Conclusion

Abstract

This study has developed the diversification mechanism for indigenous firms under competition with foreign firms. As the precondition of diversification in organization, this study has verified that technologies have not always diffused to China’s electronics industry. To do it, Chapter 3 has analyzed whether or not inward foreign direct investment (FDI) has a negative impact on the growth of Chinese firms. The results have shown that inward FDI has the negative influence on sectors facing large gaps in technology and insufficient operational experience. Thus, despite rapid industrial development under globalization, the results have shown that technologies have not completely diffused to China. Therefore, indigenous firms relatively have focused more on the sales stage than the development stage to compensate for the technology gap under fierce competition with foreign firms.