How Does Host Country's Social Trust Shape Entry Mode of MNEs: Evidence from China's Global Investments in Mega-Infrastructure Projects

Research on entry modes often overlooks how informal institutions shape choices in temporary mega-infrastructure projects (MIPs). We address this by integrating a "time-compression" perspective with a "legitimacy supply-and-demand" framework. We posit that host-country social trust acts as a swift governance mechanism, substituting for long-term relationship building and making non-greenfield modes-which offer immediate embeddedness-more attractive than greenfield control. Analyzing 2540 Chinese overseas MIPs (2005-2020), we find that higher social trust significantly reduces the likelihood of greenfield entry. However, this mechanism is contingent. On the demand side, political sensitivity reveals the structural limits of trust, showing no intensification effect in high-stakes environments. Conversely, on the supply side, firm global reputation attenuates the impact of trust. High reputation acts as a strategic substitute for partnerbased legitimacy, allowing firms to retain autonomy via greenfield entry. These findings demonstrate that the interplay of external constraints and internal resources fundamentally reshapes the strategic value of social trust in temporary organizations.