Joint-Ventures, Technology Assimilation and Emerging Multinationals: Comparing the Automotive Industry in China and India

Multinational enterprises (MNEs) from emerging countries are new and dynamic actors
on the global scene. Among them, Chinese and Indian MNEs have actively contributed
to this scene. A growing number of firms have been able to acquire frontier technologies
from Western and Japanese MNEs, often through joint ventures (JVs) and alliances,
and, subsequently, to grow internationally. Therefore, a relationship between inward
and outward foreign direct investments emerges. These emerging multinationals, deeply
embedded in their home countries, are also affected by ownership patterns, institutional
and policy factors.
These processes are specially relevant in the case of the automotive industry in China
and India, where a geographically fragmented (in China) or concentrated (in India)
domestic market goes along with a growing export performance and an early multinational
production.
This presentation examines different trajectories of Chinese and Indian car companies,
their modes of technological catching-up, innovation processes and market strategies, to
question in conclusion the theories of emerging multinationals and of joint ventures.
Joint ventures and partnerships are seen as crucial instruments of learning and transition,
as well as peculiar institutions, where cooperative behaviour coexists with competition
and power relations between partners. The processes of technological catching up, by
leveraging knowledge in the joint ventures or by different strategies, are a pre-condition for
the early stages of multinational growth by Indian and Chinese companies.
Asset-seeking strategies of multinational growth are a peculiar feature of emerging
multinational actors. The acquisition of Volvo by the private Chinese carmaker Geely in
2010 represents a paradigmatic case of an asset-seeking strategy, which sheds light on
the role of policies and institutions in the parallel trajectories of technology catching up and
international growth.