IDEAS home Printed from https://ideas.repec.org/a/sae/envira/v43y2011i4p786-809.html
   My bibliography  Save this article

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

Author

Listed:
  • Yifei Sun

    (Department of Geography, California State University, Northridge, 18111 Nordhoff Street, Northridge, CA 91330-8249, USA)

  • Debin Du

    (Institute of China Innovation (ICI), East China Normal University, Shanghai, China)

Abstract

This study systematically analyzes the impacts of supplier–client and technological linkages with foreign firms on domestic firm technological innovation, based on a unique dataset that was collected through a survey of over 600 firms in China's information and communication technology industry. The results revealed that Chinese firms were engaged in extensive supplier–client relationships with foreign firms, although their technological collaborations with foreign firms were very limited. It was found that firm innovation benefited significantly from technological relationships with foreign firms. However, the results also suggest that, although export/import did contribute to domestic firm innovation, supplier–client relationships with foreign-invested enterprises in China did not show positive effects on domestic firm innovation. The analyses further suggest that such market transactions between domestic and foreign firms helped building technological linkages between domestic firms and foreign firms. These results clearly demonstrate the value of networking in enhancing firm innovation in developing countries.

Suggested Citation

  • Yifei Sun & Debin Du, 2011. "Domestic Firm Innovation and Networking with Foreign Firms in China's ICT Industry," Environment and Planning A, , vol. 43(4), pages 786-809, April.
    • Handle: RePEc:sae:envira:v:43:y:2011:i:4:p:786-809
    DOI: 10.1068/a43156
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1068/a43156
    Download Restriction: no
    File URL: https://libkey.io/10.1068/a43156?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
    ---><---

