A Conceptual Framework For Latecomer Linkage Capabilities
A Conceptual Framework For Latecomer Linkage Capabilities
A Conceptual Framework For Latecomer Linkage Capabilities
Published in:
Industrial and Corporate Change
Publication date:
2021
Document Version
Publisher's PDF, also known as Version of record
Citation (APA):
Reinauer, T., & Hansen, U. E. (2021). A conceptual framework for latecomer linkage capabilities. Industrial and
Corporate Change, 30(6), 1539–1556. https://doi.org/10.1093/icc/dtab014
General rights
Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright
owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.
Users may download and print one copy of any publication from the public portal for the purpose of private study or research.
You may not further distribute the material or use it for any profit-making activity or commercial gain
You may freely distribute the URL identifying the publication in the public portal
If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately
and investigate your claim.
Industrial and Corporate Change, 2021, Vol. 30, No. 6, 1539–1556
doi: https://doi.org/10.1093/icc/dtab014
Advance Access Publication Date: 21 May 2021
Original Article
Abstract
In this article, we put forward a framework for conceptualizing processes of linkage capability-building
in firms based in developing countries, so-called latecomer firms. To do this, we combine the litera-
ture on latecomer capabilities with insights from the literature on industrial marketing and supply-
chain management. Our framework distinguishes between different levels of development across
three capability categories: envisioning opportunities for useful market and knowledge-based link-
ages, engaging with external partners in ways that create suitable organizational arrangements, and
exploiting relationships for technological learning.
JEL classification: O31, O32, O33
1. Introduction
There is a rich literature investigating how firms in developing countries, often referred to as latecomer firms, in-
crease their economic performance and competitiveness by building their technological capabilities (Dahlman et al.,
1987; Lall, 1992; Kim, 1997; Romijn, 1997; Bell and Figueiredo, 2012; Dutrénit et al., 2013). This literature has pro-
duced numerous theoretical frameworks for understanding the capability-building process and has provided empiric-
al insights into the experiences of various firms, industries, and economies.
Particularly relevant in this regard has been the conceptualization of different capability functions within late-
comer firms. In a seminal paper, Lall (1992) introduced a framework for analyzing sets of such functions, including
capabilities for pre-investment activities, project execution, process engineering, product design, industrial engineer-
ing, and linkage to external partners. For each of these functions, Lall defines multiple stages of complexity through
which the latecomer firm progresses as it moves up the capability trajectory. He argues that the firm needs to develop
at least a minimum level of competence in each function in order to be able to operate successfully in competitive
markets. The idea of different capability functions has subsequently been adopted by a large number of studies in the
literature on latecomer capability-building (e.g., Bell and Pavitt, 1995; Figueiredo, 2003; Ariffin and Figueiredo,
2004; Kiamehr, 2017). These provide frameworks that provide more granular categorizations of various capability
functions and levels of advancement, often in relation to particular industries.
C The Author(s) 2021. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.
V
1540 T. Reinauer and U. E. Hansen
While this literature contains detailed descriptions of different kinds of production- and investment-related cap-
ability functions, the conceptual understanding of the category of linkage capabilities has remained largely un-
changed since Lall’s (1992) original work. Linkage capabilities are defined as those required to transfer knowledge
and skills to, and receive them from, different kinds of actors in the domestic economy and abroad (ibid.: 168). This
concerns linkages with a variety of market and nonmarket actors, including suppliers of components and raw materi-
als, subcontractors, technology users, retailers, consultants, standard-setting bodies, quality-testing laboratories, and
research institutes.
The limited amount of attention that has been paid to this particular type of capability is somewhat surprising, as
linkages to public research institutes—and, as such, conform to the definition of linkage capabilities we adopt in this
article (see Section 1).
Some authors in the literature on industrial marketing and supply-chain management have developed frameworks
with which to conceptualize the different components of a firm’s ability to build relationships with its external part-
ners. For example, Lambe et al. (2002) focus on what they call alliance competences in firm dyads (e.g., in manufac-
turer–supplier relationships, joint ventures, technology-licensing agreements, or R&D collaborations), which they
define as the interorganizational ability to find, develop, and manage alliances. They argue that this includes the abil-
ities (i) to identify suitable partners through systematic and proactive scanning of the business environment, and (ii)
Figure 1. Focus of the present article. Adapted from Bell and Figueiredo (2012).
