Special Issue on 'New Insights into Niche Leaders in China and Beyond'

Guest Editors

Peter Ping Li,^1,2 Aiqi Wu,³ Steven Shijin Zhou,⁴ and Yingya Jia^{5 1}Dongbei University of Finance & Economics, China ²Xiamen University, China ³Zhejiang University, China ⁴University of Nottingham, Ningbo China, China ⁵Shanghai University, China

PDW submission deadline: January 31, 2025

Manuscript submission deadline: December 31, 2025

Special Issue Theme Background

Research has consistently demonstrated that small and medium-sized enterprises (SMEs) have distinctive characteristics as compared to bigger firms in terms of their strategy (e.g., Wiklund & Shepherd, 2003), internationalization process (e.g., Lu & Beamish, 2001), innovation (e.g., Terziovski, 2010), and human resource management (see Harney & Alkhalaf, 2021). It has also been acknowledged that SMEs are more subject to the influence of external contexts, especially those SMEs in the emerging economies, which have demonstrated unique patterns in their development process (e.g., Child, Karmowska, & Shenkar, 2022; Tang, Nadkarni, Wei, & Zhang, 2021). In general, firms in emerging economies have less advanced resources than firms in developed economies, while SMEs in both economies have limited access to these resources, with SMEs in emerging economies at the biggest disadvantage. However, in the context of China, the special form of SMEs, i.e., small niche leaders (专精特新企业 in Chinese), have been recently recognized as outperforming their SME peers. In particular, such small niche leaders have the potential to become large niche leaders (单项冠军企业 in Chinese), which is related to so-called hidden champions with a typical annual revenue not exceeding 5 billion Euro (Simon, 1999).

Regardless of their size, niche leaders are defined broadly by two primary characteristics: (1) a strong focus on their niche market so as to differ from diversified counterparts, and (2) an innovation-driven approach that distinguishes them as leaders within their niche domains. We expect that small niche leaders are distinctive from other SMEs, while also different from large niche players.

To better differentiate the research subjects of this special issue, i.e., niche leaders, from those terminologies which have been discussed in the existing literature, we list the major differences in Table 1.^[1]

[1] We fully acknowledge that some firms may not have applied for/been awarded these titles, but the basic characteristics of the firm fit well with these criteria. These firms are also considered as niche leaders.

Table 1. Diverse types of firms related to niche leaders

	Chinese SMEs in General	Small Niche Leaders	Small Niche Leaders	Small Niche Leaders	Large Niche Leaders (Niche Champions & Hidden Champions)
		Innovative SMEs	SADI SMEs	SADI Little Giants
Revenue (RMB)	Less than 400 million	N/A	More than 10 million	More than 100 million	More than 400 million (less than 5 billion Euro for hidden champions)
R&D (RMB/ percentage of revenue)	Less than 1%	With key patent or higher than 3%	More than 1 million and higher than 3%	More than 10 million and higher than 3%	Higher than 3%
Numbers of Players	52 million+	215,000+	100,000+	12,000+	1550+ (China) 3200+ (global) 1570+ (Germany)
Market Share	Small	Moderate	Moderate	Higher than 10% in home market	Among top 3 in the world

In general niche leaders have the following four core features:

1. Specialized in a niche business (e.g., component segment);
2. Advanced in business processes (e.g., lean production);
3. Differentiated from competitors )e.g., unique competitive advantages);
4. Innovative to provide novel products and/or services to their customers.

Further, the above four core features can be grouped into two primary dimensions: (1) combining specialized and advanced features into a niche-focused dimension, and (2) combining differentiated and innovative features into an innovation-driven dimension. The two primary dimensions are consistent with two of Porter’s three generic strategies (i.e., focus strategy and differentiation strategy, Porter, 1985).

Despite their unique features on the two primary dimensions, niche leaders have rarely been studied, so there is little knowledge about how niche leaders are born and grow, and which conditions are favorable toward the development of niche leaders, especially from small niche leader to large niche leaders. Considering the above issues in the special context of emerging economies, where the institutional and business environment are not well-developed, while most enterprises tend to compete on cost and price due to the weak supply of innovation resources, why can there be niche players driven by long-termism and innovation? This special issue seeks to develop a systematic understanding of this area. In particular, we are most interested in the pattern of SMEs in general and niche players in particular growing from small firms to large firms, especially why large firms can still remain niche-focused despite their large size.

Scope of the Special Issue

The purpose of this special issue is to explore new insights into niche leaders both in China and beyond from diverse perspectives. Given this goal, we delineate the overall scope of the special issue below. 

