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This study aims to explore the dynamic capabilities of international intermediaries that cooperate with Chinese factories. The authors determine the structure of these dynamic capabilities and inquire into the manner in which they allow an intermediary to respond to external change. Furthermore, the authors examine these capabilities both before and during a financial crisis in order to better understand how an international manufacturing intermediary can succeed during a poor economic situation.

Based on a case analysis involving multiple organizations, the authors use triangulated data from a variety of sources: five American intermediaries, 28 Chinese factories, and additional source data.

Results from this study show that, compared to other firms, intermediary organizations contain additional dynamic capabilities. This allows for the creation of a new three-tier model of intermediary capabilities: internal dynamic capabilities, external network capacity, and external dynamic capabilities. Furthermore, the authors demonstrate that impression management, guanxi, and other external dynamic capabilities can be used to influence how external firms allocate and re-allocate their resources and thus become a crucial dynamic capability. This case analysis also determines that the financial crisis actually strengthened the dynamic capabilities of these intermediaries.

This paper is the first to determine the structure of the dynamic capabilities for this type of intermediary and to demonstrate that they possess dynamic capabilities that can influence how an external firm re-allocates resources. Additionally, the authors extend the dynamic capabilities literature to the type of firm that operates in an emerging economy.