Latecomer linkage capabilities 1543
Supporting
Investment Production
activities
Pre- Project Process Product Industrial Linkages
Lall investment execution engineering engineering engineering
(1992) Advanced … … … … … …
Intermediate … … … … … …
Basic … … … … … …
Advanced … … …
Focus of present paper
Intermediate … … …
Basic … … …
Figure 2. The focus of this article in relation to Lall’s (1992) framework for latecomer-capability building.
activities resulting from capability accumulation, such as changes in particular products or processes, and the firm’s
more general operational and business performance.
We conceptualize technological capability-building as a firm-specific process that is cumulative and path depend-
ent (Bell and Figueiredo, 2012). Furthermore, effective capability-building requires active management, as it typically
takes place over long periods of time, involves substantial effort and financial outlay, and entails considerable uncer-
tainty (ibid.).
We take our point of departure in Lall’s (1992) work and focus in on the kinds of capabilities that are required to
build effective linkages with external partners (Figure 2). Based on the insights from the literature on industrial mar-
keting and supply-chain management (see Section 2.2), we consider three categories of capability. The first is the
firm’s ability to envision opportunities for potentially fruitful collaborations. Second, we consider the firm’s ability
to engage with partners in types of organizational arrangements that are likely to support its ability to benefit from
the partnership by improving its existing stock of knowledge. Lastly, our framework considers the ability to exploit
linkages with external partners, that is, the latecomer’s ability to integrate externally accessed knowledge effectively
into its firm-internal stock of knowledge.
Sections 3.1-3.3 discuss these three capability categories in more detail. Table 1 offers a summary. For each cat-
egory, we first introduce key conceptual elements to consider and subsequently discuss different levels of advance-
ment, from the basic through the intermediate to the advanced level. It should be noted that these levels refer to
stages on a continuum of capability development. Our discussion of these stages is based on the so-called “revealed
capabilities” approach, which involves inferring a firm’s capabilities from information about its actions (Bell and
Figueiredo, 2012: 50). This is a commonly used approach in the latecomer capability literature because it is difficult
to measure directly the constituents of a firm’s technological capabilities, such as knowledge bases, skills, and
experience.
Furthermore, to offer some illustrative evidence for the mechanisms we propose in our framework, we draw on
prior empirical analyses (and some conceptual studies) of latecomer capability-building. For this, we have conducted
a comprehensive assessment of key studies in this field of research. Based on our review, we have compiled a large
number of excerpts, which we selectively draw on in the discussion of our framework below. The complete list of
quotes is included in an online appendix to the article.
Advanced Regular performance bench- Partnerships with a variety of Highly interactive mechanisms
marking compared to leading local and foreign firms, includ- for knowledge acquisition as
firms to identify opportunities ing global leaders part of outward-focused for-
for improvement Knowledge-intensive interorgani- eign direct investment
Multiple and variegated linkages zational forms, including out- Effective knowledge integration
to advanced partners in indus- ward foreign direct to combine and integrate
First, the latecomer firm needs to develop an awareness of its internal capability gaps (Arnold and Thuriaux,
1997; Rush et al., 2007). By gaps, we mean a distinct lack of specific sets of hardware, knowledge, skills, experience
and organizational systems that prevent the firm from conducting its production- and investment-related operations
at a high level of performance. Such gaps can stem from existing inadequacies with respect to the firm’s ongoing
operations, which is a key characteristic of the latecomer firm in the early stages of its development. Capability gaps
can also emerge because of changes in the external environment, for example, in customers’ needs, competitive pres-
sures, or policies and regulations. Once identified, such gaps need to be articulated in the form of precisely defined
technology and resource needs (Arnold and Thuriaux, 1997). These can act as focusing devices for the following
steps in order to identify and make use of external sources of knowledge.
Since the latecomer firm is characterized by an initial lack of internal capabilities, it needs to develop the ability to
identify resources that lie outside its organizational boundaries in order to address its internal shortages. This high-
lights a second important element of the firm’s ability to envision linkages: its ability to scan and monitor its external
environment (Arnold and Thuriaux, 1997). To do this effectively, the firm requires interfaces with the local environ-
ment, for example, with respect to relevant knowledge residing in local research institutions, developments in the
demands of local clients, the availability of local production inputs, or changes in local policies or regulations. It also
requires interfaces with the global environment, for instance, with respect to developments in global value chains or
Latecomer linkage capabilities 1545
science and technology. The ability of the firm to pick up on signals in these areas is likely to depend on its invest-
ments in social networking, for example, maintaining close links to clients and suppliers, participating in industry
associations, and attending industry fairs. It is also likely to depend on the amount of internal resources the firm allo-
cates to this task, for instance, by creating specialized organizational units that collect intelligence on trends in mar-
kets and technology (e.g., see Amsden and Hikino, 1994).
