Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-10T17:31:26.329Z Has data issue: false hasContentIssue false
  • English
  • Français

Product Innovations in Emerging Economies: The Role of Foreign Knowledge Access Channels and Internal Efforts in Chinese Firms

Published online by Cambridge University Press:  02 February 2015

Jing Li ,
Dong Chen  and
Daniel M. Shapiro
Jing Li
Affiliation:
Simon Fraser University, Canada
Dong Chen
Affiliation:
Peking University, China
Daniel M. Shapiro
Affiliation:
Simon Fraser University, Canada
Get access Rights & Permissions [Opens in a new window]

Abstract

In this paper, we theoretically and empirically investigate factors that contribute to product innovation by firms in emerging markets. Combining the innovation literature with the latecomer literature on ‘catch-up’ strategies of firms in newly industrialized economies, we posit that access to foreign knowledge is essential for fostering product innovation. In particular, we investigate how innovation clusters formed by inward foreign direct investments in an emerging market and export activities of a firm are effective channels for acquiring foreign knowledge. We also suggest firms that invest in research and development and marketing activities benefit further from access to foreign knowledge due to increased absorptive capacity. Empirically, we employ information on over 160,000 indigenous manufacturing firms in China in 2005–2006. We find strong empirical support for our theoretical framework and conclude by discussing the implications for both theory and managerial practice.

