Global networks as a mode of balance for exploratory innovations in a late liberalizing economy |
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| Institution: | 1. Department of Strategy & International Business, Kent Business School, University of Kent, UK;2. Newcastle University London, UK;3. Department of Strategy & International Business, Birmingham Business School, The University of Birmingham, UK;1. Ivey Business School, Western University Canada, 1255 Western Road, London, ON N6G 0N1, Canada;2. siTechnologygroup, Inc., 213 Bournemouth Drive, London, ON N5V 4S8, Canada;3. University of Calgary, 2500 University Dr NW, Calgary, AB T2N 1N4, Canada;1. European School of Management and Technology (ESMT), Schlossplatz 1, 10178 Berlin, Germany;2. Florida International University, Miami, FL 33199, USA;3. Loyola Marymount University, Los Angeles, CA 90045-2659, USA;1. Gordon Institute of Business Science, University of Pretoria, 25 Fricker Road, Illovo, Johannesburg, 2146, South Africa;2. University of Sussex, Jubilee Building, Falmer, Brighton, BN1 9RH, UK;3. Graduate School of Business, University of Cape Town, 8 Portswood Road, V&A Waterfront, Cape Town, 8002, South Africa |
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| Abstract: | This article suggests that under weak institutional arrangements, adverse economic conditions, and institutional voids in a late liberalizing economy, local firms that are part of the global value chains of multinational enterprises develop international networks as a balancing strategy to engage in exploratory innovations. We argue that local firms do so in order to counter the negative influences of local institutions on exploratory innovations. Using exploratory in-depth qualitative analysis, we study the suppliers of motorcycle parts in Pakistan that are working with leading Japanese and Chinese motorcycle assemblers. The results suggest that in adverse economic situations local institutional factors can sustain only the development of exploitative innovations. As a balancing strategy, motorcycle part suppliers develop international networks with global Tier 1 suppliers, international trade fairs, and international institutions. This strategy helps circumvent the negative influence of home institutional factors on developing exploratory innovations. Our study highlights the importance of global networks as a balancing strategy for creating exploratory innovations by firms in a late liberalizing economy. |
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| Keywords: | Exploratory innovations Exploitative innovations Institutions Late liberalizing economy Motorcycle industry International networks Context Pakistan |
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