Research on the Interplay between External Contexts and Niche Leaders

Niche leaders must continually adapt to the changing contexts of competition, which can include fluctuating customer demands, technological advances, value chain shifts, and political pressures, among others as parts of the business ecosystem. The agility on the part of niche leaders is often cited as the unique strength of being small, allowing them to adapt rapidly to contextual shifts (Wiklund & Shepherd, 2005), especially under increasingly VUCA (volatile, uncertain, complex, and ambiguous) conditions. For their unique advantages, niche leaders choose to be persistent with a sharp focus on a specific niche market segment. However, this persistent focus on a special niche can also become a liability due to the lack of fungibility with the broad potential to diversify into multiple market segments (cf. Eisenhardt & Martin, 2000). Hence, we need to explain how niche leaders balance focus and fungibility concerning their interaction with the external context.

Compared with big firms with more resources, SMEs have bigger challenges from institutional pressures, such as the regulations imposed by the state and other entities. As niche leaders are more innovative than other SMEs, the former are expected to be able to manage institutional pressures more effectively than the latter (Greeven, Yip, & Wei, 2019; cf. Simon, 2009; Witt, Khalik, & Godinez, 2024). However, we still have limited knowledge about how niche leaders specifically address various institutional pressures, as compared to large firms or other SMEs.

Niche leaders that actively participate in industry clusters or business ecosystems tend to enjoy some benefits due to enhanced access to market opportunities, knowledge spillovers, and collaborative potentials. However, industry clusters in China have been criticized in terms of being too homogeneous, thus causing hyper-competition in the same ‘red ocean’ market (cf. Kim & Mauborgne, 2005), so they need to be upgraded into effective ecosystems (Stonig, Schmid, & Müller‐Stewens, 2022). We need to explore if and how niche leaders have the potential to transform the extant industry clusters in China into some healthy ecosystems with interdependent firms for value co-creation and value co-capture.

Research on the Mechanisms and Paths of Niche Leader Growth

According to Penrose's (1959) seminal work, there are two different connotations of the term 'growth': quantitative ('getting bigger', merely increase in quantity) and qualitative^[2]  (‘getting better’, an improvement in quality). Regrettably, the large bulk of extant literature of firm growth has been focused mainly on the results of quantitative growth in terms of size, sales, profits, employees, and market size (Davidsson, Achten-hagen, & Naldi, 2005), leaving qualitative growth issue understudied. The emphasis on ‘change in amount’ is ‘premature and overly simplistic’ (Leitch et al., 2010: 258). It is worth noting that the empirical findings show that some niche leaders do not necessarily have quantitative growth goals, and that many entrepreneurs and managers deliberately follow a qualitative rather than a quantitative growth path for their firms (de Souza & Seifert, 2018; Pechlaner, Raich, Zehrer, & Peters, 2004; Pencarelli, Salvelli, & Splendiani, 2008). Especially for niche leaders, improvements in innovation capabilities, product and service quality, reputation in a niche market, and corporate sustainability are more salient than just maximizing shareholder value. In this way, the qualitative nature of niche leaders’ growth may provide an alternative to solely quantitatively oriented theories of firm growth (Sternad & Mödritscher, 2022).

In addition, there may be some temporal effects of growth mode among niche leaders. Niche leaders typically adopt three different modes of growth, namely organic growth, growth by acquisition, and hybrid models (McKelvie & Wiklund, 2010; Penrose, 1959). Although the three modes have been discussed well in literature, we know so little about the sequence, combination, and timing of such growth modes for niche leaders; the short- vs. long-term effects of such growth modes, and the synchronization and rhythm of such growth modes. To address the above gaps in the literature, we need innovative methodologies closely linked to practical reality, such as the qualitative methods of ethnography and longitudinal or real-time case studies (Davidsson & Wiklund, 2000), as well as those sophisticated quantitative methods, including the use of artificial intelligence (AI). 

Even though we know comparatively more about the drivers for diversification (e.g., social and economic motivations, Vik & McElwee, 2019), most niche leaders choose to focus on a niche business as their strategy for growth. Hence, we need to study if and how to balance focus with diversification as a possible mix for corporate growth. In this regard, the notion of exaptation, defined as repurposing an existing technology or one of its functions to one or more novel market applications beyond the original plan (Andriani, Ali, & Mastrogiorgio, 2017; Andriani & Kaminska, 2021; Beltagui, Rosli, & Candi, 2020), has the potential to explain how to achieve the possible balance between focus and diversification (e.g., the T-model and Y-model, Li, Wu & Wu, 2024).

