Skip to main content
SpringerLink
Log in

Catch-Up Strategies of Emerging Market Firms: Lessons Learned from India and China

  • Chapter
  • First Online:
Book cover International Manufacturing Strategy in a Time of Great Flux

Part of the book series: Measuring Operations Performance ((MEOP))

Abstract

Market liberalization in emerging economies has attracted a large number of multinational enterprises that possess advanced technological and managerial capabilities to enter the market. As domestic firms in these markets are mostly technologically and managerially backward, they are pressured to catch up by acquiring strategic resources and capabilities to compete with these multinationals in the home and overseas markets. This study discusses their catch-up strategies in the form of strategic linkages building through inward internationalization, compositional offering, agglomeration, and internationalization of research and development. Such discussion is then illustrated by the selected cases of Indian and Chinese firms. The study concludes with key implications for advanced economy firms as well as emerging economy firms and governments.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Alcacer J, Chung W (2007) Location strategies and knowledge spillovers. Manag Sci 53(5):760–776

    Article  Google Scholar 

  • Almeida P, Kogut B (1999) Localization of knowledge and the mobility of engineers in regional networks. Manag Sci 45(7):905–917

    Article  Google Scholar 

  • Awate S, Larsen M, Mudambi R (2012) EMNE catch-up strategies in the wind turbine industry: Is there a trade-off between output and innovation capabilities? Glob Strategy J 2(3):205–223

    Article  Google Scholar 

  • Awate S, Larsen MM, Mudambi R (2015) Accessing vs sourcing knowledge: a comparative study of R&D internationalization between emerging and advanced economy firms. J Int Bus Stud 46(1):63–86

    Article  Google Scholar 

  • Chen MJ, Su KH, Tsai WP (2007) Competitive tension: the awareness-motivation-capability perspective. Acad Manag J 50(1):101–118

    Article  Google Scholar 

  • Cantwell J, Mudambi R (2005) MNE competence-creating subsidiary mandates. Strateg Manag J 26(12):1109–1128

    Article  Google Scholar 

  • Chen SFS (2010) A general TCE model of international business institutions: market failure and reciprocity. J Int Bus Stud 41(6):935–959

    Article  Google Scholar 

  • Chesbrough HW (2003) Open innovation: the new imperative for creating and profiting from technology. Harvard Business School Press, Boston

    Google Scholar 

  • Cohen W, Levinthal D (1990) Absorptive capacity: a new perspective on learning and innovation. Adm Sci Q 35(1):128–152

    Article  Google Scholar 

  • Cui L, Meyer KE, Hu HW (2014) What drives firms’ intent to seek strategic assets by foreign direct investment? A study of emerging economy firms. J World Bus 49(4):488–501

    Article  Google Scholar 

  • Cusumano MA, Takeishi A (1991) Supplier relations and management: a survey of Japanese, Japanese-transplant, and US auto plants. Strateg Manag J 12(8):563–588

    Article  Google Scholar 

  • Dierickx I, Cool K (1989) Asset stock accumulation and sustainability of competitive advantage. Manag Sci 35(12):1504–1511

    Article  Google Scholar 

  • Dunning JH, Lundan S (2008) Multinational enterprises and the global economy. Elgar, Cheltenham

    Google Scholar 

  • Feldman MP, Audretsch DB (1999) Innovation in cities: science-based diversity, specialization and localized competition. Eur Econ Rev 43(2):409–429

    Article  Google Scholar 

  • Glaeser EL, Kerr WR (2009) Local industrial conditions and entrepreneurship: How much of the spatial distribution can we explain? J Econ Manag Strategy 18(3):623–663

    Article  Google Scholar 

  • Grant RM (1996) Toward a knowledge-based theory of the firm. Strateg Manag J 17(special issue):109–122

    Article  Google Scholar 

  • Gulati R, Gargiulo M (1999) Where do interorganizational networks come from? Am J Sociol 104(5):1439–1493

    Article  Google Scholar 

  • Gupta AK, Govindarajan V (2000) Knowledge flows within multinational corporations. Strateg Manag J 21(4):473–496

    Article  Google Scholar 

  • Hambrick DC, Cho TS, Chen MJ (1996) The influence of top management team heterogeneity on firms’ competitive moves. Adm Sci Q 41(4):659–684

    Article  Google Scholar 

  • Hamel G (2006) The why, what and how of management innovation. Harv Bus Rev 84(2):72–84

    Google Scholar 

  • Hanson G (2000) Firms, workers, and the geographic concentration of economic activity. In: Clark GL, Feldman MP, Gertler MS (eds) The Oxford handbook of economic geography. Oxford University Press, New York, pp 477–494

