utilises New Institutional Economics (NIE), drawing on insights from transaction cost economics, international relation theories and internalisation theories to understand tripartite cooperation projects. It extends these theoretical frameworks to the realm of tripartite cooperation. Specifically, this research applies transaction cost and internalisation theories to understand tripartite cooperation projects and the concept of transaction costs in the context of infrastructure projects. The main argument is that tripartite cooperation functions as a form of semi-internalisation – it is more internalised than transactions in the open market or at arm’s length but less internalised than purely bilateral cooperation.