Betting on indigenous innovation or relying on FDI: The Chinese strategy for catching-up

Do Foreign Firms in China Incur a Liability of Foreignness? The Local Chinese Firms’ Perspective

“…Hypotheses 1, 2, and 3 are supported. These results are supported by the totality of findings revealed from many recent research studies on technology development and the innovation capabilities of local firms (e.g., Hemphill & White, ; Yi, Wang, & Kafouros, ; Zheng, ), the learning and spillover effect of inward FDI in China (e.g., He & Mu, ; Wu, Hoon, & Zhang, ; Tang & Hussler, ), the knowledge and technology absorptive capacity of Chinese firms (e.g., Hu & Mu, ; X. Li, ), the competitive advantages and disadvantages of emerging Chinese MNEs (e.g., Prange, ; Sun et al, ; Wu et al, ), and developed country MNEs’ innovation in emerging markets (Nonis & Relyea, ). It is suggested that both the Chinese and the foreign firms operating in the Chinese market have been taking measures to address their respective disadvantages and further enhance their strengths (Nonis & Relyea, ), while significant gaps in various advantages such as knowledge, technologies, and innovation capacity between the local Chinese and foreign firms effectively remain (Sun et al, , ; Yi et al, ).…”

“…The inflow of technology that goes hand‐in‐hand with FDI is then modified and transformed to adapt to local market needs. Thus, original and basic foreign R&D activities in China are comparatively low (Tang & Hussler, ).…”

“…The inflow of technology that goes hand-in-hand with FDI is then modified and transformed to adapt to local market needs. Thus, original and basic foreign R&D activities in China are comparatively low (Tang & Hussler, 2011). International acquisitions can also be an effective way to acquire knowledge in the form of technological capabilities, management, and strategic skills (Cui, Jiang, & Stening, 2011).…”

Power in the 21st Century

“…Whereas this kind of business model thus far has been extremely successful in terms of growth and turnover 17 , it has not yet led to large absorption of technologies or the infusion of genuine inventiveness (Tang and Hussler 2011;Breznitz and Murphee 2011). Whereas this kind of business model thus far has been extremely successful in terms of growth and turnover 17 , it has not yet led to large absorption of technologies or the infusion of genuine inventiveness (Tang and Hussler 2011;Breznitz and Murphee 2011).…”

Case analysis of imitative innovation in Chinese manufacturing SMEs: Products, features, barriers and competences for transition

“…A number of researches were conducted to explore the transition from imitation to innovation in China from institutional and policy perspectives (Dobson & Safarian, 2008;Hu & Mathews, 2008;Tang & Hussler, 2011;Xie & White, 2006). At firm level researchers are more interested in comparing the performance of the two strategies (Liu, 2011;Zhou, 2006), and organizational learning during imitation (Chen & Qu, 2003;Minagawa, Trott, & Hoecht, 2007;Xie, 2004;Xie & Wu, 2003).…”