    References listed on IDEAS

    as
    1. Ranjay Gulati, 1999. "Network location and learning: the influence of network resources and firm capabilities on alliance formation," Strategic Management Journal, Wiley Blackwell, vol. 20(5), pages 397-420, May.
    2. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    3. Lowe, Nichola & Kenney, Martin, 1999. "Foreign Investment and the Global Geography of Production: Why the Mexican Consumer Electronics Industry Failed," World Development, Elsevier, vol. 27(8), pages 1427-1443, August.
    4. Joel A. C. Baum & Tony Calabrese & Brian S. Silverman, 2000. "Don't go it alone: alliance network composition and startups' performance in Canadian biotechnology," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 267-294, March.
    5. Timothy J. Sturgeon, 2002. "Modular production networks: a new American model of industrial organization," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 451-496, June.
    6. Lim, Linda Y. C. & Fong, Pang Eng, 1982. "Vertical linkages and multinational enterprises in developing countries," World Development, Elsevier, vol. 10(7), pages 585-595, July.
    7. Altenburg, Tilman & Schmitz, Hubert & Stamm, Andreas, 2008. "Breakthrough China's and India's Transition from Production to Innovation," World Development, Elsevier, vol. 36(2), pages 325-344, February.
    8. Javier Revilla Diez & Matthias Kiese, 2006. "Scaling Innovation in South East Asia: Empirical Evidence from Singapore, Penang (Malaysia) and Bangkok," Regional Studies, Taylor & Francis Journals, vol. 40(9), pages 1005-1023.
    9. John R. Baldwin & Wulong Gu, 2004. "Trade Liberalization: Export-market Participation, Productivity Growth, and Innovation," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(3), pages 372-392, Autumn.
    10. Gautam Ahuja, 2000. "The duality of collaboration: inducements and opportunities in the formation of interfirm linkages," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 317-343, March.
    11. Ivarsson, Inge & Alvstam, Claes Goran, 2005. "Technology transfer from TNCs to local suppliers in developing countries: A study of AB Volvo's truck and bus plants in Brazil, China, India, and Mexico," World Development, Elsevier, vol. 33(8), pages 1325-1344, August.
    12. David Angel, 2002. "Inter-firm Collaboration and Technology Development Partnerships Within US Manufacturing Industries," Regional Studies, Taylor & Francis Journals, vol. 36(4), pages 333-344.
    13. John R. Baldwin & Wulong Gu, 2004. "Trade Liberalization: Export-market Participation, Productivity Growth, and Innovation," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 372-392, Autumn.
    14. Javier Revilla Diez & Martin Berger, 2005. "The Role of Multinational Corporations in Metropolitan Innovation Systems: Empirical Evidence from Europe and Southeast Asia," Environment and Planning A, , vol. 37(10), pages 1813-1835, October.
    15. Elisa Giuliani, 2007. "The selective nature of knowledge networks in clusters: evidence from the wine industry," Journal of Economic Geography, Oxford University Press, vol. 7(2), pages 139-168, March.
    16. Henry Wai-chung Yeung, 2009. "Regional Development and the Competitive Dynamics of Global Production Networks: An East Asian Perspective," Regional Studies, Taylor & Francis Journals, vol. 43(3), pages 325-351.
    17. M. S. Gertler & Y. M. Levitte, 2005. "Local Nodes in Global Networks: The Geography of Knowledge Flows in Biotechnology Innovation," Industry and Innovation, Taylor & Francis Journals, vol. 12(4), pages 487-507.
    18. Holger Görg & Eric Strobl, 2016. "Multinational Companies And Productivity Spillovers: A Meta-Analysis," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 8, pages 145-161, World Scientific Publishing Co. Pte. Ltd..
    19. Yu Zhou & Yifei Sun & Y. H. Dennis Wei & George C. S. Lin, 2011. "De-centering 'spatial fix'--patterns of territorialization and regional technological dynamism of ICT hubs in China," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 119-150, January.
    20. Henry Wai-chung Yeung, 2000. "The Dynamics of the Globalization of Chinese Business Firms," Palgrave Macmillan Books, in: Henry Wai-chung Yeung & Kris Olds (ed.), Globalization of Chinese Business Firms, chapter 4, pages 75-104, Palgrave Macmillan.
    21. Timothy Sturgeon & Johannes Van Biesebroeck & Gary Gereffi, 2008. "Value chains, networks and clusters: reframing the global automotive industry," Journal of Economic Geography, Oxford University Press, vol. 8(3), pages 297-321, May.
    22. Yu Zhou & Tong Xin, 2003. "An Innovative Region in China: Interaction Between Multinational Corporations and Local Firms in a High-Tech Cluster in Beijing," Economic Geography, Taylor & Francis Journals, vol. 79(2), pages 129-152, April.
    23. Huggins, Robert, 2001. "Inter-firm network policies and firm performance: evaluating the impact of initiatives in the United Kingdom," Research Policy, Elsevier, vol. 30(3), pages 443-458, March.
    24. Lall, Sanjaya & Albaladejo, Manuel, 2004. "China's Competitive Performance: A Threat to East Asian Manufactured Exports?," World Development, Elsevier, vol. 32(9), pages 1441-1466, September.
    25. Ana Teresa Tavares & Stephen Young, 2006. "Sourcing patterns of foreign-owned multinational subsidiaries in Europe," Regional Studies, Taylor & Francis Journals, vol. 40(6), pages 583-600.
    26. Hansen, Michael W. & Pedersen, Torben & Petersen, Bent, 2009. "MNC strategies and linkage effects in developing countries," Journal of World Business, Elsevier, vol. 44(2), pages 121-130, April.
    27. Masaaki Kotabe & K. Scott Swan, 1995. "The role of strategic alliances in high‐technology new product development," Strategic Management Journal, Wiley Blackwell, vol. 16(8), pages 621-636.
    28. Jessie P. H. Poon & Edmund R. Thompson, 2003. "Developmental and Quiescent Subsidiaries in the Asia Pacific: Evidence from Hong Kong, Singapore, Shanghai, and Sydney," Economic Geography, Taylor & Francis Journals, vol. 79(2), pages 195-214, April.
    29. Phelps, Nicholas A. & Stillwell, John C.H. & Wanjiru, Roseline, 2009. "Broken Chain? AGOA and Foreign Direct Investment in the Kenyan Clothing Industry," World Development, Elsevier, vol. 37(2), pages 314-325, February.
    30. Seungwha (Andy) Chung & Harbir Singh & Kyungmook Lee, 2000. "Complementarity, status similarity and social capital as drivers of alliance formation," Strategic Management Journal, Wiley Blackwell, vol. 21(1), pages 1-22, January.
    31. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
    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. Yuefang Si & Ingo Liefner, 2014. "Cognitive Distance and Obstacles to Subsidiary Business Success-The Experience of Chinese Companies in Germany," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 105(3), pages 285-300, July.
    2. Robert Huggins & Shougui Luo & Piers Thompson, 2014. "The competitiveness of China's Leading Regions: Benchmarking Their Knowledge-based Economies," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 105(3), pages 241-267, July.
    3. Wang, Cassandra C. & Wu, Aiqi, 2016. "Geographical FDI knowledge spillover and innovation of indigenous firms in China," International Business Review, Elsevier, vol. 25(4), pages 895-906.

