International competitive strategy choices: comparing firms in China and India

Abstract

This study investigates the types of international competitive strategies (ICS) followed by Chinese and Indian firms. Using firm-level primary data, the contribution analyses the factors that affect ICS choices and whether these factors differ between the two countries. It argues that firms' resources and capabilities influence firms' propensity to choose a specific ICS and that the strategies differ in relation to firms' location, sector and destination market as well.

Keywords::

• capabilities
• China
• India
• international competitive strategy
• resources

Acknowledgements

The authors acknowledge and are grateful for the cooperation and financial support provided by the Swedish Research Council and National Natural Science Foundation of China. Comments by Xielin Liu, University of Chinese Academy of Sciences, Ziqi Liao, Hong Kong Baptist University, and Gary H. Jefferson, Brandeis University, were helpful in revising this paper. The authors alone are responsible for all limitations and errors that may relate to the study and the paper.

Notes

^1. While in China the internationalization processes seem to be more the result of a top-down approach fostered by national and local governments and affected by the presence of state-owned enterprises, in India it seems more the result of a bottom-up process realized by entrepreneurs (Khanna, Palepu, and Sinha 2005).

^2. The university is based in the capital, Beijing. Founded in 1978, the University of Chinese Academy of Sciences was the first graduate school in China with the ratification of the State Council.

^3. In addition to the survey, during 2009, we conducted a series of case studies both in Jing-Jin-Ji and Pune regions that further confirm this trend.

Additional information

Notes on contributors

Ping Lv

Ping Lv is an Associate Professor at the School of Management, University of Chinese Academy of Sciences, Beijing, People's Republic of China. Her research area is international business strategy, and recent research interests include foreign market entry mode of Chinese firms in their outward FDI and technology-based FDI of Chinese firms into developed countries. In the past years, she has participated in several research projects funded by the EU, the National Natural Science Foundation of China and the National Development Research Centre in the field of globalization and innovation.

Monica Plechero

Monica Plechero has obtained her Ph.D. in economic geography at Lund University in December 2012. In the past few years, she has been involved in several projects on the globalization of innovation with partners in Europe, China, India, South Africa and Brazil. Her recent research is related to how Chinese and Indian firms are upgrading their innovation capabilities to grow internationally and how regional and global linkages are affecting firms’ capacity to compete in the global market.

Rakesh Basant

Rakesh Basant is a Professor of Economics and Chairperson of the Centre for Innovation, Incubation and Entrepreneurship (CIIE) at IIM, Ahmedabad, India. His current teaching and research interests focus on firm strategy, innovation, entrepreneurial business models, public policy and regulation. Recent research has focused on capability-building processes in industrial clusters, FDI in R&D, innovation–internalization linkages, competition policy, inter-organizational linkages for technology development (especially academia–industry relationships) and strategic and policy aspects of intellectual property rights.