In this research, we explore how supply networks and board interlocks – as distinct, yet parallel interorganizational networks – jointly influence firms’ entry into new technology domains and exit from old technology domains. Drawing from the perspectives of social networks and organizational learning we highlight the relevance of the interdependency between these networks for a firm's technological entry and exit decisions. We argue that a firm that maintains a large number of supplier ties is more likely to enter new technology domains and exit from old technology domains instead. We further find empirical evidence that the degree centrality of a firm in its board interlock network strengthens these effects. Our theoretical arguments are supported through stochastic actor-based modeling analysis for the longitudinal and multilevel networks of 86 firms active in the Chinese automotive during 2011–2015. These findings inform the literature on interorganizational network dynamics as we insert relational pluralism to examine the complexities of organizational relationships as antecedents to a firms’ technological entry and exit. Finally, we imagine the implications of our analysis for management as they shed light on how multiple interorganizational relationships affect firms’ decisions on new technology entry and old technology exit.

Organizational interactions in fields, including their antecedents and consequences, remain under-researched, in particular with regard to relational distance and transformative skills. Through a comparative study of the German and Japanese wind power sectors, we explore the importance of distance among organizational actors and the development of skills. While in the case of Germany a radical increase in wind energy generation can be witnessed, the situation in the field of Japanese wind power remains largely unchanged. We show how different degrees of distance among organizational actors in these two countries result in the different development of skills that stimulate transformation in the field of energy generation. More precisely, we illustrate the pivotal role of distant challengers with their transformative skills for the successful conversion of already established field structures. Our study contributes to field theory by elaborating on the understanding of the evolution of relational distance, thereby grasping the dynamic interplay between the diversity of actors and their skill formation within a certain strategic action field.

Murmann and Vogt's (2022) analysis of the automobile industry using a capabilities framework that integrates both dynamic and ordinary capabilities supports an informative table which sets out the major relevant capabilities that incumbents, start-ups, and diversifying entrants would need to develop or access via contract or other arrangement (see Murmann and Vogt, 2022, Table 3). Jiang and Lu (2022) have further discussed new industry paradigms which they suggest will greatly challenge – and perhaps overwhelm – automotive industry incumbents. We believe that their insights can be taken a step further by focusing on two areas: first, the greatly increased availability of outsourced manufacturing driven by the shift to electric vehicle (‘EV’) powertrains; and second, the ongoing transformation of the driver and passenger experience that is driven by software–user experience software integrated with networked consumer service ecosystems.

This essay argues that to assess the likelihood that incumbent firms will successfully make the required transformations to their strategy and operations in the face of technological transformations, it is not sufficient to investigate their dynamic capabilities. Whether an incumbent is likely to succeed in its effort to change itself via dynamic capabilities depends also on how quickly start-ups or diversifying entrants can build ordinary capabilities to offer the new technology at scale. We offer a framework to assess dynamic competition that integrates both ordinary and dynamic capabilities into the analysis by systematically comparing incumbents, start-ups, and diversifying entrants. We illustrate the framework with a case study of electric vehicles and aim to show how crucial such comparative analyses are for making well-founded predictions about the likelihood that incumbents will be able to maintain their leadership positions in the future.

Through two in-depth case studies, we compare the approaches of a state-owned enterprise (SOE), Beijing Automotive Industries Holding Co., and a privately owned enterprise (POE), Geely, to acquire and absorb advanced technological knowledge to enhance their innovation capabilities. Each company acquired advanced knowledge from troubled famous Swedish automakers and upgraded their products technologically. Analyzing data mainly collected from secondary sources identifies major differences in approaches and actions at each acquisition step rooted in the type of ownership. We juxtapose these differences with insights from the literature on knowledge acquisition and research on firm ownership. Our findings show that the POE seeks the strategic goal of synergistic technology integration for better innovation and economic performance. In contrast, the SOE pursues national objectives with less regard for market success. This SOE focuses on an independent approach to knowledge absorption and development during their acquisition, whereas the POE emphasizes collaboration in innovation capacity development. This study provides insights into Chinese firms’ positioning on innovation development on the global stage, comparative capitalism, and the particular case of state capitalism in China.

To stimulate a debate about the rise of China's digital economy, this essay compares China and the US in one key area of the digital economy – e-commerce and internet-based services. China still lags behind the US in internet penetration, but it distinguishes itself by building a mobile-first, fiber-intensive, and inclusive digital infrastructure. A favorable infrastructure, innovations tailored to the large Chinese market, and local firms’ rapid commercialization of products and services turned the world's largest domestic population into active online consumers, helping China overtake the US by a large margin in retail e-commerce and digital payment. While China translated digital technologies into leading business-to-customer and customer-to-customer businesses, it has not been so successful in business-to-business services. The US is still ahead in the general-purpose technologies underlying the digital economy.

