This chapter first addresses the question of whether latecomer firms will catch up with and eventually overtake the incumbent by merely imitating the incumbent or by initiating innovation different from those of incumbents. Section 3 deals with the coevolution of firms and surrounding institutions in the context of post-reform China where firms with diverse ownership have emerged. Productivity of locally owned enterprises is shown to eventually catch up with foreign-owned enterprises, because institutions developing over time were better exploited by the former than the latter. It suggests that private firms cannot prosper without sound institutions, and institutional development may be useless unless there are private firms that can benefit from this institutional development. Section 4 will elaborate the case of one region, Hsinchu City, in Taiwan to show that its long-term trajectory of upgrading is driven by the rise of a leading big business, namely TSMC. The final section finds that the behavior of Korean firms earlier corresponded with that of typical catching-up firms (e.g., prioritizing growth over profitability, borrowing and investing more, and specializing in short-cycle technologies) but currently show radical changes in their behavioral pattern to show signs of convergence toward the behavior of mature firms in the US.