Asia Pacific Journal of Management

, Volume 19, Issue 4, pp 467–488 | Cite as

Competitive Advantages of the Latecomer Firm: A Resource-Based Account of Industrial Catch-Up Strategies

  • John A. Mathews


The resource-based view of the firm provides a satisfactory account of how firms go about sustaining their existing competitive advantages, but it is less successful in accounting for how firms create such advantages in the first place, or overcome incumbent advantages, when the firms start with few resources. The paper utilizes the case of latecomer firms from the Asia-Pacific region breaking into knowledge-intensive industries such as semiconductors, to illustrate the issues involved and the resource-targeting strategies utilized. This results in a strategic theory of the overcoming of competitive disadvantages through linkage, resource leverage, and learning. The dynamic capabilities of such firms are enhanced through repeated applications of linkage and leverage. The resources strategically targeted are characterized as being those most amenable to such linkage and leverage, namely those that are least rare and most imitable and transferable, i.e. as positive versions of the criteria utilized in the conventional resource-based view of the firm. It is argued that this adaptation of the RBV is potentially of wide applicability, and is the needed amendment that makes it of prime significance in accounting for latecomer success within the conceptual framework of strategic management.

latecomer firm resource-based view of strategy industrial catch-up 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Abe, E. (1997). “The Development of Modern Business in Japan.” Business History Review 71(2), 299-308.Google Scholar
  2. Akamatsu, K. (1962). “A Historical Pattern of Economic Growth in Developing Countries.” The Developing Economies 1(Mar-Aug), 3-25.Google Scholar
  3. Amsden, A.H. (1997). “Editorial: Bringing Production Back in-Understanding Government's Role in Late Industrialization.” World Development 25(4), 469-480.Google Scholar
  4. Amsden, A. (2001). The Rise of “The Rest”: Challenges to the West from Late-Industrializing Economies. New York and Oxford: Oxford University Press.Google Scholar
  5. Amsden, A. and W. Chu. (2002). Second-Mover Advantage: Latecomer Upscaling in Taiwan. Cambridge, MA: MIT Press (forthcoming).Google Scholar
  6. Amsden, A.H. and M. Mourshed. (1997). “Scientific Publications, Patents and Technological Capabilities in Late-Industrializing Countries.” Technology Analysis and Strategic Management 9(3), 343-359.Google Scholar
  7. Bair, J. and G. Gereffi. (2001). “Local Clusters in Global Chains: The Causes and Consequences of Export Dynamism in Torreon's Blue Jeans Industry.” World Development 29(11), 1885-1903.Google Scholar
  8. Barney, J.B. (1991). “Firm Resources and Sustained Competitive Advantage.” Journal of Management 17, 99-120.Google Scholar
  9. Barney, J.B. (1995). “Looking Inside for Competitive Advantage.” Academy of Management Executive 9(4), 49-61.Google Scholar
  10. Best, M. (2001). The New Competitive Advantage: The Renewal of American Industry. New York and Oxford: Oxford University Press.Google Scholar
  11. Blomström, M. and A. Kokko. (2001). “Foreign Direct Investment and Spillovers of Technology.” International Journal of Technology Management 22(5/6), 435-454.Google Scholar
  12. Burgelman, R. (1994). “Fading Memories:AProcess Theory of Strategic Business Exit in Dynamic Environments.” Administrative Science Quarterly 39(1), 24-56.Google Scholar
  13. Campbell, A.J. (1997). “Using Buyer-Supplier Networks to Increase Innovation Speed: An Exploration Study of Thai Textile Exporters.” Asia Pacific Journal of Management 14(2).Google Scholar
  14. Chang, P.L., C.T. Shih, and C.W. Hsu. (1994). “The Formation Process of Taiwan's IC Industry-Method of Technology Transfer.” Technovation 14(3), 161-171.Google Scholar
  15. Chen, W.H. (1999). “The Manufacturing Strategy and Competitive Priority of SMEs in Taiwan: A Case Survey.” Asia Pacific Journal of Management 16(3), 331-349.Google Scholar
  16. Choung, J.Y., H.R. Hwang, J.H. Choi, and M.H. Rim. (2000). “Transition of Latecomer Firms from Technology Users to Technology Generators: Korean Semiconductor Firms.” World Development 28(5), 969-982.Google Scholar
  17. Chung, K.M. and K.R. Lee. (1999). “Mid-Entry Technology Strategy: The Korean Experience with CDMA.” R&D Management 29(4), 353-363.Google Scholar