Once relevant external resources have been identified, the firm needs to develop strategies to make effective use of
them (Kiamehr et al., 2015; Kwak et al., 2018). We consider the ability to formulate such strategies to be a third
component of the latecomer’s ability to envision fruitful linkages. Such endeavors require the firm to align its overall
(. . .) in many cases SMEs work within a small economic ‘space’. This generally means working within a small geography, but it
can also mean a tight linkage to a particular industrial sector or to the supply-chain of one or a small number of large companies.
Lacking the resources to search widely for support and advice, SMEs tend in the first instance to work in interpersonal networks
defined at these geographic and sectoral levels.
Given their preoccupation with short-term, operational problems, latecomer firms at the basic stage of developing
their linkage capability usually pay limited attention to formulating strategies for long-term improvement. Generally,
firms at this level are primarily concerned with engaging in linkages for the acquisition of equipment and operational
know-how and do not focus on developing partnerships that could contribute to the building up of internal capabil-
ities for changing existing or developing new technology (Dantas, 2006). In cases where firms do formulate strategies
for longer-term improvements, these tend to lack focus and rigor and are often not followed up by appropriate meas-
ures for implementation (Scott-Kemmis and Chitravas, 2007).
Firms at the intermediate level of linkage capability development exhibit a higher level of awareness of opportuni-
ties for improvement from the external environment. They tend to establish some form of organizational unit that
collects information on developments in markets and technologies, for example, by liaising with existing and poten-
tial future clients, monitoring competitor activity, keeping abreast of developments in science and technology, etc.
(Kiamehr, 2012). Based on this, they develop strategies that are clearly focused on accessing external resources
through linkages, for instance, to build up internal stocks of design knowledge required for creative problem-solving
in production (Dantas, 2006). However, these firms still face a number of problems, for instance, with respect the
speed at which they are able to respond to such opportunities (Scott-Kemmis and Chitravas, 2007). In other cases,
firms face difficulties in translating the internal capability gaps they have identified into specific technological needs.
For example, Kiamehr et al. (2015: 1247) discusses the case of an Iranian energy infrastructure developer:
1546 T. Reinauer and U. E. Hansen
(. . .) in some cases Mapna was not able to identify the market needs well in advance, and even if it did, the firm had difficulties
in translating them to technological needs, illustrating a lack of dialog and misalignment between marketing and R&D. There
were even cases in which the firm had identified a market need, had figured out a competitive proposition to respond to it, but
the local engineers could not identify the advanced technologies needed. This was mostly a result of limited scope of technologic-
al networks of the firm, and the market and technology intelligence activities.
Firms at the advanced level of linkage capability-building have a high level of awareness of their internal capability
gaps and of foresight in addressing such gaps. While Mathews (2002b: 472) does not include the ability of latecomer
firms to envision opportunities for linkages in his “linkage-leverage-learning framework” (discussed in Section 2.1),
It is in recognizing its deficiencies that the LCF [latecomer firm] secures its first competitive advantage. It formulates a strategy
commensurate with its deficiencies and limitations. It harbors no illusions as to its own capabilities, and looks instead to the
wider world for sources of technology, knowledge and market access.
Such advanced latecomers tend to make use of a multitude of external linkages, often to leading firms in industrial-
ized economies. They use these linkages to benchmark their own performance, and thus to identify potential areas
for improvement. This allows them to formulate effective strategies aimed at building up their stocks of capability
for production- and investment-related activities. In the literature we reviewed, this idea is perhaps best captured in
Scott-Kemmis’s and Chitravas’s (2007: 90/92) study of the Thai automotive industry, where they describe the most
successful firms as follows:
(. . .) they actively sought information about their external environment, and they built relationships (often quite diverse relation-
ships) with customers, suppliers and particularly international firms, to learn about the industry, policy, and technology. (. . .)
These firms had an ability to nurture the long-term relationships with domestic and foreign partners (sometimes at a personal
level) to enable them to ‘keep the network alive’. They were able to leverage such relationship to quickly sense upcoming business
opportunities, and in turn, learn to formulate ambitious strategies. These relationships also enabled the firms to gauge their own
existing capabilities and learning needs and to assess ‘what should I learn next’.
