IDEAS home Printed from https://ideas.repec.org/a/taf/indinn/v22y2015i5p423-442.html
   My bibliography  Save this article

An Exploratory Study on the Transition from OEM to OBM: Case Studies of SMEs in Korea

Author

Listed:
  • Keun Lee
  • Jaeyong Song
  • Jooyoung Kwak

Abstract

This study investigates how the transformation of latecomer small- and medium-sized enterprises (SMEs) in emerging economies from dependent or subcontracting original equipment manufacturing (OEM) firms into independent or original brand manufacturing (OBM) firms is possible to achieve a significant catch-up in their share of regional or global markets. Given that SMEs are rarely able to make such a transition, we elaborate this dynamic process by performing case studies on eight Korean SMEs. These SMEs created their own paths instead of following their forerunners. These paths are neither entirely new nor take the form of leapfrogging, but are characterized by new combinations of existing paths. We identify several risk factors, such as counterattacks and intellectual property lawsuits, that latecomer SMEs face from incumbent SMEs. In addition, we emphasize the importance of cultivating firm-specific knowledge by engaging in a continuing process of trial and error type in-house experiments.

Suggested Citation

  • Keun Lee & Jaeyong Song & Jooyoung Kwak, 2015. "An Exploratory Study on the Transition from OEM to OBM: Case Studies of SMEs in Korea," Industry and Innovation, Taylor & Francis Journals, vol. 22(5), pages 423-442, July.
    • Handle: RePEc:taf:indinn:v:22:y:2015:i:5:p:423-442
    DOI: 10.1080/13662716.2015.1064257
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13662716.2015.1064257
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13662716.2015.1064257?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Luiza Bazan & Lizbeth Navas-Alemán, 2004. "The underground revolution in the Sinos Valley: a comparison of upgrading in global and national value chains," Chapters, in: Hubert Schmitz (ed.), Local Enterprises in the Global Economy, chapter 5, Edward Elgar Publishing.
    2. Henny Romijn, 1999. "Acquisition of Technological Capability in Small Firms in Developing Countries," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-38980-9, December.
    3. Giovanni Dosi & Christopher Freeman & Richard Nelson & Gerarld Silverberg & Luc Soete (ed.), 1988. "Technical Change and Economic Theory," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1988, November.
    4. Alice H. Amsden & Wan-wen Chu, 2003. "Beyond Late Development: Taiwan's Upgrading Policies," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011980, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Keun Lee & Marina Szapiro & Zhuqing Mao, 2018. "From Global Value Chains (GVC) to Innovation Systems for Local Value Chains and Knowledge Creation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 424-441, July.
    2. Zhou, Qingna & Gao, Ping & Chimhowu, Admos, 2019. "ICTs in the transformation of rural enterprises in China: A multi-layer perspective," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 12-23.
    3. Xing, Yuqing & Huang, Shaopeng, 2021. "Value captured by China in the smartphone GVC– A tale of three smartphone handsets," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 256-266.
    4. Wang Hao, 2022. "National identities and cross-strait relations: challenges to Taiwan’s economic development," ZFW – Advances in Economic Geography, De Gruyter, vol. 66(4), pages 228-240, November.
    5. Tien Son Nguyen & Jen-Ming Chen & Shih-Hsien Tseng & Li-Fen Lin, 2023. "Key Factors for a Successful OBM Transformation with DEMATEL–ANP," Mathematics, MDPI, vol. 11(11), pages 1-18, May.
    6. Jun Jin & Zhengyi Zhang & Liying Wang, 2019. "From the Host to the Home Country, the International Upgradation of EMNEs in Sustainability Industries—The Case of a Chinese PV Company," Sustainability, MDPI, vol. 11(19), pages 1-19, September.
    7. Keun Lee & Raeyoon Kang & Donghyun Park, 2022. "How Industrial Design Matters for Firm Growth at Different Stages of Development: Evidence from Korea, 1970s to 2010s," Asian Economic Journal, East Asian Economic Association, vol. 36(2), pages 101-126, June.
    8. Ahmadvand, Emad & Salami, Seyed Reza & Soofi, Jahanyar Bamdad & Tabatabaeian, Seyed Habibollah, 2018. "Catch-up process in nanotechnology start-ups: The case of an Iranian electrospinning firm," Technology in Society, Elsevier, vol. 55(C), pages 1-8.