Keywords

Chinaclusterslearning by exportingmarketingproduct innovationresearch and development (R&D)产品创新集群出口学习研发市场营销中国
Type
Articles
Information
Management and Organization Review , Volume 6 , Issue 2 , July 2010 , pp. 243 - 266
Copyright
Copyright © International Association for Chinese Management Research 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Ahuja, G. 2000. Collaboration networks, structural holes, and innovation: A longitudinal study. Administrative Science Quarterly, 45(3): 425–455.Google Scholar
Ahuja, G., & Katila, R. 2001. Technological acquisitions and the innovation performance of acquiring firms: A longitudinal study. Strategic Management Journal, 22(3): 197–219.Google Scholar
Aiken, L. S., & West, S. G. 1991. Multiple regression: Testing and interpreting interactions. Thousand Oaks, CA: Sage Publications.Google Scholar
Almeida, P., & Kogut, B. 1999. Localization of knowledge and the mobility of engineers in regional networks. Management Science, 45(7): 905–917.Google Scholar
Altenburg, T., Schmitz, H., & Stamm, A. 2008. Breakthrough? China's and India's transition from production to innovation. World Development, 36(2): 325–344.Google Scholar
Arrunada, B., & Vazquez, X. H. 2006. When your contract manufacturer becomes your competitor. Harvard Business Review, 84(9): 135–144.Google Scholar
Atuahene-Gima, K., & Ko, A. 2001. An empirical investigation of the effect of market orientation and entrepreneurship orientation alignment on product innovation. Organization Science, 12(1): 54–74.CrossRefGoogle Scholar
Audretsch, D., & Feldman, M. 1996. R&D spillovers and the geography of innovation and production. American Economic Review, 86(3): 630–640.Google Scholar
Bell, M., & Pavitt, K. 1993. Technological accumulation and industrial growth: Contrasts between developed and developing countries. Industrial & Corporate Change, 2(2): 157–210.Google Scholar
Bernard, A., & Jensen, J. B. 1999. Exceptional exporter performance: Cause, effect, or both? Journal of International Economics, 47(1): 1–25.Google Scholar
Brown, S., & Eisenhardt, K. 1995. Product development: Past research, present findings and future directions. Academy of Management Review, 20(2): 343–378.Google Scholar
Business Week. 2008. Most innovative companies: Smart ideas for tough times. April 28: 61–63.Google Scholar
Chandy, R., Hopstaken, B., Narasimhan, O. M., & Prabhu, J. 2006. From invention to innovation: Conversion ability in product development. Journal of Marketing Research, 43(3): 494–508.CrossRefGoogle Scholar
Child, J., & Rodrigues, S. B. 2005. The internationalization of Chinese firms: A case for theoretical extension? Management and Organization Review, 1(3): 381–410.Google Scholar
China Statistical Yearbook. 2006. Beijing, China: National Bureau of Statistics of China.Google Scholar
Cho, D.-S., Kim, D.-J., & Rhee, D. K. 1998. Latecomer strategies: Evidence from the semiconductor industry in Japan and Korea. Organization Science, 9(4): 489–505.Google Scholar
Choung, J.-Y., Hwang, H.-R., Choi, J.-H., & Rim, M.-H. 2000. Transition of latecomer firms from technology users to technology generators: Korean semiconductor firms. World Development, 28(5): 969–982.Google Scholar
Chudnovsky, D., Lopez, A., & Pupato, G. 2006. Innovation and productivity in developing countries: A study of Argentine manufacturing firms' behavior (1992–2001). Research Policy, 35(2): 266–288.Google Scholar
Clerides, S. K., Lach, S., & Tybout, J. R. 1998. Is learning by exporting important? Micro-dynamic evidence from Colombia, Mexico, and Morocco. Quarterly Journal of Economics, 113(3): 903–947.Google Scholar
Cohen, W. M., & Levinthal, D. A. 1989. Innovation and learning: The two faces of R&D. Economic Journal, 99(397): 569–596.Google Scholar
Cohen, W. M., & Levinthal, D. A. 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1): 128–152.CrossRefGoogle Scholar
Danneels, E. 2002. The dynamics of product innovation and firm competencies. Strategic Management Journal, 23(12): 1095–1121.CrossRefGoogle Scholar
Dawar, N., & Dai, N. 2003. Cola wars in China: The future is here. Teaching case at Western Ontario, University of Richard Ivey School of Business.Google Scholar
Dosi, G. 1988. Sources, procedures, and microeconomic effects of innovation. Journal of Economics Literature, 26(3): 1120–1171.Google Scholar
Dougherty, D. 2001. Reimagining the differentiation and integration of work for sustained product innovation. Organization Science, 12(5): 612–621.CrossRefGoogle Scholar
Dunning, J. H., & Narula, R. 1995. The R&D activities of foreign firms in the United States. International Studies of Management & Organization, 25(1/2): 39–74.CrossRefGoogle Scholar
Evenson, R., & Westphal, L. 1995. Technological change and technology strategy. In Srinivasan, T. N. & Berhman, J. (Eds.), Handbook of development economics, vol. 3: 2209–2299. Amsterdam: North-Holland Press.Google Scholar
Fan, C. C., & Scott, A. J. 2003. Industrial agglomeration and development: A survey of spatial economic issues in East Asia and a statistical analysis of Chinese regions. Economic Geography, 79(3): 295–319.Google Scholar
Globerman, S., Shapiro, D., & Vining, A. 2005. Clusters and intercluster spillovers: Their influence on the growth and survival of Canadian information technology firms. Industrial and Corporate Change, 14(1): 1–34.CrossRefGoogle Scholar
Grant, R. M. 1996. Toward a knowledge-based theory of the firm. Strategic Management Journal, 17(Special issue): 109–122.CrossRefGoogle Scholar
Griffin, A., & Hauser, J. R. 1993. The voice of the customer. Marketing Science, 12(1): 1–27.Google Scholar
