Formation of R & D alliances in the Chinese mobile telephony industry

Abstract

Purpose – The purpose of this paper is to investigate how international R & D alliances are formed during industry transition from the point of view of the local Chinese partner. Design/methodology/approach – Review of industry data provided by Chinese Statistical Office coupled with four in-depth case studies. Findings – The nature of the technology, the characteristics of partners and the previous cooperation experience between partners are significantly related to the R & D alliance formation. The research also suggests that during this fast-growing transition period, Chinese local firms preferred non-equity contractual agreements over equity joint venture such as R & D alliance modes, and Chinese local firms favoured American and European multinational corporations (MNCs) as their alliance partners over MNCs from other countries, including the highly developed Japan and Korea. Research limitations/implications – Single-industry focus (telecommunications), and anonymization of cases because of confidentiality of case firms. Single-country focus (China). Practical implications – Firms in China and other emerging countries can improve their technological capability (TC) by choice to facilitate future alliance formation to access and learn the latest technology from their alliance partners, especially during the transition period of an industry and when mature and emerging technologies co-exist. Originality/value – This paper refines alliance theory by focusing on an industry in transition and analyses formation decision factors from the point of view of the smaller domestic partner – usually studies do not differentiate as to industry maturity and inequality between partners.