Domestic Firm Innovation and Networking with Foreign Firms in China's ICT Industry

PurposeEither buying or making is predicted by the existing literature for firms to reduce dependence. However, firms in the rapid globalization are found to adopt a pattern of buying and making. Specially, they critically rely on foreign firms for needed materials and goods, and invest in innovation against the uncertainty of potential supply disruptions simultaneously. Therefore, this paper seeks to investigate how the depth and width of supplier globalization shape firm innovation together. Moreover, the moderating effects of institutional distance and market competition are also examined in the paper.Design/methodology/approachGrounded on the resource dependence theory, this paper develops a theoretical framework and tests the proposed hypotheses by Poisson model using secondary data from 502 Chinese listed firms with foreign suppliers.FindingsThe depth of supplier globalization has a positive impact on firm innovation, while the width of supplier globalization weakens firm innovation. The depth and width of supplier globalization further interact negatively to influence firm innovation. Moreover, this relationship is enhanced when firms establish relationships with foreign firms with greater institutional distance and is weakened when firms face fiercer product competition.Originality/valueThe authors contribute to the literature by evidencing that the existence of foreign suppliers results in firms' enhancement of innovation to secure their operations and showing that diversifying the country origins of foreign suppliers is an effective means to reduce firms' uncertainty about supply disruption. We also advance the understanding regarding the contextual factors in which firms are more likely or less likely to manage the uncertainty about supplier globalization.

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Cournot-Bertrand competition: a revisit of strategic trade policy in the third-market model

Journal of Economic Studies ◽

10.1108/jes-02-2015-0028 ◽

2016 ◽

Vol 43 (3) ◽

pp. 475-487 ◽

Cited By ~ 1

Author(s):

Shoou-Rong Tsai ◽

Pan-Long Tsai ◽

Yungho Weng

Keyword(s):

Optimal Policy ◽

Home Country ◽

Export Subsidy ◽

Stackelberg Equilibrium ◽

Market Model ◽

Foreign Firms ◽

Domestic Firm ◽

Model Framework ◽

Content Type ◽

Strategic Variable

Purpose – The purpose of this paper is to discuss the optimal policy settings of the home government for any combination of strategic variables adopted by home and foreign firms under Brander and Spencer’s third-market model framework. Design/methodology/approach – This paper follows all the assumptions of Brander and Spencer with only two modifications: firms produce differentiated products, and firms choose different strategic variables. A two-stage game is set and the subgame-perfect Nash equilibrium is deduced following backward induction. Findings – The authors arrive at a general, simple rule to determine the optimal policy of the home government for any combination of strategic variables: regardless of the strategic variable of the domestic firm, the optimal policy of the home country is an export subsidy (tax) as long as the foreign firm’s strategic variable is output (price). The optimal subsidy or tax of the home country is shown to move the equilibrium to the Stackelberg equilibrium where the domestic firm behaves as the leader while the foreign firm behaves as a follower under free trade. With appropriate interpretations and a suitable caveat, the above results still hold in the case with multiple foreign firms which may choose different strategic variables. Originality/value – This paper fills the gap in the literature, and provides some more general results not easily detected in the original model of Brander and Spencer or Eaton and Grossman.

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Local Innovativeness and Knowledge Spillovers of Indigenous Firms on Foreign Firms: Evidence from China's ICT Industry

The Professional Geographer ◽

10.1080/00330124.2016.1178150 ◽

2016 ◽

Vol 69 (1) ◽

pp. 117-125 ◽

Cited By ~ 3

Author(s):

Cassandra C. Wang ◽

Yiqiong Guo

Keyword(s):

Knowledge Spillovers ◽

Foreign Firms ◽

Ict Industry

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Fusing East and West Leads a Way to Global Competitiveness in Emerging Economy: Lessons from China’s Leap in Wind Energy Development

Journal of Technology Management for Growing Economies ◽

10.15415/jtmge.2014.52006 ◽

2014 ◽

Vol 5 (2) ◽

pp. 7-32

Author(s):

Narasimalu Srikanth ◽

Chihiro Watanabe

Keyword(s):

Wind Energy ◽

Energy Development ◽

Lessons Learned ◽

Foreign Firms ◽

Domestic Firm ◽

Global Competitiveness ◽

Technology Acquisition ◽

Development Trajectory ◽

Knowledge Identification ◽

Wind Energy Development

China has demonstrated world leading wind energy development in the last five years which can be attributed to the fusion between its design and manufacturing strength in indigenous wind turbine industry and newly emerging wind energy industry in absorption of global best practices. An empirical analysis of China’s wind energy development trajectory over the last decade focusing on the technology sourcing from foreign firms in support of domestic players for accelerating functionality development through enhanced knowledge identification, absorption, assimilation and acclimatization was attempted. Important lessons learned include (i) importance of supply chain in the technology diffusion, (ii) effective technology acquisition and assimilation through early domestic firm engagement, (iii) effect of relevant domestic firms involvement in technology transfer partnership to induce inter-industry spillovers, and (iv) a framework for an emerging nation to develop new functionalities. Similarity and disparity with similar success of fusion in solar industry (JTMGE 3, 2) were also identified.

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The Impact of FDI on Domestic Firm Innovation: Evidence from Foreign Investment Deregulation in China

10.1596/1813-9450-9672 ◽

2021 ◽

Author(s):

Yan Liu ◽

Xuan Wang

Keyword(s):

Foreign Investment ◽

Domestic Firm ◽

Firm Innovation ◽

The Impact

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The Geography of NGO Activism against Multinational Corporations

The World Bank Economic Review ◽

10.1093/wber/lhy007 ◽

2018 ◽

Vol 34 (1) ◽

pp. 143-163 ◽

Cited By ~ 2

Author(s):

Sophie Hatte ◽

Pamina Koenig

Keyword(s):

Multinational Corporations ◽

Multinational Firms ◽

Foreign Firms ◽

Value Chains ◽

Domestic Firm ◽

Common Language ◽

Governmental Organizations ◽

Non Governmental Organizations ◽

Multinational Production

Abstract To what extent do Non-Governmental Organizations (NGOs) monitor global value chains? While NGOs regularly denounce the behavior of multinational corporations throughout the world, their motivations for choosing campaign targets remain largely unknown. Using a new dataset on activists’ campaigns toward multinational firms, we estimate a triadic gravity equation for campaigns, involving the NGO, firm, and action countries. Our results point to a strong proximity bias in NGO activity: Distance, national borders, and lack of a common language all contribute to impede the intensity of campaigns. We estimate the distance elasticity of campaigns to be −0.2 and further document that NGOs strongly bias their actions toward home firms or foreign firms with home actions. A domestic firm is 3.45 times more likely to be attacked than a foreign one. Foreign firms headquartered in common language countries draw 1.63 times more campaigns. Overall, campaigns seem to be designed so as to include at least one element of proximity drawing the attention of consumers. This pattern questions the role of NGOs in the monitoring of multinational production operated in remote, unfamiliar locations.

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