Technological Innovation as a Source of Chinese Multinationals’ Firm-Specific Advantages and Internationalization

He, Shaowei, Khan, Zaheer, Lew, Yong Kyu, Fallon, Grahame (2019) Technological Innovation as a Source of Chinese Multinationals’ Firm-Specific Advantages and Internationalization. International Journal of Emerging Markets, 14 (1). pp. 115-133. ISSN 1746-8809. (doi:10.1108/IJoEM-02-2017-0059)

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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.

Item Type: Article
DOI/Identification number: 10.1108/IJoEM-02-2017-0059
Uncontrolled keywords: emerging market multinational enterprises, innovation capability, firm specific advantages, internationalization, knowledge; China
Divisions: Faculties > Social Sciences > Kent Business School
Depositing User: Zaheer Khan
Date Deposited: 15 May 2018 09:12 UTC
Last Modified: 29 May 2019 20:32 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/67023 (The current URI for this page, for reference purposes)
Khan, Zaheer: https://orcid.org/0000-0001-5538-3123
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