State capital in the energy transition: host-state agency and geopolitical proximity in service-sector coupling

State-owned actors increasingly operate in global production networks (GPNs), yet host-state agency in strategic coupling remains underexamined. This paper develops an analytical framework to explain how strategic coupling unfolds between host states and foreign state-owned companies by integrating three dynamics: host states’ bargaining conditions via enabling, managing and embedding mechanisms, state-capital hybrids’ alignment strategies, and geopolitical proximity as an enabling condition. Drawing on a case study of Singaporean state-owned energy service providers in Vietnam’s renewables sector, we show how Vietnam shapes bargaining conditions balancing investment needs with sovereignty concerns, how Singaporean actors align with these conditions, and how multi-scalar geopolitical proximity facilitates strategic coupling. The paper advances GPN and state capitalism literature in three ways: (1) by foregrounding host-state strategies beyond firm-centric accounts; (2) by specifying foreign state-capital hybrids’ alignment strategies; (3) by introducing geopolitical proximity as a distinct multi-scalar relational condition amid rising geo-economic tensions.