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New product development in emerging economies: innovation in reverse from China

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Abstract

This chapter deals with how the unique features of China impact on the R&D activities of foreign MNCs operating there. The R&D performance of companies in emerging economies triggered the interest of management scholars a few years ago, and attention has increased due to the last financial and industrial crisis which has facilitated emerging economies (and especially China) in taking the lead in global markets. The resulting importance of the Chinese market has led foreign companies to internationalize their R&D activities there. More recently, focus has been on how the Chinese market, as well as other emerging markets, could provide these companies with new sources of innovation. This means that Vernon's traditional life cycle has been reversed, as originally this role belonged to the US market. Using case studies, we analyzed four Italian companies with R&D and innovative activities in China. We show how the Chinese competitive context can trigger global innovation if stimuli are properly received at both local and corporate levels.