The changing geopolitical landscapes and increased migration flow across the world call for a fresh perspective on the sociocultural and economic integration of migrants in their new ‘homes’ and ‘communities’. In this qualitative process study, we provide insight into the identity work dynamics that underlie interfirm cooperation in the new business context. We see a sample of Bulgarian migrant entrepreneurs as knowledge boundary spanners who employ identity work tactics for the development of shared norms and values that facilitate knowledge exchange between their home culture and the UK host culture context. This study suggests that knowledge boundary spanning is enabled by a temporal identity work process, characterized by a series of inward and outward identity work tactics. The interplay between inward and outward identity work tactics occurs over phases of identifying identity differences, adopting identity cues, and finally, realizing hybrid identity. This article contributes to the identity work and migrant entrepreneurship literature by exploring the underlying mechanisms for realizing knowledge boundary spanning by migrant entrepreneurs.

Built upon configuration theory, this study performs a Qualitative Comparative Analysis (QCA) to delineate alternative and sufficient configurations of local knowledge spillover (LKS) channels, that is, how informal interactions and spinoff, and absorptive capacity are combined to facilitate service innovation. Primary data was collected from the largest software outsourcing cluster in Vietnam in 2018, which provides a sample size of 42 firms. The findings imply that multiple configurations of different channels of LKS in conjunction with absorptive capacity can lead to service innovation. This study makes three important contributions. First, it contributes to the debate over the critical role of LKS and absorptive capacity in innovation by offering a more holistic, yet nuanced understanding of the causal mechanisms underlying service innovation. Second, this study sheds light on viable and equifinal pathways for enhancing innovation capabilities, therefore contributing to the literature on cluster upgrading and global service sourcing. Third, it provides some managerial implications for indigenous spinoff firms in developing countries seeking to innovate through the strategic use of LKS.

While the construct of moqi (默契, pronounced ‘mò-chee’) is ubiquitously understood and finds itself in everyday conversations around the home and workplace in China, the theoretical development of moqi has been scarce. In this article, we expand on prior work on moqi and conceptualize moqi as a dyadic level construct that describes a situated state of shared contextualized understanding without saying a word between two counterparties. We further articulate a broader view of moqi as a dyadic communication construct that is both target-specific and situation-specific. We propose a nomological network of moqi that shows how shared contextualized understandings between counterparties are informed by several different layers, including ‘capability’ (a) a generalized proclivity to be able to form such understandings with others, and ‘contributing factors’, (b) how those understandings are formed either (i) through interactions or (ii) without them through overlaps in background characteristics or experiences, and (c) how other factors accentuate the capability and inclination to ultimately achieve moqi. We then discuss several potential consequences of moqi in organizational settings. Finally, we discuss why moqi is a powerful form of effective communication that is meaningful beyond the Chinese cultural context.

Since the first Trademark Law was enacted in China in 1982, the Chinese intellectual property rights (IPR) system has undergone significant changes in both the design of the legislation and its enforcement. In this article, we analyze the evolution of IPR legislation and enforcement in China. To this end, we illustrate the evolutionary changes of the Chinese IPR system and analyze the changes introduced in four revisions (1992–1993, 2000–2001, 2008–2013, and 2019–2020). Our analysis shows that Patent Law, Trademark Law, and Copyright Law have been substantially enhanced, especially since 2000, when China improved its IPR system to comply with the TRIPS Agreement and join the WTO, and especially the most recent amendments of these three IP Laws. We discuss the number of IPR infringement cases handled by both relevant administrative authorities and courts to analyze IPR enforcement in China. Results indicate that the development of IPR protection enforcement followed the improvement of relevant IPR laws. The two revisions introduced after 2008, changes in the Chinese IPR system, and an increasing number of IPR infringement cases handled by relevant authorities also suggest the willingness of the Chinese government to further enhance its IPR protection.

Past studies have shown that the flow of knowledge from incumbent firms is associated with the creation of startups and their subsequent performance. While much research has focused on the mechanisms of how incumbent-to-startup knowledge transfer takes place, such as entrepreneurs pursuing opportunities that their previous employers do not want to pursue, we explore with detailed qualitative analysis of six private startups in the Chinese synthetic-dye industry what type of knowledge actually flows and what type is more important for the long-term success of startups. We discover eight types of knowledge that flow from incumbents to new firms during the foundation of startups. Abstracting these eight types of knowledge into two general categories of functional knowledge and strategic knowledge, we find the reception of strategic (not functional) knowledge shapes the long-term competitiveness of surviving startups. Receiving technical knowledge – one type of functional knowledge – during the founding period is necessary for startups’ short-term survival but insufficient for long-term success. Our findings show that the performance implications of initial knowledge flows from incumbents hinge on the type of knowledge, contributing to a more explicit explanation of how incumbent-to-startup knowledge flows affect entrepreneurial performance.