    Google Scholar 

  • Hennart JF (2009) Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets. J Int Bus Stud 40(9):1432–1454

    Article  Google Scholar 

  • Humphrey J (2003) Globalization and supply chain networks: the auto industry in Brazil and India. Glob Netw 3(2):121–141

    Article  Google Scholar 

  • Johansen J, Vahlne JE (2009) The Uppsala internationalization process model revisited: from liability of foreignness to liability of outsidership. J Int Bus Stud 40(9):1411–1431

    Article  Google Scholar 

  • Jullens J (2013) How emerging giants can take on the world. Harv Bus Rev 91(12):121–125

    Google Scholar 

  • Kilduff GJ, Elfenbein HA, Staw BM (2010) The psychology of rivalry: a relationally dependent analysis of competition. Acad Manag J 53(5):943–969

    Article  Google Scholar 

  • Kittilaksanawong W (2015a) How do emerging economy firms learn to evolve from contract manufacturing to own brand management? In: Camillo AA (ed) Global enterprise management: new perspectives on challenges and future developments, vol 2. Palgrave Macmillan, London, pp 1–18

    Google Scholar 

  • Kittilaksanawong W (2015b) Value creation and appropriation in buyer–supplier relationships: governance, competition and cultures. In: Christiansen B (ed) Global supply chain management. IGI Global, Hershey, pp 127–138

    Google Scholar 

  • Kittilaksanawong W, Dai WQ (2014) Chinese outward foreign direct investment in Africa: political economy, aid and bargaining power. In: Erdoğdu MM, Christiansen B (eds) Comparative political and economic perspectives on the MENA region. IGI Global, Hershey, pp 246–260

    Google Scholar 

  • Kittilaksanawong W, Ren ZQ (2013) Innovation capability building through intermediary organizations: cases of manufacturing small- and medium-sized enterprises from China’s Zhejiang province. Asian J Technol Innov 21(S2):62–79

    Article  Google Scholar 

  • Kittilaksanawong W, Palecki C (2015) Renault–Nissan alliance: will further integration create more synergies? Ivey Publishing, Ontario

    Google Scholar 

  • Kittilaksanawong W, Chen XD, Duan CQ (2013) What drives the strategic alliance formation of transition-economy small- and medium-sized enterprises? The moderating role of intermediary organizations. In: Chan T, Cui G (eds) Multinationals and global consumers: tension, potential and competition. Palgrave Macmillan, Basingstoke, pp 40–57

    Chapter  Google Scholar 

  • Kogut B, Zander U (1992) Knowledge of the firm, combinative capabilities, and the replication of technology. Organ Sci 3(3):383–397

    Article  Google Scholar 

  • Kumaraswamy A, Mudambi R, Saranga H, Tripathy A (2012) Catch-up strategies in the Indian auto components industry: domestic firms’ responses to market liberalization. J Int Bus Stud 43(4):368–395

    Article  Google Scholar 

  • Lamin A, Livanis G (2013) Agglomeration, catch-up and the liability of foreignness in emerging economies. J Int Bus Stud 44(6):579–606

    Article  Google Scholar 

  • Li J, Kozhikode RK (2009) Developing new innovation models: shifts in the innovation landscapes in emerging economies and implications for global R&D management. J Int Manag 15(3):328–339

    Article  Google Scholar 

  • Li J, Chen D, Shapiro DM (2010) Product innovations in emerging economies: the role of foreign knowledge access channels and internal efforts in Chinese firms. Manag Organ Rev 6(2):243–266

    Article  Google Scholar 

  • Luo Y, Child J (2015) A composition-based view of firm growth. Manag Organ Rev 11(3):379–411

    Article  Google Scholar 

  • Luo Y, Tung RL (2007) International expansion of emerging market enterprises: a springboard perspective. J Int Bus Stud 38(4):481–498

    Article  Google Scholar 

  • Luo Y, Sun J, Wang SL (2011) Emerging economy copycats: capability, environment, and strategy. Acad Manag Perspect 25(2):37–56

    Article  Google Scholar 

  • Marshall A (1898) Principles of economics. Macmillan, London

    Google Scholar 

  • Mathews J (2006) Dragon multinationals: new players in 21st century globalization. Asia Pac J Manag 23(1):139–141

    Article  Google Scholar 

  • McCann BT, Folta TB (2008) Location matters: where we have been and where we might go in agglomeration research. J Manag 34(3):532–565

    Google Scholar 

  • McDermott GA, Corredoira RA (2010) Network composition, collaborative ties, and upgrading in emerging-market firms: lessons from the Argentine auto-parts sector. J Int Bus Stud 41(2):308–329

