Overseas Expansion and Technological Capabilities: The Case of Chinese Electronics Firms

Abstract

We analyze the formation of technological capabilities of major Chinese home appliance and consumer electronics manufacturers in comparison to the telecommunication equipment manufacturers and hardware start-ups in the electronics industry. To achieve this, we focus on the external business environment of major home appliance and consumer electronics manufacturers, including the technological gaps between foreign and Chinese firms in the same industry, the possibility of cross-border merger and acquisition (M&A) transactions, and the barriers to starting a business and developing new products. Results suggest that there are a variety of ways to increase the technological capabilities of firms in emerging countries and that there may be an optimal way of doing it, depending on the business environment.