    9. Dwivedi, Abhishek & Pawsey, Nicholas, 2023. "Examining the drivers of marketing innovation in SMEs," Journal of Business Research, Elsevier, vol. 155(PB).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abdul Rauf & Ying Ma & Abdul Jalil, 2019. "Revisiting the Innovation-export Nexus using Industry-level Data: Evidence from China's Large- and Medium-sized Industrial Enterprises," International Journal of Economics and Financial Issues, Econjournals, vol. 9(3), pages 73-80.
    2. Prud’homme, Dan, 2016. "Dynamics of China’s provincial-level specialization in strategic emerging industries," Research Policy, Elsevier, vol. 45(8), pages 1586-1603.
    3. Gao, Xudong & Liu, Jianxin, 2012. "Catching up through the development of technology standard: The case of TD-SCDMA in China," Telecommunications Policy, Elsevier, vol. 36(7), pages 531-545.
    4. Franco Malerba & Keun Lee, 2021. "An evolutionary perspective on economic catch-up by latecomers [Catching-up, forging ahead, and falling behind]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 30(4), pages 986-1010.
    5. Keun Lee, 2013. "Capability Failure and Industrial Policy to Move beyond the Middle-Income Trap: From Trade-based to Technology-based Specialization," International Economic Association Series, in: Joseph E. Stiglitz & Justin Yifu Lin (ed.), The Industrial Policy Revolution I, chapter 4, pages 244-272, Palgrave Macmillan.
    6. Gao, Xudong & Liu, Jianxin, 2012. "Reprint of: Catching up through the development of technology standard: The case of TD-SCDMA in China," Telecommunications Policy, Elsevier, vol. 36(10), pages 817-831.
    7. Marjolein Canie¨ls & Henny Romijn, 2003. "Dynamic Clusters in Developing Countries: Collective Efficiency and Beyond," Oxford Development Studies, Taylor & Francis Journals, vol. 31(3), pages 275-292.
    8. Uwe Cantner & Martin Kalthaus & Matthias Menter & Pierre Mohnen, 2023. "Global knowledge flows: characteristics, determinants, and impacts," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(5), pages 1063-1076.
    9. Heijs, Joost, 2003. "Freerider behaviour and the public finance of R&D activities in enterprises: the case of the Spanish low interest credits for R&D," Research Policy, Elsevier, vol. 32(3), pages 445-461, March.
    10. Rajah Rasiah & Xinxin Kong & Yeo Lin, 2010. "Innovation and learning in the integrated circuits industry in Taiwan and China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 15(3), pages 225-246.
    11. Jyh-Wen Shiu & Chan-Yuan Wong & Mei-Chih Hu, 2014. "The dynamic effect of knowledge capitals in the public research institute: insights from patenting analysis of ITRI (Taiwan) and ETRI (Korea)," Scientometrics, Springer;Akadémiai Kiadó, vol. 98(3), pages 2051-2068, March.
    12. Dirk Boehe & Luciano Barin Cruz, 2010. "Corporate Social Responsibility, Product Differentiation Strategy and Export Performance," Journal of Business Ethics, Springer, vol. 91(2), pages 325-346, February.
    13. Colin Wessendorf & Alexander Kopka & Dirk Fornahl, 2021. "The impact of the six European Key Enabling Technologies (KETs) on regional knowledge creation," Papers in Evolutionary Economic Geography (PEEG) 2127, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2021.
    14. Michael J. Radzicki, 2003. "Mr. Hamilton, Mr. Forrester, and a Foundation for Evolutionary Economics," Journal of Economic Issues, Taylor & Francis Journals, vol. 37(1), pages 133-173, March.
    15. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    16. José Monteiro-Barata, 2005. "Innovation in the Portuguese Manufacturing Industry: Analysis of a Longitudinal Company Panel," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(3), pages 301-314, August.
    17. Caroline Lanciano & Marc Maurice & Hiroatsu Nohara & Jean-Jacques Silvestre, 1992. "Societal Analysis of Innovation: Genesis and Development [Analyse Sociétale de l'Innovation : Genèse et Développement]," Working Papers halshs-03388659, HAL.
    18. Alessandro Muscio, 2007. "THE IMPACT OF ABSORPTIVE CAPACITY ON SMEs' COLLABORATION," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(8), pages 653-668.
    19. Jan Ende & Wilfred Dolfsma, 2004. "Technology-push, demand-pull and the shaping of technological paradigms - Patterns in the development of computing technology," Journal of Evolutionary Economics, Springer, vol. 15(1), pages 83-99, January.
    20. Mark Knell & Simone Vannuccini, 2022. "Tools and concepts for understanding disruptive technological change after Schumpeter," Jena Economics Research Papers 2022-005, Friedrich-Schiller-University Jena.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:indinn:v:22:y:2015:i:5:p:423-442. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIAI20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.