Friday, November 6, 2015

Advantages and Challenges of Chinese MNEs in Global Competition

DOZ Yves L., WILSON Keeley
Advantages and Challenges of Chinese MNEs in Global Competition in China’s Innovation: Challenge: Overcoming the Middle Income Trap A. Y. Lewin, M. Kenney, J. P. Murmann (Eds), Cambridge University Press (forthcoming)

There has been little research into the extent to which leading Chinese firms are globalising their innovation activities and the strategies and integration processes they are implementing to achieve this. We argue that the size and nature of their domestic market and the rapid pace of China’s internationalisation together with competitive disadvantage at home in terms of technologies and capabilities, are pushing Chinese firms to adopt a unique approach, different from the well-researched trajectory followed by Western MNCs. We put forward an integrative perspective on the strategic, organisational and managerial requirements to engage in globally integrated innovation and analyse Chinese MNCs against this, highlighting the hurdles Chinese firms face in transforming their foreign acquisitions into global innovation networks and the inherent advantages they have over their developed economy MNC competitors in integrating these networks. Given the importance of China, due to its size and the rapid growth of its MNCs, as a global competitor, we outline an agenda for future research relating to global innovation in Chinese firms.