Grossman, G. M., & Helpman, E. 1993. Innovation and growth in the global economy. Cambridge, MA: MIT Press.Google Scholar
Hagedoorn, J., & Schakenraad, J. 1994. The effect of strategic technology alliances on company performance. Strategic Management Journal, 15(4): 291–309.CrossRefGoogle Scholar
Han, J. K., Kim, N., & Srivastava, R. K. 1998. Market orientation and organizational performance: Is innovation a missing link? Journal of Marketing, 62(4): 30–45.Google Scholar
Hobday, M. 1995. Innovation in East Asia: The challenge to Japan. Aldershot: Edward Elgar.Google Scholar
Horng, C., & Chen, W. 2008. From contract manufacturing to own brand management: The role of learning and cultural heritage identity. Management and Organization Review, 4(1): 109–133.Google Scholar
Jaffe, A., Trajtenberg, M., & Henderson, R. 1993. Geographic localization of knowledge spillovers as evidenced by patent citations. Quarterly Journal of Economics, 108(3): 577–598.CrossRefGoogle Scholar
Jefferson, G. H., Bai, H., Guan, X., & Yu, X. 2007. R&D performance in Chinese industry. Economics of Innovation and New Technology, 15(4): 345–366.Google Scholar
Khanna, T., & Palepu, K. 1997. Why focused strategies may be wrong for emerging markets. Harvard Business Review, 75(4): 41–51.Google Scholar
Khanna, T., & Palepu, K. G. 2006. Emerging giants. Harvard Business Review, 84(10): 60–69.Google Scholar
Kim, L. 1997. Imitation to innovation: The dynamics of Korea's technological learning. Boston, MA: Harvard Business School Press.Google Scholar
Kogut, B., & Zander, U. 1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3(3): 383–397.Google Scholar
Lall, S. 1987. Learning to industrialize: The acquisition of technological capability by India. London: Macmillan.Google Scholar
Lall, S. 1992. Technological capabilities and industrialization. World Development, 20(2): 165–186.Google Scholar
Lankford, R. H., & Wyckoff, J. H. 1991. Modeling charitable giving using a Box-Cox standard Tobit model. Review of Economics and Statistics, 73(3): 460–470.Google Scholar
Lu, Q. 2000. China's leap into the information age: Innovation and organization in the computer industry. Oxford: Oxford University Press.Google Scholar
Lukas, B. A., & Ferrell, O. C. 2000. The effect of market orientation on product innovation. Journal of the Academy of Marketing Science, 28(2): 239–247.Google Scholar
Luo, Y., & Tung, R. L. 2007. International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(4): 481–498.Google Scholar
Lyles, M. A., & Salk, J. E. 1996. Knowledge acquisition from foreign parents in international joint ventures: An empirical examination in the Hungarian context. Journal of International Business Studies, 29(2): 154–174.Google Scholar
Mathews, J. A. 2002. Competitive advantages of the latecomer firm: A resource-based account of industrial catch-up strategies. Asia Pacific Journal of Management, 19(4): 467–488.CrossRefGoogle Scholar
Mathews, J. A., & Cho, D.-S. 1999. Combinative capabilities and organizational learning in late-comer firms: The case of the Korean semiconductor industry. Journal of World Business, 34(2): 139–156.CrossRefGoogle Scholar
McDonald, J. F., & Moffitt, R. A. 1980. The uses of Tobit analysis. Review of Economics and Statistics, 62(2): 318–321.Google Scholar
McKinsey & Co. 2008. The McKinsey Quarterly survey on innovation metrics. The McKinsey Quarterly Online. [Cited 7 December 2008.] Available from URL: http://www.mckinseyquarterly.com/PDFDownload.aspx?L2=21&L3=35&ar=2243Google Scholar
Meyer, K. E., & Sinani, E. 2009. When and where does foreign direct investment generate positive spillovers? A meta-analysis. Journal of International Business Studies, 40(7): 1075–1094.Google Scholar
National Bureau of Statistics of China. 2005. Annual census of industrial enterprises. Beijing: National Bureau of Statistics of China.Google Scholar
National Bureau of Statistics of China. 2006. Annual census of industrial enterprises. Beijing: National Bureau of Statistics of China.Google Scholar
Nicholls-Nixon, C. L., & Woo, C. Y. 2003. Technology sourcing and output of established firms in a regime of encompassing technological change. Strategic Management Journal, 24(7): 651–666.Google Scholar
Peng, M. W., & Heath, P. S. 1996. The growth of the firm in planned economies in transition: Institutions, organizations, and strategic choice. Academy of Management Review, 21(2): 492–528.Google Scholar
Porter, M. 1990. The competitive advantage of nations. New York: Free Press.Google Scholar
Porter, M. E. 1998. Clusters and the new economics of competition. Harvard Business Review, 76(6): 77–90.Google Scholar
Salomon, R. M., & Shaver, J. M. 2005. Learning by exporting: New insights from examining firm innovation. Journal of Economics & Management Strategy, 14(2): 431–460.Google Scholar
Saxenian, A. 1991. The origins and dynamics of production networks in Silicon Valley. Research Policy, 20(5): 423–437.Google Scholar
Shishko, R., & Rostker, B. 1976. The economics of multiple job holding. American Economic Review, 66(3): 298–308.Google Scholar
Tobin, J. 1958. Estimation of relationships for limited dependent variables. Econometrica, 26(1): 24–36.Google Scholar
White, R. E., Hoskisson, R. E., Yiu, D. W., & Bruton, G. D. 2008. Employment and market innovation in Chinese business group affiliated firms: The role of group control systems. Management and Organization Review, 4(2): 225–256.CrossRefGoogle Scholar
Zhou, C., & Li, J. 2008. Product innovation in emerging market-based international joint ventures: An organizational ecology perspective. Journal of International Business Studies, 39(7): 1114–1132.Google Scholar