A learning portal model of emerging markets multinationals

Abstract

Research Summary

The purpose of the article is to explain the mechanisms underlying the internationalization springboard strategies of China's emerging multinationals in the automobile industry. Using a unique combination of location bound (country-specific) and non-location bound (firm-specific) advantages, companies in this industry have overcome their latecomer disadvantages by exploring knowledge from mature markets through backward and forward integration of the value chain, and exploiting this knowledge to enhance their competitive position, first at home, then in emerging markets and later in developed countries. We test and refine springboarding theory and propose the learning portal model. The learning portal model can be used as a new theory of emerging markets multinationals beyond China and the automobile industry.

Management Summary

The globalization of Chinese enterprises is upon us. Chinese enterprises have not only successfully internationalized to other emerging markets, but also to advanced economies. To do so, these firms used springboard strategies to leapfrog certain technological development stages and accelerate their catch-up trajectory with incumbent firms from the advanced economies. This article investigates the catch-up strategies of China's leading automotive companies. We find that Chinese enterprises establish learning portals in mature markets to acquire knowledge and assets, which they first exploit in their home market, before seeking to expand their market share in other emerging markets and finally advanced economies.