  18. Cohen, W.M. and D.A. Levinthal. (1990). “Absorptive Capacity: A New Perspective on Learning and Innovation.” Administrative Science Quarterly 35, 128-152.Google Scholar
  19. Deardorff, A. and S. Djankov. (2000). “Knowledge Transfer under Subcontracting: Evidence from Czech Firms.” World Development 28(10), 1837-1847.Google Scholar
  20. Dierickx, I. and K. Cool. (1989). “Asset Stock Accumulation and the Sustainability of Competitive Advantage.” Management Science 35, 1504-1511.Google Scholar
  21. Enos, J. (1992). The Creation of Technological Capacity in Developing Countries. London: Pinter.Google Scholar
  22. Enos, J., S. Lall, and M. Yun. (1997). “Transfer of Technology: An Update.” Asian-Pacific Economic Literature 11(1), 56-66.Google Scholar
  23. Gerschenkron, A. (1962). Economic Backwardness in Historical Perspective. Cambridge, MA: The Belknap Press of Harvard University Press.Google Scholar
  24. Golder, P.N. and G.J. Tellis. (1993). “Pioneer Advantage: Marketing Logic or Marketing Legend?” Journal of Marketing Research 30(May), 158-170.Google Scholar
  25. Grant, R. (1991). “The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation.” California Management Review 33(3), 114-135.Google Scholar
  26. Grant, R. (1996). “Toward a Knowledge-Based Theory of the Firm.” Strategic Management Journal 17 (Special Issue, Winter), 109-122.Google Scholar
  27. Gulati, R. (1999). “Network Location and Learning: The Influence of Network Resources and Firm Capabilities on Alliance Formation.” Strategic Management Journal 20(5), 397-420.Google Scholar
  28. Gulati, R., N. Nohria, and A. Zaheer. (2000). “Strategic Networks.” Strategic Management Journal 21, 203-215.Google Scholar
  29. Hamel, G. and C.K. Prahalad. (1994). Competing for the Future. Boston: Harvard Business School Press.Google Scholar
  30. Hikino, T. and A.H. Amsden. (1994). “Staying Behind, Stumbling Back, Sneaking Up, Soaring Ahead: Late Industrialization in Historical Perspective.” In W.J. Baumol, R.R. Nelson, and E.N. Wolff (eds.), Convergence of Productivity: Cross-National Studies and Historical Evidence. New York: Oxford University Press.Google Scholar
  31. Hobday, M. (1995a). Innovation in East Asia: The Challenge to Japan. Aldershot, UK: Edward Elgar.Google Scholar
  32. Hobday, M. (1995b). “East Asian Latecomer Firms: Learning the Technology of Electronics.”World Development 23(7), 1171-1193.Google Scholar
  33. Humphrey, J. and H. Schmitz. (2000). “Governance and Upgrading: Linking Industrial Cluster and Global Value Chain Research.” IDS Working Paper 120. Brighton, University of Sussex: Institute of Development Studies.Google Scholar
  34. Kim, L. (1995). “Absorptive Capacity and Industrial Growth: A Conceptual Framework and Korea's Experience.” In B.H. Koo and D. Perkins (eds.), Social Capability and Economic Growth. London: Macmillan.Google Scholar
  35. Kim, L. (1997). Imitation to Innovation: The Dynamics of Korea's Technological Learning. Boston: Harvard Business School Press.Google Scholar
  36. Kogut, B. and U. Zander. (1992). “Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology.” Organization Science 3, 383-397.Google Scholar
  37. Lall, S. (2000). “Technological Change and Industrialization in the Asian Newly Industrializing Economies: Achievements and Challenges.” In L. Kim and R.R. Nelson (eds.), Technology, Learning, and Innovation: Experiences of Newly Industrializing Economies. Cambridge, UK: Cambridge University Press.Google Scholar
  38. Leonard-Barton, D. (1995).Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation. Boston: Harvard Business School Press.Google Scholar
  39. Lieberman, M.B. and D.B. Montgomery. (1988). “First-Mover Advantages.” Strategic Management Journal 9, 41-58.Google Scholar
  40. Lieberman, M.B. and D.B. Montgomery. (1998). “First-Mover (Dis)advantages: Retrospective and Link with the Resource-Based View.” Strategic Management Journal 19(12), 1111-1126.Google Scholar
  41. Lin, O.C.C. (1994). “Development and Transfer of Industrial Technology in Taiwan.” In O. Lin, C.T. Shih, and J.C. Yang (eds.), Advances in Industrial Engineering. vol. 20, Amsterdam: Elsevier Science.Google Scholar
  42. Lin, O.C.C. (1998). “Science and Technology Policy and its Influence on Economic Development in Taiwan.” In H.S. Rowen (ed.), Behind East Asian Growth: The Political and Social Foundations of Prosperity. London and New York: Routledge.Google Scholar
  43. Linden, G., J. Hart, J., S.A. Lenway, and T.P. Murtha. (1998). “Flying Geese as Moving Targets: Are Korea and Taiwan Catching up with Japan in Advanced Displays?” Industry and Innovation 5(1), 11-34.Google Scholar
