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Factors impacting firm failure and technological development: A study of three emerging-economy firms

Solmaz Filiz Karabag

Journal of Business Research, 2019, vol. 98, issue C, 462-474

Abstract: Several studies examine the successful globalization and technological development of emerging-economy firms. However, few discuss why some other emerging-economy firms do not develop sufficient technological capabilities, and thus, fail in domestics and global markets. Consequently, the understanding of emerging-economy firm diversity is limited. By analyzing the failure of three firms in two major industries in Turkey, this study identifies a complex set of factors contributing to this outcome. These factors include political risk, macroeconomic regime, national technology policies, and industry dynamics, as well as firm-related factors such as ownership, strategic intent, and the approach to, and current stage of, technology capability development. The results indicate that some of these factors support firm success in the short term but discourage learning and technological capability building, and thus, cause firm failures in the long term. Thus, the study illustrates the importance of studying emerging-economy firms from an extended contextual and temporal perspective.

Keywords: Firm failure; Technology development capability; Business group; Industry dynamics; Emerging-economy firm; Economic regime and volatility (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:jbrese:v:98:y:2019:i:c:p:462-474