How Do Latecomers Achieve Technological Catch-up? Interactive Effect Of Technological Discontinuity And Institution-driven Market

How do latecomer firms achieve technological catch-up? It is a traditional but challenging issue of innovation strategy for both academic researchers and business practitioners. However, emerging market multinational companies are burgeoning despite dual latecomer disadvantage of technology accumulation and market development, and this becomes a heated topic for both theory and practice. From the practical background, strategic opportunity windows spring up for latecomer firms in emerging economy. On one hand, global technological progress speeds up the iteration of new technology, leading to technological discontinuity which alleviates the liability of technology accumulation and provids latecomer firms with a better chance for innovation overtaking. On the other hand, the institution-driven market creates and ensures burgeoning market demand, supporting resources and bargaining power improvement in R&D collaboration, which provides a better starting point for catching up. From the theoretical background, previous catching-up theory that emphasis latecomers’ dual disadvantage has been challenged by new enabling factors of institutions, innovation and market from emerging countries. Thus, further consideration is needed for firms to design and conduct innovation catching-up strategy. This dissertation focuses on the key research question of how latecomer firms in emerging countries take advantage of technological discontinuity and institution-driven market to successfully achieve the technological catch-up.To answer the question, this dissertation contains four studies. Firstly, by theoretical elaboration and case analysis, we build a roadmap of how Chinese latecomer firms develop following the logic of innovation "follower—companion—leader". Secondly, to verify the generalizability of the findings of previous study, we analyze secondary data to examine how technological discontinuity, institution-driven market and their interactive effect on technological catch-up. Thirdly, we further explore how organizational alertness and political ties moderate the relationship between technological discontinuity, institution-driven market and technological catch-up. Finally, we conduct a multiple case study to explore how different organizational learning modes match the varied combinations of technological discontinuity and institution-driven market, thus boosts the technological catch-up of Chinese latecomer firms.Through the in-depth analysis of the four sub-researches above, this dissertation discusses and illustrates the specific mechanisms, contingent factors and evolution process of how technological discontinuity and institution-driven market affect technological catch-up in detail. The main conclusions are presented as following:(1) Combining comparative data analysis and case illustration, the first sub-research portraits the landscape of how Chinese latecomer firms catch up from followers to leaders in global innovation network. By presenting the periodic characteristics of technology "importing-integrating-leading" during the process of "going-out—going-in—going-up", the trajectory of latecomer firms’technological catch-up is developed.(2) To resolve the problem of generalizability of previous study, the second sub-research empirically investigates the effect of dual forces and their interative effect on technologiacal catch-up, with data collected by technological discontinuity rating and national policy gathering within the window period of 2003—2012. Analyzing the result, we find that technological discontinuity imposes insignificantly a positive influence on latercomer technological catch-up, while institution-driven market and their interactive effect impose significantly a positive effect on latecomer technological catch-up.(3) Following the second sub-research, the third further identifies two contingent factors:organizational alertness which measures a firm’s potential capability of sensing change, and political ties which depicts political capital resulted from linkage with institutional environment. Both of the moderators can significantly enhance the effect of technological discontinuity, institution-driven market on technological catch-up.(4) The forth sub-research is a multiple case study, which displays four representative successful Chinese latecomer firms, and discussees how different combination modes of technological discontinuity and institution-driven market affect learning modes choices of firms. The results indicate that four organizational learning modes——Dual-emphasizing, Intra-controlling, Outer-planting and Soucing——that are used to improve the effect of technological catch-up for latecomer firms.This dissertation has important theoretical and practical contributions:(1) Complementing to the study of process mechanism of latecomer firms in emerging countries achieving technological catch-up. Despite the lack of focus on how latecomer firms taking advantage of technology and market opportunity window to facilitate global R&D network for technological catch-up, most of the extant researches ignore the specific emerging context. This dissertation innovatively identifies the key concept of "institution-driven market", which emerges from the institutional context of China. In addtion, the theoretical elaboration of dual opportunity window for boosting technological catch-up challenges traditional dual liability of latecomer firms in technological catch-up literature. Further, the identification of situational variables of organizational alertness and political ties is helpful for future research of contingent factors of technological catch-up for latecomer firms in emerging economy.(2) Contributing to the organizational learning literature by contextualization. This dissertation constructs the match of technological discontinuity, institution-driven market and inward/outward learning modes, which responds to the call of national R&D "Going-out" and "Bringing-in" strategy. To make further steps, this dissertation summarizes and defines four latecomer learning strategy as Dual-emphasizing, Intra-controlling, Outer-planting and Soucing, which fertilizes the contextualization of learning theory in emerging context.(3) Providing practical implications for latecomer firms and our nation. The results can provide vivid reference for firms that facing technology—market opportunity window and conducting inter-pioneer learning activities, and provide strategic guidance for latecomer firms aiming to achieve technological catch-up. What’s more, policy recommendations are provided for national innovation-driven strategy development and related innovation infrastructural improvement.