Catching-Up by Chinese Multinational Firms Using Network Strategies

Catching-up is a concept that originally developed in the field of economics. Its central idea is the technological and economic convergence between leading and following countries (Abramovitz, 1986). Freeman (2002) has argued that technology and innovation are central to the catching-up process. When latecomer firms acquire enough time and sufficient productive capability as well as other resources, especially the human capital necessary for new technologies, catching-up can be achieved by leveraging a ‘window of opportunities’ (Perez and Soete, 1988). National catching-up has been studied from two perspectives. The first perspective is based on the growth model of Romer (1990), the theory of national competitive advantage (Porter, 1990) and the notion of national innovation systems (Nelson, 1993). It seeks the factors behind the catching-up, including the development of innovation- enhancing policies and infrastructure as well as increasing financial and human-capital investment. The second perspective uses empirical studies to explain the catching-up factors. For instance, Japan’s catching-up is explained by government regulations, shop-floor innovation and social institutions such as life-long employment and keiretu system (Freeman, 1988). South Korea’s success is a result of the learning path from imitation to innovation, the technological regime that provides a catching-up ladder and the leapfrogging catching-up patterns (Lee and Lim, 2001).