Title: Technological innovation and emerging economy multinationals: the product cycle model revisited

Authors: Paz Estrella Tolentino

Addresses: School of Business, Economics and Informatics, Birkbeck, University of London, Malet Street, London WC1E 7HX, UK

Abstract: This paper challenges the continuing validity of three distinct propositions of the product cycle model of Vernon (1966, 1979) or its extension to Third World Multinationals by Wells (1983, 1986). This is in light of recent developments in the role of rapidly evolving technological capabilities in the emergence and evolution of MNCs from emerging economies (EMNCs). The model states that EMNCs have a narrow scope for innovation confined to imitating and adapting the innovation of the technologically leading companies as standardisation proceeds in the product life cycle. It also proposes that innovations are almost always located in the home country of national firms. Furthermore, firms exploit through international operations their unique home country-derived technological advantages. In challenging these product cycle propositions, the paper builds the case for the increasing relevance of the concepts of localised technological change and technological accumulation in explaining the rapidly evolving technological capabilities of EMNCs.

Keywords: emerging multinationals; product cycle model; innovation; multinational corporations; emerging economies; EMNCs.

DOI: 10.1504/IJTM.2017.083610

International Journal of Technology Management, 2017 Vol.74 No.1/2/3/4, pp.122 - 139

Accepted: 23 Sep 2015
Published online: 12 Apr 2017 *

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