Adaptive Innovation in the Evolution of a Latecomer Firm: The Case of AsiaInfo China

Shanshan Zhou (), Baskaran@um.edu.my (), Mingfeng Tang () and Rajah Rasiah
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Shanshan Zhou: College of Economics, Guizhou University
Baskaran@um.edu.my: Department of Development Studies, Faculty of Economics and Administration, University of Malaya
Mingfeng Tang: Franco-Chinese Centre for Research and Innovation, School of Management, Southwestern University of Finance and Economics

Institutions and Economies (formerly known as International Journal of Institutions and Economies), 2017, vol. 9, issue 2, 75-108

Abstract: This paper is based on a case study of AsiaInfo, a latecomer telecommunications software and service firm in China. It examines whether and how adaptive innovation can enable the latecomer firms in developing countries to accumulate technological advantages and gain competitiveness to emerge as multinational enterprises (MNEs) Data for this study is obtained from a series of interviews with managers in AsiaInfo and China Mobile. This study applied an evolutionary approach to analyse complex and dynamic developments within AsiaInfo and found that the firm (AsiaInfo) has: (i) gradually obtained its competitive advantages through continuous accumulations of adaptive innovations over 20 years; (ii) accumulated adaptive innovations and its competitive advantage co-evolved with the rapidly growing demands of the Chinese telecommunication industry; and (iii) the ability to continuously generate adaptive innovations depended not only on its ability to accumulate technological innovations, but also social and organisational innovations. These factors were instrumental in enabling AsiaInfo to eventually emerge as a multinational enterprise and catch-up with other multinationals. This case study makes a significant contribution to the growing body of literature on latecomer firms’ characteristics and strategies, particularly in East Asia. It makes a theoretical contribution by modifying Michael Porter’s diamond model and integrating it with latecomer strategies that treat adaptive innovation as central for achieving competitive advantages.

Keywords: Adaptive innovation; competitive advantages; Diamond Model; latecomer firm. telecom industry; China (search for similar items in EconPapers)
JEL-codes: L21 O12 O31 O32 O33 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:umk:journl:v:9:y:2017:i:2:p:75-108

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