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Catch-up Strategy of an Emerging Firm in an Emerging Country: Analyzing the Case of Huawei vs. Ericsson with Patent Data

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  • Joo, SH
  • Oh, C
  • Lee, Keun

Abstract

The telecommunication system industry has long been dominated by the Swedish giant, Ericsson. Huawei, a newly emerged firm from China, entered the industry, grew rapidly, and finally overtook Ericsson in terms of sales in 2012. Given the rarity of this phenomenon, this study seeks to explain how this became possible. We first verified that Huawei’s market share catch-up is rather owing to its technological capabilities than its cost advantages. Then, our analysis of the European patents shows that Huawei grew rapidly by developing technologies that are different from those of Ericsson, and that the former relies more on recent and scientific knowledge in its innovation strategies. This study suggests that creating one’s own technological path rather than following the path of the incumbents could be a viable strategy for successful technological catch-up.

Suggested Citation

  • Joo, SH & Oh, C & Lee, Keun, 2016. "Catch-up Strategy of an Emerging Firm in an Emerging Country: Analyzing the Case of Huawei vs. Ericsson with Patent Data," MPRA Paper 109958, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:109958
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    Cited by:

    1. Wei Yang & Yurong Zhang, 2025. "Standardization catch-up strategy of latecomer enterprises: a longitudinal case of Huawei," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-16, December.
    2. Ju, Xiaosheng & Jiang, Shengjun & Zhao, Qifeng, 2023. "Innovation effects of academic executives: Evidence from China," Research Policy, Elsevier, vol. 52(3).
    3. Rikap, Cecilia, 2022. "Becoming an intellectual monopoly by relying on the national innovation system: the State Grid Corporation of China's experience," Research Policy, Elsevier, vol. 51(4).
    4. Kerstin J. Schaefer & Stefan Hennemann & Ingo Liefner, 2025. "Give us ideas! Creating innovativeness through strategic direction of reverse technology transfers," The Journal of Technology Transfer, Springer, vol. 50(1), pages 138-168, February.
    5. Yuanyang Teng & Yicun Li & Xiaobo Wu, 2024. "Exploring the mechanism of path-creating strategy for latecomers: a combined approach of econometrics and causal machine learning," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-18, December.
    6. Godinho, Manuel Mira & Simões, Vítor Corado, 2023. "The Tech Cold War: What can we learn from the most dynamic patent classes?," International Business Review, Elsevier, vol. 32(6).
    7. Lee, Keun, 2019. "Economics of Technological Leapfrogging," MPRA Paper 111034, University Library of Munich, Germany.
    8. Kim, Dong-hyu, 2022. "Effects of catch-up and incumbent firms’ SEP strategic manoeuvres," Research Policy, Elsevier, vol. 51(5).

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    More about this item

    Keywords

    Market shares; technologies; catch-up; Huawei; Ericsson; patents; a latecomer.;
    All these keywords.

    JEL classification:

    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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