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Toward a construct of dynamic capabilities malfunction: Insights from failed Chinese entrepreneurs

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  • Zhang, Hongxu
  • Amankwah-Amoah, Joseph
  • Beaverstock, Jonathan

Abstract

This paper explores the processes and mechanisms of business failure in emerging economies. Drawing from the experiences of 50 failed entrepreneurs in China, we developed the concept of dynamic capabilities malfunction (DCM) to explain how business failure can stem from maladaptive, misallocation of attention and internal deficiencies. Our phase model explicates how exogenous and endogenous factors can interplay to contribute to DCM that ultimately led to the business closures. Another unexpected finding was that the failure occurred during the process of business transition. The implications for business failure research in emerging markets are discussed.

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  • Zhang, Hongxu & Amankwah-Amoah, Joseph & Beaverstock, Jonathan, 2019. "Toward a construct of dynamic capabilities malfunction: Insights from failed Chinese entrepreneurs," Journal of Business Research, Elsevier, vol. 98(C), pages 415-429.
    • Handle: RePEc:eee:jbrese:v:98:y:2019:i:c:p:415-429
    DOI: 10.1016/j.jbusres.2018.06.020
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    2. Amankwah-Amoah, Joseph & Hinson, Robert E. & Honyenuga, Ben & Lu, Yingfa, 2019. "Accounting for the transitions after entrepreneurial business failure: An emerging market perspective," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 148-158.
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    5. Klofsten, Magnus & Urbano, David & Heaton, Sohvi, 2021. "Managing intrapreneurial capabilities: An overview," Technovation, Elsevier, vol. 99(C).
    6. Amankwah-Amoah, Joseph, 2020. "Note: Mayday, Mayday, Mayday! Responding to environmental shocks: Insights on global airlines’ responses to COVID-19," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    7. Amankwah-Amoah, Joseph & Khan, Zaheer & Wood, Geoffrey, 2021. "COVID-19 and business failures: The paradoxes of experience, scale, and scope for theory and practice," European Management Journal, Elsevier, vol. 39(2), pages 179-184.
    8. Ganga Bhavani & Reena Agrawal & Suhan Mendon & Cristi Spulbar & Ramona Birau, 2021. "An Empirical Investigation into Alarming Signals Ignored by the U.S. Multi-Brand Retailer J. Crew Incorporation during COVID-19 Pandemic," JRFM, MDPI, vol. 14(11), pages 1-21, November.
    9. Cheng, Ruiqi & Yuan, Peng & Jiang, Gongxiong, 2023. "Growth, agglomeration externalities, and survival: Evidence from Chinese manufacturing start-ups," Journal of Business Research, Elsevier, vol. 154(C).
    10. Giunipero, Larry C. & Denslow, Diane & Rynarzewska, Ania Izabela, 2022. "Small business survival and COVID-19 - An exploratory analysis of carriers," Research in Transportation Economics, Elsevier, vol. 93(C).

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