Advertisement

From Knowledge Transfer of MNEs to Upgrading of Chinese OEM Suppliers: Theoretical Analysis and Case Study

  • Shenghui Wang
  • Jinghong Zhang
Living reference work entry

Abstract

Participating in global value chain (GVC) under OEM arrangements provides Chinese OEM suppliers with opportunity and possibility to acquire knowledge from multinational enterprises (MNEs) and achieve capability upgrading. This paper combines insights from GVC and organizational learning literature to develop a framework for the analysis of the process from knowledge transfer from MNEs to capability upgrading of OEM suppliers. First, the knowledge transfer activities are divided into four types based onto the nature of transfer knowledge and the knowledge classification. Second, the dynamic process in which OEM suppliers assimilate the transferred knowledge is explored. Third, the effect of knowledge transfer on OEM suppliers’ capability upgrading and its limitation is discussed. After the theoretical analysis, this paper examines a Chinese kitchen-appliance company, Tsingtao XB Electrical Appliances, analyzing the knowledge transfer activities from MNEs to XB, the knowledge assimilation within XB, and the effect of knowledge transfer on XB’s capability upgrading.

Keywords

GVC Knowledge transfer Chinese OEM suppliers Upgrading Tsingtao XB Electrical Appliances Company 

References

  1. Appelbaum R, Gereffi G (1994) Power and profits in the apparel commodity chain. In: Bonacich E, Cheng L, Chinchilla N, Hamilton N, Ong P (eds) Global production: the apparel industry in the Pacific rim. Temple University Press, PhiladelphiaGoogle Scholar
  2. Bair J (2009) Global commodity chains: genealogy and review. In: Bair J (ed) Frontiers of commodity chain research. Stanford University Press, StanfordGoogle Scholar
  3. Barba-Navaretti G, Venables AJ (2004) Multinational firms in the world economy. Princeton University Press, PrincetonGoogle Scholar
  4. Cano-Kollmann M, Cantwell J, Hannigan TJ, Mudambi R, Song J (2016) Knowledge connectivity: an agenda for innovation research in international business. J Int Bus Stud 47:255–262CrossRefGoogle Scholar
  5. Castellani D, Zanfei A (2006) Multinational firms, innovation and productivity. Edward Elgar, CheltenhamCrossRefGoogle Scholar
  6. Cyhn J (2000) Technology development of Korea’s electronics industry: learning from multinational enterprises through OEM. Eur J Dev Res 12(1):159–187CrossRefGoogle Scholar
  7. Cohen WM, Levinthal DA (1990) Absorptive capacity: a new perspective on learning and innovation. Adm Sci Q 35:128–153CrossRefGoogle Scholar
  8. Dussel Peters E, Ruiz Durán C, Piore M (2002) Learning and the limits of foreign partners as teachers. In: Gereffi G, Spener D, Bair J (eds) Free trade and uneven development: the North American apparel industry after NAFTA. Temple University Press, PhiladelphiaGoogle Scholar
  9. Ernst D (2002) Global production networks and the changing geography of innovation systems: implications for developing countries. Econ Innov New Technol 11(6):497–523CrossRefGoogle Scholar
  10. Ernst D, Kim L (2002) Global production networks, know ledge diffusion and local capability formation. Res Policy 31:1417–1429CrossRefGoogle Scholar
  11. Gereffi G (1994) The organization of buyer-driven global commodity chains: how US retailers shape overseas production networks. In: Gereffi G, Korzeniewicz M (eds) Commodity chains and global capitalism. Praeger, WestportGoogle Scholar
  12. Gereffi G, Humphrey J, Sturgeon T (2005) The governance of global value chains. Rev Int Polit Econ 12(1):78–104CrossRefGoogle Scholar
  13. Gibbon P (2008) Governance, entry barriers, upgrading: a re-interpretation of some GVC concepts from the experience of African clothing exports. Compet Chang 12(1):29–48CrossRefGoogle Scholar
  14. Giuliani E, Pietrobelli C, Rabellotti R (2005) Upgrading in global value chains: lessons from Latin American clusters. World Dev 33(4):549–573CrossRefGoogle Scholar
  15. Huang YT (2010) Enhancement of product development capabilities of OEM suppliers: inter- and intra-organisational learning Department of Business Administration. J Bus Ind Mark 25(2):147–158CrossRefGoogle Scholar
  16. Humphrey J, Schmitz H (2002) How does insertion in global value chains affect upgrading in industrial clusters? Reg Stud 36(9):1017–1027CrossRefGoogle Scholar
  17. Humphrey J, Schmitz H (2004) Chain governance and upgrading: taking stock. In: Schmitz H (ed) Local enterprises in the global economy: issues of governance and upgrading. Elgar, CheltenhamGoogle Scholar
  18. Ivarsson I, Alvstam CG (2011) Upgrading in global value-chains: a case study of technology-learning among IKEA-suppliers in China and Southeast Asia. J Econ Geogr 11:731–752CrossRefGoogle Scholar
  19. Kaplinsky R (2000) Globalisation and unequalisation: What can be learned from value chain analysis? J Dev Stud 37(2): 117–146CrossRefGoogle Scholar
  20. McDermott GA, Corredoira RA (2010) Network composition, collaborative ties, and upgrading in emerging-market firms: lessons from the Argentine autoparts sector. J Int Bus Stud 41(2):308–329CrossRefGoogle Scholar
  21. Morrison A, Pietrobelli C, Rabellotti R (2008) Global value chains and technological capabilities: a framework to study learning and innovation in developing countries. Oxf Dev Stud 36(1):39–58CrossRefGoogle Scholar
  22. Navas-Aleman L (2011) The impact of operating in multiple value chains for upgrading: the case of the Brazilian furniture and footwear industries. World Dev 39(8):1386–1397CrossRefGoogle Scholar
  23. Nonaka I, Takeuchi J (1995) The knowledge creating company: how Japanese companies creates the dynamics of innovation. Oxford University Press, New YorkGoogle Scholar
  24. Pietrobelli C, Rabellotti R (2006) Upgrading to compete: global value chains, clusters, and SMEs in Latin America. Inter-American Development BankGoogle Scholar
  25. Pietrobelli C, Rabellotti R (2007) Upgrading to compete. Global value chains, clusters and SMEs in Latin America. Harvard University Press, CambridgeGoogle Scholar
  26. Pietrobelli C, Rabellotti R (2011) Global value chains meet innovation systems: are there learning opportunities for developing countries? World Dev 39(7):1261–1269CrossRefGoogle Scholar
  27. Polanyi M (1962) Personal knowledge: towards a post-critical philosophy. University of Chicago Press, ChicagoGoogle Scholar
  28. Schmitz H (1995) Small shoemakers and Fordist giants: Tale of a supercluster. World Dev 23(1):9–28CrossRefGoogle Scholar
  29. Schmitz H (ed) (2004) Local enterprises in the global economy: issues of governance and upgrading. Edward Elgar, CheltenhamGoogle Scholar
  30. Schmitz H (2006) Learning and earning in global garment and footwear chains. Eur J Dev Res 18(4):546–571CrossRefGoogle Scholar
  31. Wortzel L, Wortzel H (1981) Export marketing strategies for NIC and LDC-based firms. Columbia J World Bus 16(1):51–60Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  • Shenghui Wang
    • 1
  • Jinghong Zhang
    • 2
  1. 1.Central University of Finance and EconomicsBeijingChina
  2. 2.Beijing Language and Culture UniversityBeijingChina

Section editors and affiliations

  • Song Lin
    • 1
  1. 1.Business SchoolCentral University of Finance and EconomicsBeijingChina

Personalised recommendations