Technological innovation as a source of Chinese multinationals’ firm-specific advantages and internationalization

Shaowei He, Zaheer Khan, Yong Kyu Lew, Grahame Fallon

Research output: Contribution to journalArticleResearchpeer-review

Abstract

This paper examines how innovation-related firm-specific ownership advantage (FSA) plays a role in developing the competitive advantage of Chinese multinationals when they internationalize. Based on a review of the existing literature concerning foreign direct investment by emerging economy multinational enterprises (EMNEs), we identify that numerous studies explain this phenomenon on the basis of their location-bound country specific advantages. However, such views do not fully explain the key underlying factors behind the rapid rise and success of many EMNEs as these firms rapidly internationalize and develop global competitiveness in developed markets. The current research explores three leading innovative Chinese EMNEs from the engineering sector: BYD, Sany Heavy Industry and CSR China. We find that their knowledge, and particularly their innovation-creating technological knowledge has contributed greatly to their successful internationalization. The illustrative cases show that the three firms have now moved beyond the infant to the mature stage of EMNE development through developing their technological knowledge in order to realize firm-specific advantage (FSA) through internationalization. This study helps in contributing fresh reflections to the continuing debate concerning the causes of internationalization and global competitive development by EMNEs and the role of their FSAs in these processes.
Original languageEnglish
JournalInternational Journal of Emerging Markets
DOIs
Publication statusAccepted/In press - 14 May 2018

Fingerprint

Multinational enterprises
Chinese multinationals
Internationalization
Firm-specific advantages
Technological innovation
Multinational firms
Technological knowledge
Innovation
Industry
Competitive advantage
Global competitiveness
Enterprise development
Emerging economies
Chinese economy
Ownership advantages
Corporate Social Responsibility
Foreign direct investment
Factors
China

Keywords

  • China
  • Emerging market multinational enterprises
  • firm specific advantages
  • innovation capability
  • internationalization
  • knowledge

Cite this

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title = "Technological innovation as a source of Chinese multinationals’ firm-specific advantages and internationalization",
abstract = "This paper examines how innovation-related firm-specific ownership advantage (FSA) plays a role in developing the competitive advantage of Chinese multinationals when they internationalize. Based on a review of the existing literature concerning foreign direct investment by emerging economy multinational enterprises (EMNEs), we identify that numerous studies explain this phenomenon on the basis of their location-bound country specific advantages. However, such views do not fully explain the key underlying factors behind the rapid rise and success of many EMNEs as these firms rapidly internationalize and develop global competitiveness in developed markets. The current research explores three leading innovative Chinese EMNEs from the engineering sector: BYD, Sany Heavy Industry and CSR China. We find that their knowledge, and particularly their innovation-creating technological knowledge has contributed greatly to their successful internationalization. The illustrative cases show that the three firms have now moved beyond the infant to the mature stage of EMNE development through developing their technological knowledge in order to realize firm-specific advantage (FSA) through internationalization. This study helps in contributing fresh reflections to the continuing debate concerning the causes of internationalization and global competitive development by EMNEs and the role of their FSAs in these processes.",
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Technological innovation as a source of Chinese multinationals’ firm-specific advantages and internationalization. / He, Shaowei; Khan, Zaheer; Lew, Yong Kyu; Fallon, Grahame.

In: International Journal of Emerging Markets, 14.05.2018.

Research output: Contribution to journalArticleResearchpeer-review

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