Globalization & Innovation with Chinese Characteristics: the Case of the Automotive Industry

Purpose – The purpose of this paper is to analyze the internationalization of Chinese new global players through innovation-oriented Mergers and Acquisitions (M&As). Design/methodology/approach – The paper combines the analysis of East-Asian and Chinese multinationals’ international expansion within international business (IB) and innovation domains, with the “latecomer” perspective. It is a conceptual contribution, based on the role of local institutions and firm’s absorptive capacity. A theoretical framework is developed, and further elucidated with two illustrative cases of Chinese M&As abroad in the automotive sector. Implications for theoretical development and practical application are then drawn. Findings – Chinese firms’ M&As abroad have become one of the preferential modes of developing Q5 innovation capabilities. The success of these endeavors is argued to be the result of a combination of a strong push from government industrial policies, along with significant internal knowledge assimilation and transformation capabilities. Originality/value – The paper extends IB literature integrating the latecomer firms’ perspective within a Q4 novel conceptual framework, which adds to the traditional resource-based arguments about incumbent MNEs asset and knowledge-seeking internationalization modes, as well as institutional and multi-dimensional absorptive capacity perspectives.