Research suggests that geopolitical tension can influence MNE operations in host countries, but it remains an open question how geopolitical tension shapes indigenous firms’ strategy. Drawing upon geopolitical jockeying and resource dependence perspectives, we postulate that geopolitical tension may motivates indigenous firms to build political capital. We further propose that intents of building political capital are contingent upon resource dependence relationships, consisting of resource competition and resource exchange. Our findings indicate that resource competition with the foreign (market presence of foreign investments) strengthens the effect of geopolitical tension, whereas resource exchange with the foreign (trade openness with foreign firms) weakens this effect.