These firms’ strategies tend to be focused, ambitious, and achievable (ibid.). Furthermore, latecomer firms at the
highest level of capability development view their linkages to external partners not only as a means of sourcing know-
ledge for internal capability-building, but also as a strategic asset of complementary capabilities that the firm can
draw on in its production and innovation activities (Dantas, 2006).
1 This is determined by the latecomer’s external interfaces and learning strategies and, as such, is closely related to the
issues we discussed previously (Section 3.1). We elaborate on this aspect here (Section 3.2), as it is intertwined with
other elements of engagement that we discuss below, including the nature of interorganizational arrangements that the
latecomer establishes with external partners and the divisions of labour these entail.
Latecomer linkage capabilities 1547
et al., 2013; Hansen and Lema, 2019). As in Section 3.1, this stock determines what the latecomer needs to learn
next and, therefore, what kind of resources it needs to look out for.
Once the latecomer has identified an organization with the relevant resources, it needs to decide on an appropri-
ate interorganizational form for the linkage. The nature of such organizational arrangements greatly affects the
opportunities for capability-building that become available (Hobday, 1995; Fu and Zhang, 2011; Lema and Lema,
2012). There are many different types of arrangement involving different degrees of cooperation and integration,
including arm’s-length trade, joint ventures, licensing agreements, R&D collaboration, and mergers and acquisitions.
Interorganizational knowledge transfer can also take place through less formal channels, which are often referred to
This suggest that key features of the knowledge systems of clusters include not just their internal mechanisms for circulating the
knowledge already available and for acquiring new knowledge from the experience of various kinds of ‘doing’. Possibly more im-
portant is their openness to knowledge flows from outside. A scattering of empirical materials about these external flows sug-
gests that relatively ‘closed’ knowledge systems may be associated with an inability to sustain competitiveness in the longer term.
Correspondingly, detailed empirical studies of latecomer capability-building that we reviewed find that firms which
lack the ability to draw on foreign sources of knowledge usually do not develop product- or process-related capability
stocks beyond those required for routine production activities (Plechero, 2012; Hansen and Ockwell, 2014).
Latecomer firms that have basic linkage capabilities and that do engage with foreign partners often do so through
international joint ventures that are principally aimed at generating local production capacity (Hansen and Lema,
2019). Such ventures typically do not contribute to the development of local innovation capability. This is especially
the case in partnerships where there is a substantial gap in capabilities between the latecomer and its foreign partner,
which can result in passive learning by the former (Nam, 2011). Regardless of the underlying type of organizational
arrangement, firms at the basic level of linkage capability-building primarily experience one-way knowledge flows of
resources, including hardware, codified knowledge, training, etc., aimed at developing a basic stock of production
and investment-related capabilities in the firm.
1548 T. Reinauer and U. E. Hansen
Firms at the intermediate stage of the linkage capability scale typically use linkages to external partners in order
to build internal capabilities for innovation. For this purpose, they engage in more knowledge-intensive interactions
with external partners, increasingly with advanced foreign partners. This also includes linkages to more knowledge-
intensive kinds of organization, such as public research centers or specialized consultants (Dantas, 2006; Hansen and
Lema, 2019). Furthermore, the predominant forms of organizational arrangements they engage in change compared
to the basic level. For example, detailed studies of the Chinese solar photovoltaic (Quitzow et al., 2017) and East
Asian electronics industries (Hobday, 1995) suggest that licenses from advanced foreign partners played a critical
role once local firms have surpassed their initial stages of development. Such licensing requires more sophisticated
Several forms of collaboration with various types of external sources of knowledge were used to obtain predominantly one-way
knowledge flows from partners such as S&T [science and technology] organisations, supply companies and other oil companies.
Petrobras made efforts to increase its participation in knowledge production in its knowledge networks, but the division of tasks
was still characterised mostly by asymmetric arrangements in which Petrobras learned from partners.
