Internationalization and indigenous technological efforts of emerging economy firms: The effect of multiple knowledge sources

Zhenzhen Xie, Jiatao Li

Research output: Journal PublicationArticlepeer-review

18 Citations (Scopus)

Abstract

Getting engaged in competitive international markets motivates exporting firms to enhance their technological competitiveness and invest in research and development (R&D). While in-house R&D investment is important for getting advanced technologies, the technologies needed by exporters located in emerging economies (EEs) typically readily exist overseas. Drawing on organizational learning literature, we argue that the R&D intensity stimulated by exporting may be reduced when 1) EE exporters are better prepared and motivated to absorb foreign knowledge, 2) foreign sources of knowledge are more available, and/or 3) local technology supply is poor. An analysis on 5592 automobile parts and component manufacturers in China during 2005-2007 supports these arguments. To compete in markets abroad, Chinese firms' R&D intensity increases with export intensity when their export intensity is low. As the export intensity exceeds a certain threshold, their R&D intensity starts to decrease as intensive exporters are better prepared and motivated to acquire knowledge from foreign sources. When substitutive foreign knowledge sources such as foreign parents and FDI spillovers in the local industry is available, firms' R&D intensity stimulated by exporting can be further reduced. Better local technology supply can increase the R&D intensity stimulated by exporting.

Original languageEnglish
Pages (from-to)247-259
Number of pages13
JournalJournal of International Management
Volume19
Issue number3
DOIs
Publication statusPublished - Sep 2013
Externally publishedYes

Keywords

  • Emerging economies
  • Export
  • Foreign direct investment
  • Indigenous technological efforts

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Strategy and Management

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