  44. Markides, C. and P.J. Williamson. (1994). “Related Diversification, Core Competences and Corporate Performance.” Strategic Management Journal 15, 149-157.Google Scholar
  45. Mathews, J.A. (1997). “A Silicon Valley of the East: Creating Taiwan's Semiconductor Industry.” California Management Review 39(4), 26-54.Google Scholar
  46. Mathews, J.A. (1999). “A Silicon Island of the East: Creating a Semiconductor Industry in Singapore.” California Management Review 41(2), 55-78.Google Scholar
  47. Mathews, J.A. (2001). “National Systems of Economic Learning: The Case of Technology Diffusion Management in East Asia.” International Journal of Technology Management 22(5/6), 455-479.Google Scholar
  48. Mathews, J.A. (2002a). Dragon Multinational: A New Model of Global Growth. New York: Oxford University Press.Google Scholar
  49. Mathews, J.A. (2002b). “A Resource-Based View of Schumpeterian Dynamics.” Journal of Evolutionary Economics 12, 29-54.Google Scholar
  50. Mathews, J.A. (2002c). “The Origins and Dynamics of Taiwan's R&D Consortia.” Research Policy 31(4), 633-651.Google Scholar
  51. Mathews, J.A. and D.S. Cho. (1999). “Combinative Capabilities and Organizational Learning by Latecomer Firms: The Case of the Korean Semiconductor Industry.” Journal of World Business 34(2), 139-156.Google Scholar
  52. Mathews, J.A. and D.S. Cho. (2000). Tiger Technology: The Creation of a Semiconductor Industry in East Asia. Cambridge, UK: Cambridge University Press.Google Scholar
  53. McKendrick, D. (1992). “Obstacles to “Catch-Up”: The Case of the Indonesian Aircraft Industry.” Bulletin of Indonesian Economic Studies 28(1), 39-66.Google Scholar
  54. Penrose, E. (1959/1995). The Theory of the Growth of the Firm (3rd edition). Oxford: Oxford University Press.Google Scholar
  55. Peteraf, M. (1993). “The Cornerstones of Competitive Advantage: A Resource-Based View.” Strategic Management Journal 14, 179-191.Google Scholar
  56. Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: The Free Press.Google Scholar
  57. Prahalad, C.K. and G. Hamel. (1990). “The Core Competence of the Corporation.” Harvard Business Review May-Jun., 79-90.Google Scholar
  58. Reed, R. and R.J. De Fillippi. (1990). “Causal Ambiguity, Barriers to Imitation, and Sustainable Competitive Advantage.” Academy of Management Review 15(1), 88-102.Google Scholar
  59. Sanchez, R. and A. Heene. (1997). “Reinventing Strategic Management:NewTheory and Practice for Competence-Based Competition.” European Management Journal 15(3), 303-317.Google Scholar
  60. Schilling, M. (1998). “Technological Lockout: An Integrative Model of the Economic and Strategic Factors Driving Technology Success and Failure.” Academy of Management Review 23(2), 267-284.Google Scholar
  61. Schnaars, S. (1994). Managing Imitation Strategies. New York: The Free Press.Google Scholar
  62. Schumpeter, J.A. (1912/1934/1983). The Theory of Economic Development. Cambridge, MA: Harvard University Press.Google Scholar
  63. Schumpeter, J.A. (1912/2002). “The Economy as a Whole: Schumpeter's “lost” Seventh Chapter to The Theory of Economic Development.” Industry and Innovation 9(1/2), 91-145.Google Scholar
  64. Shankar,V., G.S. Carpenter, and L. Krishnamurthi. (1998). “Late Mover Advantage: How Innovative Late Entrants Outsell Pioneers.” Journal of Marketing Research 35(February), 54-70.Google Scholar
  65. Spence, A.M. (1981). “The Learning Curve and Competition.” Bell Journal of Economics 12, 49-70.Google Scholar
  66. Teece, D.J., G. Pisano, and A. Shuen. (1997). Dynamic Capabilities and Strategic Management.” Strategic Management Journal 18, 509-534.Google Scholar
  67. UNIDO. (2002). Industrial Development Report 2002/2003. Vienna: United Nations Industrial Development Organization (forthcoming).Google Scholar
  68. Vernon, R. (1979). “The Product Cycle Hypothesis in a New Economic Environment.” Oxford Bulletin of Economics and Statistics 41, 255-267.Google Scholar
  69. Vonortas, N.S. and S.P. Safioleas. (1997). “Strategic Alliances in Information Technology and Developing Country Firms: Recent Evidence.” World Development 25(5), 657-680.Google Scholar
  70. Wernerfelt, B. (1984). “A Resource-Based View of the Firm.” Strategic Management Journal 5, 171-180.Google Scholar

Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • John A. Mathews
    • 1
  1. 1.Macquarie Graduate School of ManagementMacquarie UniversitySydneyAustralia

Personalised recommendations