A Strategy Quadripod Perspective of Chinese Firms’ International Competitiveness

With the advent of globalisation, the economic, political and technological conditions in emerging economies (EEs) tend to be more volatile or changeable than developed countries and, as their business environment evolves rapidly, the influences on the international competitiveness of firms also change significantly. As such, it has become critically important to understand how firms overcome their disadvantages, leverage their internal and external resources and capabilities, and build sustainable competitiveness in the global market. Despite the increasing relevance of this issue, the key determinants of MNEs’ international competitiveness have not been adequately examined in the literature. More specifically, much of the existing research tends to isolate individual variables or consider only a limited subset of factors, thereby limiting our understanding to the complex interplay among multiple determinants of competitiveness. In response, this thesis aims to examine the multilevel antecedents of international competitiveness within emerging-economy MNEs by integrating the strategy tripod view (Peng et al., 2008) and dynamic managerial capability (DMC) perspectives.Most notably, the strategy tripod view posits that a firm’s strategy—especially in international contexts—is shaped by three complementary perspectives: institution-based view, industry-based view and resource-based view (RBV). The strategy tripod view addresses limitations of relying on just one perspective, showing that combining industry, resource, and institutional insights results in a more robust understanding of complex phenomena, such as internationalisation and global expansion, which provides a theoretical foundation for the study of international competitiveness. However, it overlooks the effects of individual-level factors, especially how the individual characteristics interact with institutional and industry environments, as well as internal firm resources, and how these relationships impact firm performance in the global market. On the other hand, DMC literature emphasises the importance of individual’s human capital, social capital and cognitive capabilities to sense, seize, and transform opportunities in shaping firm strategies and outcomes (Adner & Helfat, 2003; Helfat & Martin, 2015). Although the international business field has revealed the need for cooperations and interactions with individual capabilities, these two theories have developed independently, limiting our holistic understanding of the potential antecedents for international competitiveness; particularly how managers navigate, integrate and reconfigure organisational resources to co-evolve with institutional and industrial environments.To address this gap, I extend the scope of the strategy tripod view by incorporating the DMC perspective, aiming to delineate the effect of the DMC’s core attributes that in conditioning the influence of institutional, industrial and firm-level domains, and proposing a multilevel theoretical framework – strategy quadripod view. In line with the logic of co-evolution perspective (Lewin & Volberda, 1999; Cantwell et al., 2010), I argue that as the institution and industry environments evolve, firms should develop strategic methods to deploy their internal resources in order to “fit” with those external environments. Simultaneously, individuals must co-evolve their capabilities to better interact with the contingent factors associated with institutional, industrial and firm level characteristics. Specifically, this study examines the impact of perceived institutional support, industry cluster, and the intensity of digitalisation on international competitiveness, with firm-level innovation capability as a mediating mechanism. It also explores the moderating effects of top managers’ human capital, social capital, and cognitive abilities across institutional, industry, and firm domains.To test the proposed model and associated hypothesis, Chinese MNEs, as typical EE firms, are the perfect natural laboratory to examine international competitiveness. A survey was conducted among 236 top managers at the headquarters of Chinese textile firms and their counterparts in foreign subsidiaries or international trade roles. Structural Equation Modelling (SEM) in Analysis of Moment Structure (AMOS) software was employed to assess mediating and moderating effects, with Statistical Package for Social Science (SPSS) used for data management and descriptive analyses. Key findings indicate that institutional support, industry cluster, and digitalisation intensity positively influence radical innovation but negatively affect incremental innovation. These outcomes enhance patent performance and return on investment but reduce management satisfaction. In addition, the moderation results indicate that a manager’s government networking unexpectedly weakens the relationships between institutional support and radical/incremental innovation; a manager’s age amplifies the influence of clustering on radical/incremental innovation; a manager’s attention on R&D surprisingly dampens the relationships between intensity of digitalisation and radical/incremental innovation.This study makes four contributions. First, it introduces the strategy quadripod framework by integrating DMC with the strategy tripod view to provide a more comprehensive explanation of firm performance in international contexts. Second, it bridges the fields of strategic management (SM) and international business (IB) by advancing a multilevel perspective that connects macro-, meso-, micro-, and individual-level factors, studying the interaction and cooperation among those factors and their effects on MNEs’ international competitiveness. Thirdly, this study contributes to digitalisation literature by delineating the distinguishing characteristics of digitalisation and its profound implications for MNEs’ innovations and international competitiveness, while also highlighting the contingent role of managers’ cognitive capabilities in linking digitalisation to innovation. Lastly, this study challenges the assumption of homogeneity in the industry cluster literature and highlights the moderating influence of cluster size on innovation and firms’ international competitiveness.