The Technology Gap and the Growth of the Firm: A Case Study of China's Mobile-phone Handset Industry

We have examined the way in which local Chinese firms confronted with a technology gap have achieved growth, using the Chinese handset industry as a case study. Chinese local firms have lacked technology, and have therefore turned to outside firms for development, design, and manufacturing, while they themselves have focused on sales and marketing, using their advantage of familiarity with the Chinese market. Consequently, by establishing a growth condition in which their selection of boundaries counterbalances the technology gap they have been able to expand their market share in comparison with foreign firms.Technology gap, Boundaries of the firm, Mobile-phone handset industry, China, Telephone

Diversified boundaries of the firm

We analyze diversification of boundaries of local firms in developing countries under the economic globalization. The globalization has an aspect of homogenization of the world economy, but also has another aspect of diversification through international economic activities. Focusing on boundary-level of the firm, this article shows that the diversification from a comparison with boundaries of foreign firms in developed countries is brought by a disadvantage of technology deficit and a home advantage as local firms

Competition between firms in developing and developed countries

We analyze competition in emerging markets between firms in developing and developed countries from the viewpoint of the boundaries of the firm. Although indigenous firms generally face a disadvantage in technology compared with foreign firms, they have an advantage in marketing as local firms. Moreover, they have opportunities to leave weaker fields to independent specialized firms and use lower wages. On the other hand, foreign firms also have their own advantages and disadvantages for growth. Therefore, entry conditions for indigenous firms can vary greatly depending on the situation. We classify these conditions into eight cases by developing a model and showing each boundary choice for indigenous firms

Outward FDI from developing countries : a case of Chinese firms in South Africa

Outward foreign direct investment (FDI) from developing countries is increasing. In the research on FDI, it has been considered that only competitive and productive firms can invest in foreign countries. However, since the differences in competitiveness and productivity between multinational enterprises (MNEs) from developed and developing countries have not been explicitly investigated, we cannot say whether MNEs from developing countries can or cannot survive in competition with MNEs from developed countries as well as against competitive and productive indigenous firms in host countries. To examine the activities of MNEs from developing countries, this study investigates Chinese firms in South Africa. It reveals that in order to compensate for the weak brand recognition of Chinese products and to expand sales, Chinese firms have mainly been making products that are sold under the brand names of indigenous South African firms. Chinese firms have expanded their business in South Africa relying on the business resources of indigenous firms in the host country. This indicates that business with indigenous firms is significant for MNEs from developing countries in boosting competitiveness

Overseas expansion and technological capabilities : the case of Chinese electronics firms

We analyze the formation of technological capabilities of major Chinese home appliance and consumer electronics manufacturers in comparison with telecommunication equipment manufacturers and hardware startups in the electronics industry. To achieve this, we focus on the external business environment of major home appliance and consumer electronics manufacturers, including the technological gaps between foreign and Chinese firms in the same industry, the possibility of cross-border mergers and acquisitions (M&A) transactions, and the barriers to starting a business and to developing new products. Results suggest that there are a variety of ways to increase the technological capabilities of firms in emerging countries and that there may be an optimal way for it depending on a business environment

The Technology Gap and the Growth of the Firm: A Case Study of China\u27s Mobile-phone Handset Industry

We have examined the way in which local Chinese firms confronted with atechnology gap have achieved growth, using the Chinese handset industry as acase study. Chinese local firms have lacked technology, and have therefore turnedto outside firms for development, design, and manufacturing, while theythemselves have focused on sales and marketing, using their advantage offamiliarity with the Chinese market. Consequently, by establishing a growthcondition in which their selection of boundaries counterbalances the technologygap they have been able to expand their market share in comparison with foreignfirms

Growth of the Firm and Economic Backwardness: A Case Study and Analysis of China\u27s Mobile Handset Industry

Economic backwardness often influences the growth of firms in developing countries. In this paper, we investigate the growth conditions and paths available for latecomers competing with first movers. Employing the concepts of boundaries of the firm and the disadvantage of backwardness, we present a case study of China\u27s mobile handset industry and proceed to develop a simple model. We find that although significant disadvantage does not allow latecomers to grow, there are possibilities for changing the conditions of growth if latecomers can utilize outside resources and/or indigenous advantages

The technological distance between Chinese firms: deepening and diversifying technologies

This study measures the technological distance between firms within and across industries as a case study of Chinese firms to investigate firms’ technology accumulation patterns. Specifically, cosine similarity is used to compare the t echnology positions generated by the patent applications of Chinese firms. The analysis shows that as the number of patent applications increases, firms tend to deepen the technological characteristics of each industry and firm while broadening t he variety of technological fields. As a result, although the quantity and quality of t echnologies are critical, understanding the characteristics of technologies as a t echnological structure or system that differs from one firm to another is also crucial

Does the product characteristic distance get closer or not? Differentiation and imitation in a hotelling model

Is the distance between the product characteristics of firms in an industry getting closer or not in competition? Although many studies have been conducted on differentiation to get farther and imitation to get closer, neither has been analyzed within t he same framework. Therefore, this study introduces the concept of imitation into a Hoteling model on differentiation. We show that although firms are more profitable if they maintain differentiation, they face a prisoner’s dilemma in imitation and therefore t ry to imitate from each other as much as possible, which decreases their profits. As a result, competition brings the distance closer by imitation and promotes the standardization of product characteristics in that industry