    Article  Google Scholar 

  • McGaughey SL (2002) Strategic interventions in intellectual asset flows. Acad Manag Rev 27(2):248–274

    Google Scholar 

  • Meyer KE, Sinani E (2009) When and where does foreign direct investment generate positive spillovers? A meta-analysis. J Int Bus Stud 40(7):1075–1094

    Article  Google Scholar 

  • Mudambi R (2008) Location, control and innovation in knowledge-intensive industries. J Econ Geogr 8(5):699–725

    Article  Google Scholar 

  • Mudambi R, Navarra P (2004) Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs. J Int Bus Stud 35(5):385–406

    Article  Google Scholar 

  • Mudambi R, Swift T (2012) Multinational enterprises and the geographical clustering of innovation. Ind Innov 19(1):1–21

    Article  Google Scholar 

  • Oxley JE, Sampson RC (2004) The scope and governance of international R&D alliances. Strateg Manag J 25(8–9):723–749

    Article  Google Scholar 

  • Peng MW (2003) Institutional transitions and strategic choices. Acad Manag Rev 28(2):275–296

    Google Scholar 

  • Porter ME (1998) Clusters and the new economics of competition. Harvard Bus Rev 76(6):77–90

    Google Scholar 

  • Rodan S, Galunic C (2004) More than network structure: how knowledge heterogeneity influences managerial performance and innovativeness. Strateg Manag J 25(6):541–562

    Article  Google Scholar 

  • Saxenian A (1991) The origins and dynamics of production networks in Silicon Valley. Res Policy 20(5):423–437

    Article  Google Scholar 

  • Staw B, Sandelands LE, Dutton JE (1981) Threat-rigidity effects in organizational behavior: a multilevel analysis. Adm Sci Q 26(4):501–524

    Article  Google Scholar 

  • Uhlenbruck K, Meyer KE, Hitt MA (2003) Organizational transformation in transition economies: resource-based and organizational learning perspectives. J Manag Stud 40(2):257–282

    Article  Google Scholar 

  • Van den Bosch FAJ, Volberda HW, De Boer M (1999) Coevolution of firm absorptive capacity and knowledge environment: organizational forms and combinative capabilities. Organ Sci 10(5):551–568

    Article  Google Scholar 

  • von Zedtwitz M (2004) Foreign R&D laboratories in China. R&D Manag 34(4):439–442

    Article  Google Scholar 

  • von Zedtwitz M, Gassman O (2002) Market versus technology drive in R&D internationalization: four different patterns of managing research and development. Res Policy 31(4):569–588

    Article  Google Scholar 

  • Winter S (2003) Understanding dynamic capabilities. Strateg Manag J 24(10):991–995

    Article  Google Scholar 

  • Zahra SA, George G (2002) Absorptive capacity: a review, reconceptualization and extension. Acad Manag Rev 27(2):185–203

    Google Scholar 

  • Zeng M, Williamson PJ (2007) Dragons at your door: how Chinese cost innovation is disrupting the rules of global competition. Harvard Business School Press, Boston

    Google Scholar 

  • Zhang Y, Yang SY (2015) Chery automobile: Chinese firms catching up. Ivey Publishing, Ontario

    Google Scholar 

Download references

Acknowledgment

This work was supported by JSPS KAKENHI Grant No. 15K03694.

Author information

Authors and Affiliations

  1. Faculty of Economics, Graduate School of Humanities and Social Sciences, Saitama University, 255 Shimookubo, Sakura Ward, Saitama Prefecture, Saitama, 338-8570, Japan

    Wiboon Kittilaksanawong

Authors
  1. Wiboon Kittilaksanawong
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Wiboon Kittilaksanawong .

Editor information

Editors and Affiliations

  1. Trinity Business School, Trinity College Dublin Trinity Business School, Dublin, Ireland

    Louis Brennan

  2. London College of Fashion, University of the Arts London London College of Fashion, London, United Kingdom

    Alessandra Vecchi

Rights and permissions

Reprints and permissions

Copyright information

© 2017 Springer International Publishing Switzerland

About this chapter

Cite this chapter

Kittilaksanawong, W. (2017). Catch-Up Strategies of Emerging Market Firms: Lessons Learned from India and China. In: Brennan, L., Vecchi, A. (eds) International Manufacturing Strategy in a Time of Great Flux. Measuring Operations Performance. Springer, Cham. https://doi.org/10.1007/978-3-319-25351-0_4

Download citation

Publish with us

Policies and ethics

Search

Navigation