This study presents a cross-temporal comparison of managerial ethics in China and the US. Although it is well established that cross-cultural differences exist in business ethics and that culture and values in a society may evolve over time, little attention has been paid to the longitudinal changes in such cross-cultural differences that might have occurred over time. Building on three different perspectives on values evolution, namely, convergence, divergence, and crossvergence, we investigate whether and how cross-cultural differences in managerial ethical decision-making and the associated moral philosophy have changed in China and the US over the decade between the mid-1990s and the mid-2000s. Our analysis reveals that the difference in Chinese and American managers' ethical decision-making evolved in many different directions over the decade, lending support to the crossvergence perspective. Interestingly, however, we discover that the divergence outlook prevails when it comes to the moral philosophies behind their decision-making. These findings provide critical insights into cross-cultural as well cross-temporal evolution in business ethics in a world of increasing cross-cultural and multicultural interactions.

Working for multinational companies (MNCs) is often viewed as a privilege for host country nationals (HCNs) in emerging economies. This raises the question: Why do HCNs leave their jobs to pursue the hardship of establishing their own business? This article addresses this question by adopting a phenomenon-based approach to study 12 professional service firms in Vietnam. We explore why HCNs initially become entrepreneurs and identify how they make this transition. We reveal several idiosyncratic motivations and identify four types of migration pathways: MNC returnee, committed hybrid, transitional hybrid, and direct spin-off. Our findings address the shortcomings of the existing HCNs literature that centers on MNCs’ view and employee entrepreneurship literature that overlooks the context of emerging markets. We find evidence that institutional voids often promote, rather than suppress, entrepreneurship in emerging markets. Importantly, by taking a local perspective, our findings help MNCs increase their awareness that in the fast-growing market of Vietnam, a brain drain might occur as a result of HCNs becoming entrepreneurs.

A cartel is an association of independent businesses for the purpose of regulating trade in an industry. There are three important reasons for studying international cartels: they will become important in the future; they are of immense historical significance; and they are poorly understood. This paper reviews the economic, political, and historical literatures on international cartels and considers the lessons for international business theory and policy. If IB researchers are to retain their reputation for policy-relevance, they must engage with the issue of institutional responses to globalization, and this must include the analysis of cartels.

Relationships are widely recognized as key to business success in the form of both informal interpersonal networks and formal organizational relationships. While Chinese personal networks (guanxi) have attracted scholars’ interest, the concept has not been fully investigated or understood in other contexts, especially the Middle East, where personal networks fulfill some of the same roles. The underlying socio-cultural formulae of the distinctive cultural dimensions that influence relationship formation in the Middle East also remain under-explored. This research therefore investigates the dimensions of guanxi-type relationships in the Middle East and introduces a new model integrating these relationships into the existing relationship marketing framework, enabling firms to harness personal networks for organizational gain, in turn generating customer satisfaction and retention. Using empirical data from a survey of 637 hotel guests in 17 countries – drawn from a unique target population of guests introduced to Middle Eastern hotels via personal relationships – we show how guanxi-type relationships influence organizational relationships and improve satisfaction and retention. Our significant contributions to theory and practice include extending a holistic understanding of guanxi, enhancing knowledge of its dimensions in the Middle East, and providing managers with clear evidence for a hybrid system of guanxi-type and organizational relationships.

Although transforming economies offer many examples of business model innovation, they have been largely overlooked in academic research, with most studies focusing on what happens in developed countries. However, in their push to become innovation economies, transforming economies have become experimentation arenas for new ways of doing business. This special issue addresses the gap in business model innovation research in several ways. First, we develop a co-evolutionary framework in which we consider what type of business model innovation occurs in transforming economies (adoption, adaptation, or creation) and who the central players are (indigenous firms or MNEs). We show how, through business model innovation, indigenous firms have begun to challenge global industry leaders – despite not having the same resource advantages, proprietary technology, or market power – and we highlight the consequences of this for the domestic and global environment. Second, we discuss how the articles in this special issue advance research by contributing to a co-evolutionary perspective on business model innovation for a global and digital world. Third, to guide future research on business model innovation in the fascinating context of transforming economies we outline various directions that could build on our framework and the articles presented here.

Organizational hybridity refers to the combination of multiple institutional logics and identities that, within an organizational setting, do not conventionally complement one another. In such conditions, organizations must develop strategies to combine logics and sustain their hybrid forms. Success, however, is not inevitable. In this article, we take a legitimacy-as-process perspective to focus on a failed Microfinance Organization (MFO) in the African context of Zambia. MFOs represent a fascinating context because of their hybrid nature and need to balance several competing institutional demands. We utilise field interviews to analyse the process through which MFOs fail, analysing actor legitimation responses to emerging hybridity demands. We identify three phases associated with these changes: 1) dependent coupling, (2) misaligning legitimation, and (3) circumnavigating over conformity. Our findings emphasise that legitimation efforts in a failed hybrid are not simply the reverse of those that succeed. We observe adaptive processes consistent with successful hybrids but that ultimately sow the seeds of eventual failure. This demonstrates the need to re-think the role of legitimation strategies in hybrids alongside their potential deleterious consequences.