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