Catch-up strategies in the Indian auto components industry: Domestic firms’ responses to market liberalization

MNEs create capabilities (firm-specific advantages) to integrate new knowledge and relationships from abroad with their existing routines and organizations.

“The prevalent view is that MNEs create capabilities (firm-specific advantages) to integrate new knowledge and relationships from abroad with their existing routines and organizations (Kumaraswamy et al., 2012; Narula et al., 2019).”

Firms continually develop FSAs, creating new products and processes to improve quality and value-added to access and experiment incrementally with new combinations of material, human, and knowledge inputs.

“Firms continually develop FSAs, creating new products and processes to improve quality and valueadded to access and experiment incrementally with new combinations of material, human, and knowledge inputs (Giuliani, Pietrobelli and Rabellloti, 2005; Kumaraswamy et al., 2012).”

Catch-up and upgrading by GVC suppliers often mirrors the evolution of home institutions: as institutions evolve toward liberalization, upgrading strategies change from upgrading technical competencies through licensing and collaborations, to upgrading internal R&D and developing strong relationships with lead firms.

“This explains why catch-up and upgrading by GVC suppliers often mirrors the evolution of home institutions (Kumaraswamy, Mudambi, Saranga, & Tripathy, 2012): as institutions evolve toward liberalization, upgrading strategies change from upgrading technical competencies through licensing and collaborations, to upgrading internal R&D and developing strong relationships with lead firms.”

Internal R&D becomes a dominant strategy for upgrading.

“Internal R&D becomes a dominant strategy for upgrading (Kumaraswamy et al., 2012), and suppliers with more advanced technologies become core players in their regional networks (Suder et al., 2015).”