Abstract
This study examines how entrepreneurs from the Taiwan region adapt their strategies under the sustained cross-Strait geopolitical tension. Adopting a social capital perspective, we analyse 50 semi-structured interviews with 31 returnee and cross-Strait entrepreneurs conducted in two waves over 20 months. Inductive analysis identifies three recurrent strategic paths. Returning Salmon redeploy selected functions to the Taiwan region while retaining carefully managed external linkages and moving toward higher specification activities. Embedded Ants mobilise collective resources, bridge networks, and exchange knowledge within trusted groups in the Taiwan region to match the scale and pace of larger competitors. Silent Buffalo maintain a low public profile, pursue incremental innovation, and sustain niche leadership through discretion and disciplined execution rooted in cultural and commercial legacies. We develop a process model that links geopolitical and economic triggers to sensemaking and low-risk probes, and then to the enactment of these paths. The model integrates market, social, and hierarchical relations with the opportunity-motivation-ability mechanism and specifies the role of complementary capabilities. Outcomes include continuity and legitimacy, dispersion of risk, upgrading, and durable niche competitiveness. Our study extends social capital theory to a geopolitical setting and offers an archetype-based, processual account of SME adaptation across the Chinese mainland, the Taiwan region, and adjacent markets.