The Evolution of Technological Capabilities at Chery Automobile: A Dynamic Resource-based Analysis

Can catching-up firms in other developing countries emulate Hyundai's learning model? This question, raised by Linsu Kim in his pioneering work, has been answered by Chery Automobile and other catching-up firms in China with their superior performance. In this article we classify four distinct and complementary dimensions of an organization's technological capability by the pattern and orientation of problem-solving: duplicative imitation, creative imitation, exploitative innovation and explorative innovation. Incorporating those technological capabilities into Helfat and Peteraf's dynamic resource-based model of capability lifecycle, we analyze the particular evolution trajectory of Chery's technological capabilities and highlight the role of selection events in capability transformation to explain how Chery achieves and sustains its competitive advantage in such a dynamic catching-up environment