From classic failures to global competitors: Business organization and economic development in the Chinese semiconductor industry

The transformation of the Chinese semiconductor industry from a small state-owned sector into a global competitor is a spectacular episode of China's economic success. This thesis documents the developmental history of this industry, from its stagnant state-dominated eras (prior to 2000) to a more successful stage led by innovative business enterprises (after 2000). The Chinese experience of developing the high-tech semiconductor industry raises several questions about business organization and economic development: Why could some companies be more innovative than others? How does the growth of innovative business organizations, in which economic development is generated, occur? Drawing on the theory of innovative enterprise (Lazonick, 2002, 2010), this thesis attributes the cause of innovative successes to strategic, organizational and financial conditions of the business enterprises, which have been supported by institutional changes in the Chinese society.