Exploring resources acquisition, capability development and performance implications of multinational companies from emerging economies

This study examines how multinational companies from emerging economies (EMNCs) acquire resources from their external networks of social relations and develop dynamic capabilities as the bases of internationalization. By investigating the interlinkages among knowledge strategy, resources acquisition, dynamic capability development, and performance implications, this study advances current knowledge of EMNCs.;First, this study investigates factors that affect the innovation performance of Chinese multinational companies in terms of knowledge strategy, internal competency and external networking competencies in a dynamic technological and competitive landscape. Empirical results support that knowledge strategies affect innovation performance. However, research on firms' external networking competencies have yielded mixed results. Although strong business ties with foreign multinational companies (MNCs) support innovation performance, EMNCs suffer when they excessively develop political ties with domestic governments. This study also implies that while firms can mitigate their competitive disadvantages through political ties when they suffer weak absorptive capacity, only when combined with strong absorptive capacity can they attain the benefits of foreign advanced technology. Finally, it suggests that the co-alignment of strategic options with the market environment benefits firm innovation performance.;Second, this study assesses how different types of trust affect the level of assistance EMNCs receive on technological resources acquisition from their foreign partners and ultimately their performance outcomes. Empirical results support that high cognition-based trust with Overseas Chinese MNCs reinforces the positive relationship between affect-based trust and the level of assistance on technological resources acquisition by Chinese firms. As for how trust with foreign MNCs affects the level of assistance Chinese firms receives on technological resources acquisition, empirical results indicate that high affect-based trust with foreign MNCs enhances Chinese firms' technological resources acquisition. The effect of cognition-based trust with foreign MNCs on Chinese firms' technological resources acquisition is beneficial for non-stateowned-enterprises but not for state-owned-enterprises. Further, resources that are valuable, rare, imitable, non-substitutable and generate abnormal returns fail to enhance firms' technological performance.;Third, this study examines whether the institutional relatedness of EMNCs helps them acquire critical resources in the form of social and market capital and whether these resources affect performance outcomes. The research shows that Chinese firms' institutional relatedness with government and regulatory agencies confers resources; however, it fails to sustain firms' competitive advantage. It confirms the importance for firms to improve their internal capabilities to create and sustain competitive advantage.