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The influence of industrial policy and national systems of innovation on emerging economy suppliers’ learning capability

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  • Zaheer Khan
  • Yong Kyu Lew
  • Pervaiz Akhtar

Abstract

This paper links the industrial policy and national systems of innovation literature to the investigation of learning capabilities of suppliers in the context of the automotive parts industry of Pakistan. Drawing data from 50 Pakistani autoparts suppliers, the findings suggest that industrial policy has been helpful in creating a local parts supply base and facilitating the entry of Japanese assemblers in the market. However, the implementation of the policy has been weak, and it is an arduous journey for the local suppliers to develop ambidextrous (exploratory and exploitative) learning capabilities. The findings also indicate that where local training and support from R&D institutions are weak, networking alone with foreign multinationals is not sufficient on its own to develop exploratory learning capabilities of local suppliers. This paper shows the importance of creating national--provincial institutions offering learning and skills development aimed towards innovation.

Suggested Citation

  • Zaheer Khan & Yong Kyu Lew & Pervaiz Akhtar, 2016. "The influence of industrial policy and national systems of innovation on emerging economy suppliers’ learning capability," Industry and Innovation, Taylor & Francis Journals, vol. 23(6), pages 512-530, August.
    • Handle: RePEc:taf:indinn:v:23:y:2016:i:6:p:512-530
    DOI: 10.1080/13662716.2016.1189811
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    References listed on IDEAS

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    1. Theodore H. Moran & Edward M. Graham & Magnus Blomstrom, 2005. "Does Foreign Direct Investment Promote Development?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3810, April.
    2. Takatoshi Ito & Anne O. Krueger, 1995. "Growth Theories in Light of the East Asian Experience," NBER Books, National Bureau of Economic Research, Inc, number ito_95-2.
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    Cited by:

    1. Shufeng Simon Xiao & Yong Kyu Lew & Byung Il Park, 2020. "International Network Searching, Learning, and Explorative Capability: Small and Medium-sized Enterprises from China," Management International Review, Springer, vol. 60(4), pages 597-621, August.
    2. Zhu, Ying & Sardana, Deepak & Tang, Ryan, 2022. "Heterogeneity in OFDI by EMNEs: Drivers and trends of Chinese and Indian firms," International Business Review, Elsevier, vol. 31(6).
    3. Khan, Zaheer & Rao-Nicholson, Rekha & Tarba, Shlomo Y., 2018. "Global networks as a mode of balance for exploratory innovations in a late liberalizing economy," Journal of World Business, Elsevier, vol. 53(3), pages 392-402.
    4. Cheah, Sarah Lai-Yin & Ho, Yuen-Ping, 2020. "Effective industrial policy implementation for open innovation: The role of government resources and capabilities," Technological Forecasting and Social Change, Elsevier, vol. 151(C).

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