Research on the Internationalization of Niche Leaders

Compared to diversified firms, niche leaders confront more and bigger resource constraint challenges when entering foreign markets, as implicitly assumed by the compositional springboading view or CSV (Li et al., 2022). However, as the niche players with relatively limited domestic markets, niche leaders often need to actively diversify into international markets, as in the case of hidden champions (Greeven et al., 2019; Simon, 2009; Witt et al., 2024).

Further, the emerging trend of deglobalization in general and US-China decoupling in particular bears special implications for niche leaders in China (Li et al., 2021; Witt, Lewin, Li, & Gaur, 2023). This is especially salient for those niche leaders that are included in the US ‘entity list’.

Finally, in the context of US-China decoupling, some scholars posit that certain firms could serve as a vehicle to promote new techno-nationalism (Luo, 2022). In order to enhance the resilience of China’s industries so as to offset the negative impact of deglobalization and decoupling, niche leaders are expected to play an increasing role in strengthening supply chains in China.

Research on the Human Dimensions of Niche Leaders

Small niche players may not have the same capacity to attract top talents as large, diversified firms do (Cardon & Stevens, 2004). For instance, small niche players may struggle to offer competitive salaries and benefits as well as training opportunities compared to large, diversified firms, thus negatively affecting employee loyalty and commitment (Kotey & Slade, 2005). Hence, relative to large, diversified firms, employees of small niche players may have a different career path (Arthur & Hendry, 1990). Further, there is a greater need for small niche leaders to recruit and also retain talent to facilitate continuous innovation. In this sense, small niche leaders may have even more challenges than SMEs in terms of human resources. It would be interesting to find out if the above challenges also apply to large niche leaders to various degrees.

Current studies show that founders’ personal characteristics, such as their education level, industry experience, and entrepreneurial traits, have been linked to the success of SMEs (Ucbasaran, Westhead, Wright, & Flores, 2010). The research also shows that entrepreneurs’ passion, motivation, capability, and social network are significant driving forces for corporate development (Chen, Yao, & Kotha, 2009; Davidsson & Honig, 2003; Levie & Autio, 2013; McKelvie, Brattström, & Wennberg, 2017). It is worth examining if the above findings apply to niche leaders, both small and large.

However, a significant number of niche leaders’ founders are technicians, who have distinct characteristics as compared to traditional “entrepreneurs” as businessmen. Moreover, the tradeoff between “Jack of all trades” and specialist in human capital (Lazear, 2005) is particularly crucial for niche leaders. We need to further explore the potential link between such founders’ characteristics and the growth of niche leaders. 

In general, we would like to emphasize that regardless of the scope or perspective of the manuscript, we expect both theoretical and practical contributions. In terms of the theoretical contribution, the special issue welcomes papers that integrate theories from different domains (e.g., combining theories of innovation with theories of international business) and relevant fields (e.g., economics, sociology, and psychology) to explain the unique phenomena associated with niche leaders. For practical contributions, we encourage authors to showcase how their theoretical findings could be applied to real-world settings, particularly by niche leaders’ executives and state’s policymakers.

Typical Research Questions

Below is an brief description of potential research questions suitable for this special issue:

Concerning the Interplay between External Contexts and Niche Leaders

1. What are the macro (e.g. digitalization, deglobalization) and meso (e.g. industry ecosystem, cluster) environmental  factors for the growth of niche leaders?
2. How do these factors shape niche leaders' opportunity recognition, resource orchestration, and strategic response?
3. How do niche leaders contribute to the development of the ecosystem and industrial cluster they are embedded in?
4. Do niche leaders acquire their resources (e.g., unique knowledge) from external sources or accumulate such resources internally?

Concerning the Mechanisms and Paths of Niche Leader Development

1. What is the typical growth mode of niche leaders?
2. How do general SMEs evolve into niche leaders? Are there new growth mechanisms and paths for niche leaders (e.g. exaptation)?
3. How are the qualitative results of niche leaders enhanced or improved over time?
4. What is the relationship and transformation between qualitative and quantitative growth of niche leaders? For example, how a quantitative accumulation of resources enables qualitative growth of a niche leader?
5. How to select an appropriate growth mode for niche leaders that yields positive external outcomes for different stakeholders and environments?
6. What are the temporal effects of growth modes for niche leaders?
7. What roles do different resources and dynamic capabilities play in the growth process of niche leaders?
8. Given many niche leaders are family businesses, how can such firms initiate inter-generational succession to achieve sustained growth?

