Abstract
With the internationalization of firms from emerging-markets, the upgradation along the global value chain of emerging-market multinational enterprises (EMNEs) has attracted the attention of academics and industries. However, the role of upgradation of EMNEs in a host country to the transition of EMNEs in the home country is ignored. This study explored how EMNEs from emerging-markets could upgrade their operations in their home countries driven by the transformation of subsidiaries in host countries. An in-depth analysis of Company S was conducted to elaborate on the resources and trigger time a firm needs to transform the function of a subsidiary in the host country, and the upgradation of the firm in the home country during the internationalization process. Research on the internationalization of Company S suggested that with the complementary capabilities and markets as the fundamental basic resources, the industrial crisis triggers the firm’s upgrading in the host country. In addition, the intrafirm (internal) market mechanism makes it possible to sustain the upgrading process without conflicts between subsidiaries. Moreover, synergies will develop through interactions with subsidiaries, owing to complementary capabilities and the internal market. The synergetic development promotes the transition of firms in the home country and emphasizes the complementarity of the manufacturing and engineering service. Finally, this study demonstrates the two-stage international upgrading process, in which the international upgrading of firms in the home country is driven by the development and transition of the subsidiary in the host country, which provides contributions to the internationalization upgrading strategy and process of firms from emerging-markets.
Highlights
A growing number of researchers have recognized the importance of technological improvements in the global value chain (GVC) [1]
As that topic is under research, we chose a firm in the Chinese PV industry, Company S, for our case study to analyze the approach that a B2B manufacturing firm takes to upgrading along the global value chain
In 2011, Company S partnered with a Chinese expert and her colleagues in the PV industry in Germany, inviting her to set up its sole-invested firm in Germany (Company S—Germany) as an engineering firm that performs all operations related to PV electricity generation, from design to operations and the maintenance of PV electricity generation, using products provided by Company S—Shaoxing
Summary
A growing number of researchers have recognized the importance of technological improvements in the global value chain (GVC) [1]. The role of upgradation emerging multinational enterprises (EMNEs) in a host country in relation to their transition in the home country is ignored In other words, it is the question considering the process of international upgradation of an EMNE from an emerging-market in and out of its home country which needs further research. We selected Company S, a firm in the PV industry, as the case study to pursue answers to the research question of “how a firm from emerging-market could achieve international upgradation in the home and host countries.”. The results of our research will contribute to both the theory and practice of industrial upgrading and internationalization for companies from emerging countries in the global value chain. The paper closes with conclusions and suggestions regarding upgrading strategies
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