Internationalization and Technological Catching Up of Emerging Multinationals: A Case Study of China’s Haier Group

In recent years, a number of firms from Asia and Latin America have been internationalizing their businesses to access new markets and to acquire new technology. This follows similar attempts only a few years earlier by leading firms from countries such as Korea and Taiwan. Much research has gone during the last two decades into understanding the success of Korean and Taiwanese firms. In this paper we carry out a case study of the Haier group—one of the most promising global enterprises emerging out of mainland China. We explain the need for recognizing some important differences in the early stages of growth between emerging MNCs today and MNCs from Korea and Taiwan. Unlike firms from the latter countries, globalizing firms of recent times during their early years of existence had little incentives to improve their technological competence. Furthermore, they generally had a one-off relationship with international technology suppliers that further prevented the regular upgrading of their technological base. Nevertheless these firms have shown themselves to be adept in facing up to the challenges of globalization by adopting innovative technological and business strategies. What are the distinctive features of these strategies? How useful are these strategies for long-run growth? What lessons can other firms and governments learn from these experiences? We hope to offer some preliminary answers to these important questions. Case studies like ours can also contribute towards developing newer frameworks for a better understanding of the internationalization of businesses in modern times.

JEL codes: L24, L25, O19, O32, M13

Key words: emerging MNCs, internationalization, technology strategies, alliances, technological catching up, Haier group, China.

UNU-MERIT Working Papers ISSN 1871-9872