The double helix effect: Catch-up and local-foreign co-evolution in the Indian and Chinese automotive industries |
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| Institution: | 1. Production and Operations Management Area, Indian Institute of Management Bangalore, Bannerghatta Road, Bangalore, 560076, India;2. Ivey Business School, Western University, 1255 Western Road, London, ON, N6G 0N1, Canada;3. Department of Strategic Management, Fox School of Business, Temple University, 548 Alter Hall, 1801 Liacouras Walk, Philadelphia PA 19122, USA;1. Accounting and Management Department, University of Mons, Place Warocqué, 17, 7000 Mons, Belgium;2. LIUC-Università Cattaneo, C.so Matteotti, 22, 21053, Castellanza, VA, Italy;3. Business, Economics and Law Department, IULM University, Via Carlo Bo, 8, 20143 Milano, Italy;4. Jönköping International Business School, Center for Family Enterprise and Ownership – CeFEO, BOX 2016, Jönköping, SE-511, SE 551 11, Sweden;1. Durham University Business School, Mill Hill Lane, Durham, DH1 3LB, United Kingdom;2. NEOMA Business School, 59 rue Pierre Taittinger, 51100, Reims, France;1. Department of Business Administration, Room 926, College of Economics and Management, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Road, Jiangning District, Nanjing, Jiangsu Province, China;2. Department of Management, Room 828, 8/F, Cheng Yu Tung Building, The Chinese University of Hong Kong, 12 Chak Cheung Street, Shatin, Hong Kong;3. Department of Human Resource and Management, Room 2017, Business School, Nanjing University, 22 Hankou Road, Gulou District, Jiangsu Province, China;1. School of Business, Hohai University, #8, Focheng West Road, Jiangning District, Nanjing, Jiangsu, Province, China;2. School of Business, Nanjing Audit University, Yushan West Road, Jiangpu Street, Pukou District, Nanjing, Jiangsu, China;3. Department of Global Trade & Management, Shinhan University, #95, Hoam-ro, Uijeongbu, Gyeonggi, South Korea |
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| Abstract: | The rapid development of emerging market firms and their foray into global value chains has attracted significant attention. In this perspectives paper, we draw on case studies from the automotive industries in India and China, to describe the coevolution of domestic firms and advanced economy multinational enterprises (AMNE) entrants. We first show that domestic firms that used catch-up strategies such as capability upgradation, investments into internal R&D and globalization through mergers & acquisitions have managed to succeed in local markets as well as climb into global value chains. We next illustrate that the strategy adopted by the most successful AMNEs involves combining the formation of vertical partnerships with local sub-assembly suppliers and horizontal collaborations with local network orchestrators. Simultaneously weaving together embeddedness in these two cortical sides of the local business eco-system on the one hand and within its global corporate value chain networks on the other – generates a “double helix” effect, whereby its local and global capabilities reinforce each other. The double helix improves cost competitiveness and pushes the product innovative envelope in both local and global markets. |
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| Keywords: | Emerging markets Multinational enterprises Domestic firms Catch up Helix effect |
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