Abstract
China and India are emerging as major entrants into the international software industry. Both are rapidly learning through outsourcing with multinational enterprises (MNEs) from advanced nations, yet their paths to this dynamic sector are very different. Chinese software firms have focused on their domestic market by working with foreign MNEs, while they move cautiously abroad. Indian firms, which are already large, continue to expand overseas as well as to climb the value chain. Different approaches to MNEs provide useful perspectives. At the same time, the innovation systems approach is necessary to explain the foundations of the industry. The article provides hypotheses and tests them. It concludes that learning internationalization processes are different in Chinese and Indian MNEs, and provides explanations for the different patterns.
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