As discussed by Mathews (2002b), latecomer firms with advanced linkage capabilities are primarily focused on
engaging in partnerships with leading foreign firms. Firms at this level of development might still invest in linkages
with local organizations, including suppliers, clients, and local research institutes. However, they are characterized
by a high frequency of engagement with advanced foreign firms, including a large variety of organizational types
(Hansen and Lema, 2019). These partnerships are often based on forms of collaboration that involve high levels of
investment and effort on the part of the latecomer, such as overseas R&D programs and foreign acquisitions and
mergers (e.g., Athreye et al., 2014). These have been referred to as “unconventional” technology transfer channels by
Lema and Lema (2012) and are typically not only aimed at accessing advanced foreign knowledge but also function
as vehicles for the co-design of technology (Dantas, 2006; Athreye et al., 2014). Some latecomer firms engage in sub-
stantial creative activity in these types of arrangement. For example, in our literature review, we identified a study by
Lema et al. (2015: 1383) on partnerships between US American and Indian firms in the software industry, where the
authors report the following:
In the course of dealing with advanced problem solving, some Indian software suppliers (. . .) acquire capabilities for problem
framing (in technical fields) which some US lead firms are beginning to draw upon (. . .). Such independent suppliers as well as
some MNC [multinational corporation] subsidiaries undertake highly creative work and activities are no longer just predefined
by the buyer or the MNC headquarter.
Such outward-oriented, proactive organizational arrangements can enable advanced latecomer firms to engage in
learning that is difficult to achieve based on inward-focused, “conventional” types of collaboration with external
partners alone (Lema and Lema, 2012; Nam and Li, 2013).
clearest classification of learning mechanisms based on external resources, distinguishing between: various kinds of
classroom-based and on-the-job training; the acquisition of codified knowledge, in the form of ready-made design
specifications or as knowledge inputs to innovation processes (e.g., in the form of design software or patents); hiring
human capital; and establishing a presence in technologically advanced regions, usually clusters in industrialized
economies, to take advantage of knowledge spill-overs from leading firms. The organizational arrangement that the
latecomer establishes with the external partner places limits on the types of learning mechanisms that are feasible in a
particular context (Bell and Figueiredo, 2012; Lema and Lema, 2012). However, within these constraints the late-
comer firm can still decide on which learning mechanisms to pursue and how many resources to devote to these
DI was daring enough to sell a substantial part of its shares to FTNC [French Transnational Corporation] in return for just
FTNC’s expertise in yoghurt processing; unfortunately DI was not wise enough to make specific provisions in this agreement
about the necessity to ‘fuse’ this incoming knowledge with in-house skills and knowledge. As a result, the lactic culture offered
by FTNC could not be tailored to the specific needs of DI products, preventing the integration of relevant knowledge (. . .).
2 Tsekouras (2006) argues that, at the time of his study, Greece was an industrializing economy and that it is therefore ap-
propriate to apply the concept of latecomer capability-building to this context. In other words, the firms that Tsekouras
investigates in his study do not fall under the category of highly advanced firms that are typically the subject of studies
in the literature on strategic management (Dutrénit, 2004).
1550 T. Reinauer and U. E. Hansen
At the intermediate level of linkage capability-building, latecomer firms make use of mechanisms for knowledge
acquisition in a more purposive and structured manner. For example, Hansen and Ockwell (2014) study the
Malaysian biomass boiler industry and describe the case of a firm that managed to combine a variety of mechanisms
to develop its internal production-related capabilities:
(. . .) the licence partnership with Volund [a Danish company] enabled employees from Alpha to access a highly skilled pool of
expertise and learn about critical elements of advanced boiler designs, including vital calculation methods. This externally medi-
ated learning by interacting process occurred during on-site plant visits, overseas training, and through technical assistance. This
learning process was particularly intensive in the period after the second plant was constructed in 2004 when the management in
Similarly, Figueiredo’s (2000) comparative case study shows that the firm that engaged in more purposeful and varie-
gated learning mechanisms was more successful in building its capabilities for production and investment. This
included a variety of mechanisms for the intra-organizational circulation of knowledge in the form of internal semi-
nars, in-house training programs, etc. Kim (1998) also offers a comprehensive investigation of intra-organizational
mechanisms aimed at absorbing external knowledge in his study of Hyundai in South Korea. He explains that the
company’s knowledge-integration strategy involved multiple stages, including targeted preparation prior to know-
ledge acquisition, assimilation through learning-by-doing and using during and after knowledge acquisition, and in-
cremental improvements based on lessons learnt.
