The Mechanism Of The Multinational Corporation’s Captive Trap In Chinese Seed Market

Abstract:In the context of economic globalization, international corporations occupy the upstream position of the seed industry chain and gain competitive advantage in the market through institutional support, continuous development of technological capability and a series of strategic game. International companies traded lower profits for local market share early in the game to lock the domestic seed companies, thus formed a captive global value chain management mode (Gereffi et al,2005) in aims of controlling world seed industry for the source of the food industry. This paper attempted to analyze the mechanism of technological monopoly of international seed companies, which are the policy support, the legal environment, and the technology leading factors. In the analysis, this paper focused on the strategic actions of the multinational companies in the host country, including strategies in technology growth, marketing development, and public relation management; in other words, the firm’s boundary obscurity leaded to internal and external resource integration and technological precedence. The technological precedence of international corporations forced Chinese seed industry in the low end of the global value chain. Statistics and case analysis found that the strategic behavior of leading companies affected technological innovation capability of local seed companies. Results showed that:on the one hand, international seed companies encouraged local companies to improve their learning ability in technological research and development; on the other hand, international companies may hinder local enterprises longterm capability growth. On this basis, the paper analyzed the game of strategy selection between international corporations and local firms, and described a three-stage capture trap in dynamic analysis. This thesis also explored the counterattack or defensive strategy of the Chinese seed companies in order to improve its multi-dimensional technological capacity. In the end, this paper gave suggestions from the point of view of the government and the enterprises respectively.