    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. Anna Giunta & Domenico Scalera & Francesco Trivieri & Jeffrey B. Nugent & Mariarosaria Agostino, 2011. "Firm Productivity, Organizational Choice and Global Value Chain," Working Papers 2011R09, Orkestra - Basque Institute of Competitiveness.
    2. McWilliam, Sarah E. & Kim, Jung Kwan & Mudambi, Ram & Nielsen, Bo Bernhard, 2020. "Global value chain governance: Intersections with international business," Journal of World Business, Elsevier, vol. 55(4).
    3. Castro, Ignacio & Casanueva, Cristóbal & Galán, José Luis, 2014. "Dynamic evolution of alliance portfolios," European Management Journal, Elsevier, vol. 32(3), pages 423-433.
    4. Park, Gunno & Kim, Marco JinHwan & Kang, Jina, 2015. "Competitive embeddedness: The impact of competitive relations among a firm's current alliance partners on its new alliance formations," International Business Review, Elsevier, vol. 24(2), pages 196-208.
    5. Monica Plechero & Cristina Chaminade, 2016. "The role of regional sectoral specialisation on the geography of innovation networks: a comparison between firms located in regions in developed and emerging economies," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 8(2), pages 148-171.
    6. Jacob, Jojo & Duysters, Geert, 2017. "Alliance network configurations and the co-evolution of firms' technology profiles: An analysis of the biopharmaceutical industry," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 90-102.
    7. Iris Claus & Les Oxley & Peilei Fan, 2014. "Innovation In China," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 725-745, September.
    8. Stephan Duschek, 2004. "Inter-Firm Resources and Sustained Competitive Advantage," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 15(1), pages 53-73.
    9. Petr Pavlínek & Pavla Žížalová, 2016. "Linkages and spillovers in global production networks: firm-level analysis of the Czech automotive industry," Journal of Economic Geography, Oxford University Press, vol. 16(2), pages 331-363.
    10. Sverre Herstad & Øyvind Pålshaugen & Bernd Ebersberger, 2011. "Industrial Innovation Collaboration in a Capital Region Context," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 2(4), pages 507-532, December.
    11. Linqing Liu & Shiye Mei, 2016. "Visualizing the GVC research: a co-occurrence network based bibliometric analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 109(2), pages 953-977, November.
    12. Emanuele Bacchiocchi & Massimo Florio & Anna Giunta, 2012. "Internationalisation and the agglomeration effect in the global value chain: the case of Italian automotive suppliers," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 5(3), pages 267-290.
    13. Wang, Cassandra C. & Wu, Aiqi, 2016. "Geographical FDI knowledge spillover and innovation of indigenous firms in China," International Business Review, Elsevier, vol. 25(4), pages 895-906.
    14. Lema, Rasmus & Quadros, Ruy & Schmitz, Hubert, 2012. "Shifts in Innovation Power to Brazil and India: Insights from the Auto and Software Industries," MPRA Paper 49591, University Library of Munich, Germany.
    15. Emanuele Brancati & Raffaele Brancati & Andrea Maresca, 2017. "Global value chains, innovation and performance: firm-level evidence from the Great Recession," Journal of Economic Geography, Oxford University Press, vol. 17(5), pages 1039-1073.
    16. Dallas, Mark P., 2014. "Manufacturing Paradoxes: Foreign Ownership, Governance, and Value Chains in China’s Light Industries," World Development, Elsevier, vol. 57(C), pages 47-62.
    17. Kim, Jerry W. & Higgins, Monica C., 2007. "Where do alliances come from?: The effects of upper echelons on alliance formation," Research Policy, Elsevier, vol. 36(4), pages 499-514, May.
    18. Cobeña, Mar & Gallego, Ángeles & Casanueva, Cristóbal, 2017. "Heterogeneity, diversity and complementarity in alliance portfolios," European Management Journal, Elsevier, vol. 35(4), pages 464-476.
    19. Gilsing, Victor A. & Cloodt, Myriam & Bertrand–Cloodt, Danielle, 2016. "What makes you more central? Antecedents of changes in betweenness-centrality in technology-based alliance networks," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 209-221.
    20. Olga A. Novoselova, 2022. "What matters for interorganizational connectedness? Locating the drivers of multiplex corporate networks," Strategic Management Journal, Wiley Blackwell, vol. 43(4), pages 872-899, April.

    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:sae:envira:v:43:y:2011:i:4:p:786-809. 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: SAGE Publications (email available below). General contact details of provider: .

    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.