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Catch-up as a Survival Strategy in the Solar Power Industry

Snehal Awate, V. Ajith and Ajwani-Ramchandani, Raji

Journal of International Management, 2018, vol. 24, issue 2, 179-194

Abstract: We evaluate the strategies of the emerging market firms in the context of nascent industries. We use the Indian solar power industry as the empirical setting, against the backdrop of the evolution of the global industry, While in traditional industries emerging market firms learn from advanced economy multinational enterprises (MNEs) and slowly upgrade their capabilities, in the intensely competitive environment of nascent innovative industries, emerging market firms are exposed to global competition in their home market right from the early years. This shortens their catch-up clock. As a result, their long-term survival depends on their ability to catch-up fast, both in output and innovation capabilities. In the solar power industry, we find that innovations stem, in the main, from advanced economy firms. Further, Chinese firms are beginning to move from cost-based imitation to innovation. In contrast, with a few key exceptions, most firms in the Indian solar industry remain locked within a narrow niche of downstream site-based installation. Their operations are opportunistic, short term, and without specific catch-up goals, a scenario that does not bode well for the industry's future in India.

Keywords: Emerging market firms; Emerging industries; Catch-up; Solar power; India; China (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:intman:v:24:y:2018:i:2:p:179-194