How latecomers strategically respond to global-local resources and leverage local ecosystems: Evidence from China's integrated circuit design firms

Abstract

Recent literature on global value chains (GVCs) in emerging economies has mainly stressed the significant role played by GVC participation in facilitating the development of latecomer firms. However, less attention has been given to understanding how local ecosystems contribute to latecomer development. Echoing the recent call for more studies on GVCs and local ecosystems, this paper builds upon resource dependency theory and conceptualizes a framework to examine how latecomer firms strategically respond to the resources derived from a double-sided interaction, i.e., global and local. A multiple-case study method was adopted and three domestic integrated circuit (IC) design latecomer firms in China's Pearl River Delta were investigated to fulfil the research objective. The findings highlight the critical role of market resources offered by local ecosystems in supporting the development of latecomers, enabling latecomer firms to configure knowledge adapting a strategic orientation. This further shapes the development routes and builds up potential capacities to overcome the hindrances of GVCs. Theoretical and practical implications are discussed, alongside future research areas.