Managing Innovation in Emerging Economies: Organizational Arrangements and Resources of Foreign MNEs in the Chinese Pharmaceutical Industry

Abstract

To investigate the impact of knowledge-intensive FDI in the Chinese pharmaceutical industry, this study analyzes the activity of foreign MNEs operating in this context by exploring their innovative background, the organizational arrangements they use for local knowledge creation and the performance of their local innovative processes. Based on the analysis of the universe of USPTO pharmaceutical patents applied for between 1975 and 2010 and granted to foreign assignees utilizing the work of Chinese inventors, our results show that, while the presence of foreign MNEs in the Chinese pharmaceutical industry entails a strong potential for positive externalities that could enhance the performance of the local innovation system, such externalities do not completely materialize yet, likely because of local actors’ limited absorptive capacity.

Citation

Scalera, V.G., Perri, A. and Mudambi, R. (2015), "Managing Innovation in Emerging Economies: Organizational Arrangements and Resources of Foreign MNEs in the Chinese Pharmaceutical Industry", Emerging Economies and Multinational Enterprises (Advances in International Management, Vol. 28), Emerald Group Publishing Limited, Leeds, pp. 201-233. https://doi.org/10.1108/S1571-502720150000028011