Concerning the Internationalization of Niche Leaders

1. How can niche leaders undertake globalization in the context of decoupling and supply chain disruptions?
2. How can niche leaders collaborate with global leading companies in the globalization process?
3. How can niche leaders leverage cross-border digital platforms (e-commerce, social media, etc.) to expand into international markets?
4. How can niche leaders' inward internalization experience facilitate their globalization process?

Concerning the Human Dimension of Niche Leaders

1. Investigating the uniqueness of niche leaders' founder and TMT, what are the special characteristics of these people and how do these characters continuously influence the development of niche leaders?
2. How do founders deploy firm-specific (depth) and general (breadth) human capital to facilitate the growth of niche leaders? 
3. Due to the talent limitation, what will niche leaders do to self-create, transform and amplify the existing pool of human resources?
4. What is the career path (including career attainment and mobility) of founders and managers in niche leaders?

Submission Guidelines

We welcome both macro-level and micro-level papers and also papers using various methodologies, including qualitative studies, quantitative analyses, mixed methods, and systematic reviews. The SI also encourages comparative studies (China and non-China contexts) that can help establish reliability and generalizability of the findings and also provide new insights regarding niche leaders in different markets and cultures.

Following the ‘new MOR policy’ (Lewin et al., 2016), we strongly encourage authors who want to submit to this SI to deposit their data in an open-access repository, which allows independent researchers to reproduce the reported results and also allows for replication and further extension. We believe it is critical to connect the academic community through the sharing of data, especially in the niche leader study domain (see Guo, Wang, Wang, & Li, 2023 as an example for replication and extension of a previous study). We also want to point out that we welcome replications, non-results, and non-significant findings that lead to advances in knowledge in the area of this SI. The editorial team also plans to share a dataset of niche leaders when the SI is published.

Manuscripts must be submitted electronically through MOR’s ScholarOne Manuscripts site at http://mc.manuscriptcentral.co... by December 31, 2025. Please ensure that the submission is identified as for the ‘New Insights into Niche Leaders in China and Beyond” special issue and prepared in accordance with MOR’s style guide. For any inquiries related to the special issue, please contact Professor Aiqi Wu at [email protected].

Special Issue PDW

A paper development workshop (PDW) will be organized in March 2025, which is specially designed for authors associated with the special issue. The guest editor team will also invite a few industry practitioners who could provide practical insights into the research area. It is imperative to note that attendance and presentation at the workshop does not guarantee acceptance of the paper for publication in the special issue. Similarly, attendance at the workshop is not a precondition for paper acceptance into the special issue.

To successfully complete the PDW submission process, we kindly request authors to submit a comprehensive version of the research proposal to Professor Aiqi Wu at [email protected] before January 31, 2025. Workshop invitation letters will be issued before the end of February 2025.

Special Issue Guest Editors

Peter Ping Li ([email protected]) is Professor of Chinese Business Studies at Copenhagen Business School, Denmark, chaired visiting professor at Dongbei University of Finance & Economics, Xiamen University, and Zhejiang University, China.

His primary research focus is on building geocentric (West-meeting-East) theories from cultural and historical perspectives, especially applying the Chinese philosophy of wisdom to the development of holistic, dynamic, and duality theories. He has been widely recognized as one of the global thought leaders in two of the fastest emerging research streams: (1) multinational firms from emerging economies, and (2) indigenous research on Chinese management. He is among the Stanford University List of World Top 2% Scholars in 2020–2023 (ranked 719 out of 52,318 in the field of Business & Management in 2023, one of the three scholars in China).

Aiqi Wu ([email protected]) is Professor at the School of Management, Zhejiang University. His research interests include entrepreneurship, internationalization, and strategic management of new ventures and SMEs. He has publications in journals such as Management and Organization Review, Journal of World Business, Journal of International Management, and Journal of Business Research. He has also authored books, such as Expertism Wins: The Growth Road of Specialized, Differentiated, and Innovative Firm.

Steven Shijin Zhou ([email protected]) is an Associate Professor in the Department of International Business and Management, Nottingham University Business School, China. He teaches innovation, strategy, and cross-cultural management. His research focuses on indigenous research in China, innovation, and organizational learning. He has published peer-reviewed papers in journals such as Journal of International Business Studies, Management and Organization Review, and Asia Pacific Journal of Management, among many others.

Yingya Jia ([email protected]) is an associate professor in the School of Management at Shanghai University. Her research interests include strategic leadership in new ventures, and error/failure management in entrepreneurship and innovation. Her work has been published in the Journal of Applied Psychology, Management and Organization Review, and other leading management journals in China and abroad. She received her PhD from Fudan University in 2019.

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