Reverse rent-seeking in government–enterprise cooperation: A longitudinal case study drawing on the ANT framework

This longitudinal case study examines the attraction of a service-oriented multinational corporation (MNC) to a Chinese industrial park drawing on grounded theory and actor-network theory (ANT). The findings highlight that reverse rent-seeking – with the enterprise as the rent-setter and the local government as the rent-seeker – significantly contributed to the failure of investment promotion and undermined sustainable local operations. This behaviour emerged from the interaction of an asymmetric reciprocal exchange, a two-sided principal–agent structure, information asymmetry, and interest misalignment. An asymmetric reciprocal exchange created rent-seeking space by requiring the local government to provide resources, concessions, and management authority without equivalent MNC commitment. A two-sided principal–agent structure then generated information asymmetry and interest misalignment, enabling the MNC’s regional managers – the focal actors – to exploit this space through opportunism. This study yields three practical implications for mitigating reverse rent-seeking risks in investment promotion: (1) standardising investment promotion procedures and contractual documentation, with the contributions, ownership, and treatment of material assets and equipment clearly specified; (2) involving independent third-party institutions in project oversight to strengthen transparency and accountability during negotiation and implementation; and (3) establishing expert evaluation, disclosure, and post-establishment monitoring mechanisms to reduce information asymmetry and limit opportunities for opportunistic behaviour.