Firms at the advanced level of linkage capability-building engage in strategic efforts for targeted knowledge acqui-
sition. For example, Nam and Li (2013) discuss the case of the Shanghai Automotive Industry Corporation. While al-
ready operating at a relatively high level of competence, the firm realized the importance of augmenting its human
resource pool. It therefore decided to invest in an R&D-focused joint venture with a specialized consultancy firm
based in the UK, which allowed it to access the expertise of the British firm’s approximately 150 engineers. Learning
mechanisms that take place as part of such outward-focused interorganizational partnerships, or “unconventional”
technology-transfer channels, require substantial effort and resource investments from the latecomer firm (Lema and
Lema, 2012). However, as briefly mentioned in Section 3.2, in some cases they appear to be a necessary complement
to learning that can be facilitated through “conventional” types of organizational arrangement, as the latter might
limit the sorts of learning mechanisms that the latecomer can make use of. When it comes to integrating knowledge,
advanced firms are similarly strategic in using targeted learning efforts to internalize externally acquired knowledge.
Discussing the cases of internationally competitive firms in the East Asian electronics industry, Mathews (2002b)
encapsulates this idea when he says:
These [foreign] technologies are unlikely to be presented to the LCF in a discrete “chunk”; rather, they will have to be assembled
from a variety of existing sources. This was certainly the case with the semiconductor industry, where chip fabrication equipment
was progressively made available by commercial vendors through the 1980s, but Korean and Taiwanese firms had to be able to
“mix and match” in order to build competitive production systems (. . .).
Similarly, Tsekouras (2006) goes into some detail about the knowledge integration efforts of firms in the Greek food-
processing industry and highlights that the most successful firms were characterized by intensive efforts to leverage
externally accessed knowledge for product and process development.
4. Concluding discussion
In this article, we have put forward a framework conceptualizing the development of linkage capabilities in latecomer
firms. Our aim is to complement and add nuances to Lall’s (1992) original framework on technological capabilities.
As we explained in Section 1, Lall’s framework distinguishes different capability functions the latecomer needs to de-
velop in order to operate successfully in competitive markets. Most of these capability functions have been elaborated
in further detail individually in the literature, usually with a focus on particular industries. For example, this includes
studies going into significant detail about investment capabilities focused on project execution and pre- and post-pro-
ject activities (e.g., Amsden and Hikino, 1994; Kiamehr, 2012) and production capabilities in product, process, and
industrial engineering (e.g., Ariffin, 2000; Figueiredo, 2000; Hansen and Ockwell, 2014). In contrast, the existing lit-
erature on technological capability-building in latecomer firms has not addressed linkage capabilities or has simply
Latecomer linkage capabilities 1551
adopted Lall’s original conceptualization unchanged. For this reason, in this article, we have developed a conceptual
framework that improves understanding of the relevant elements of a firm’s ability to make effective use of external
resources through linkages.
At this point, we note that, in addition to Lall (1992), our work is inspired by Teece’s (2007, 1997) framework
for dynamic capabilities, which also differentiates three sub-capability types. This includes a firm’s ability to sense
opportunities and threats from changes in the environment, to seize opportunities, and to maintain its competitive-
ness by re-configuring and transforming its tangible and intangible assets. However, our framework differs from
Teece’s in important respects. First, Teece’s (2007, 1997) framework deals with a sort of “meta-competence” for
relevant linkages and to choose suitable organizational arrangements (Nam [2011] is an exception). Given the cur-
rent lack of a well-developed theoretical understanding that can answer questions about these issues, our framework
contributes to advancing the existing literature by considering the different types of capability that firms use to envi-
sion, engage in, and exploit linkages.
While conceptually distinguishable, the three elements of linkage capabilities that we describe in our framework
are likely to exhibit some interdependencies. For example, we expect a firm’s ability to envision fruitful linkages to
affect the kinds of interorganizational partnership forms that it is able to establish with other organizations. Indeed,
a firm that develops an ambitious and realistic learning strategy is likely to try and engage with partners in ways that
production and investment are likely to affect the various elements of its linkage capabilities, including its ability to
identify further useful linkages, to set up suitable forms of interaction with external resources, and to exploit these
resources. This two-way relationship has been studied in the case of production capabilities and learning mecha-
nisms, where the latter are mainly conceptualized as mechanisms for knowledge exploitation (Figueiredo et al.,
2013; Hansen and Lema, 2019). Our framework provides a conceptual starting point to think about interactions be-
tween linkage capabilities, defined more comprehensively than in the previous literature, and other kinds of
capabilities.
