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Global networks as a mode of balance for exploratory innovations in a late liberalizing economy

Khan, Zaheer and Rao-Nicholson, Rekha and Tarba, Shlomo Y (2018) 'Global networks as a mode of balance for exploratory innovations in a late liberalizing economy.' Journal of World Business, 53 (3). 392 - 402. ISSN 1090-9516

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Abstract

This article suggests that under weak institutional arrangements, adverse economic conditions, and institutional voids in a late liberalizing economy, local firms that are part of the global value chains of multinational enterprises develop international networks as a balancing strategy to engage in exploratory innovations. We argue that local firms do so in order to counter the negative influences of local institutions on exploratory innovations. Using exploratory in-depth qualitative analysis, we study the suppliers of motorcycle parts in Pakistan that are working with leading Japanese and Chinese motorcycle assemblers. The results suggest that in adverse economic situations local institutional factors can sustain only the development of exploitative innovations. As a balancing strategy, motorcycle part suppliers develop international networks with global Tier 1 suppliers, international trade fairs, and international institutions. This strategy helps circumvent the negative influence of home institutional factors on developing exploratory innovations. Our study highlights the importance of global networks as a balancing strategy for creating exploratory innovations by firms in a late liberalizing economy.

Item Type: Article
Uncontrolled Keywords: Exploratory innovations, Exploitative innovations, Institutions, Late liberalizing economy, Motorcycle industry, International networks, Context, Pakistan
Divisions: Faculty of Social Sciences > Essex Business School
Depositing User: Elements
Date Deposited: 28 Nov 2019 10:45
Last Modified: 28 Nov 2019 10:45
URI: http://repository.essex.ac.uk/id/eprint/26055

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