Finally, we highlight the need to consider how differences across industries affect the nature of the most relevant
Appendix
The online version of this article includes a table with quotes from the literature on microlevel latecomer capability-
building processes that serve to illustrate the different elements which we discuss in our analytical framework.
Acknowledgments
The authors would like to thank the editor and three anonymous reviewers for their comprehensive and insightful feedback on this
work.
Funding
This project received funding from the European Union’s Horizon 2020 Research and Innovation Programme under Marie
Skłodowska-Curie grant agreement No. 713683.
References
Abernathy, W. J. and J. M. Utterback (1988), ‘Innovation over time and in historical context,’ in M.L. Tushman and B. Moore (eds),
Readings in the Management of Innovation. Harper Collins Publishers, New York, pp. 25–36.
Amsden, A. H. (2001), The Rise of “the Rest”: Challenges to the West from Late-Industrializing Economies. Oxford University Press,
Oxford.
Amsden, A. H. and T. Hikino (1994), ‘Project execution capability, organizational know-how and conglomerate corporate growth in
late industrialization,’ Industrial and Corporate Change, 3(1), 111–147.
Ariffin, N. (2010), ‘Internationalisation of technological innovative capabilities: levels, types and speed (learning rates) in the electron-
ics industry in Malaysia,’ Technological Learning, Innovation, and Development, 3(4), 347–391.
Ariffin, N. (2000), ‘The internationalisation of innovative capabilities: the Malaysian electronics industry,’ doctoral thesis. University
of Sussex, UK.
1554 T. Reinauer and U. E. Hansen
Ariffin, N. and P. N. Figueiredo (2004), ‘Internationalization of innovative capabilities: counter-evidence from the electronics indus-
try in Malaysia and Brazil,’ Oxford Development Studies, 32(4), 559–583.
Arnold, E. and B. Thuriaux (1997), ‘Developing firms’ technological capabilities.’ Technopolis. Technopolis Report 43.
Athreye, S., A. Tuncay-Celikel and V. Ujjual (2014), ‘Internationalisation of R&D into emerging markets: fiat’s R&D in Brazil,
Turkey, and India,’ Long Range Planning, 47(1–2), 100–114.
Barney, J. (1991), ‘Firm resources and sustained competitive advantage,’ Journal of Management, 17(1), 99–120.
Bell, M. (1990), ‘Continuing industrialisation, climate change, and international technology transfer.’ University of Sussex, Brighton.
Bell, M. and M. Albu (1999), ‘Knowledge systems and technological dynamism in industrial clusters in developing countries,’ World
Development, 27(9), 1715–1734.
Hansen, U. E. and D. Ockwell (2014), ‘Learning and technological capability building in emerging economies: the case of the biomass
power equipment industry in Malaysia,’ Technovation, 34(10), 617–630.
Hobday, M. (1995), ‘East Asian latecomer firms learning the technology of electronics,’ World Development, 23(7), 1171–1193.
Hobday, M. (1998), ‘Product complexity, innovation, and industrial organisation,’ Research Policy, 26(6), 689–710.
Iammarino, S., R. Padilla-Pérez and N. von Tunzelmann (2008), ‘Technological capabilities and global-local interactions: the elec-
tronics industry in two Mexican regions,’ World Development, 36(10), 1980–2003.
Kiamehr, M. (2012), ‘The evolution of systems-integration capability in latecomer contexts: the case of Iran’s thermal and hydro
power generation systems,’ doctoral thesis. University of Brighton, UK.
Kiamehr, M. (2017), ‘Paths of technological capability building in complex capital goods: the case of hydro electricity generation sys-
Rush, H., J. Bessant and M. Hobday (2007), ‘Assessing the technological capabilities of firms: developing a policy tool,’ R&D
Management, 37(3), 221–236.
Scott-Kemmis, D. and C. Chitravas (2007), ‘Revisiting the learning and capability concepts: building learning systems in Thai auto
component firms,’ Asian Journal of Technology Innovation, 15(2), 67–100.
Teece, D. J. (2007), ‘Explicating dynamic capabilities: the nature and micro-foundations of (sustainable) enterprise performance,’
Strategic Management Journal, 28(13), 1319–1350.
Teece, D. J., G. Pisano and A. Shuen (1997), ‘Dynamic capabilities and strategic management,’ Strategic Management Journal, 18(7),
509–533.
Tsekouras, G. (2006), ‘Gaining competitive advantage through knowledge integration in a European industrialising economy,’