The Role of Imitation in Technological Learning and Catch-up: Evidence from the Indian Automobile Industry

Abstract

The role of innovation in firm catch-up and subsequent dethronement of the leader is well established in the extant literature. However, what appears to be less understood is the role of imitation in firm catch-up and industry evolution. This thesis argues that a thorough understanding of the dynamics of the catch-up process requires a comprehensive scholarship of both innovation and imitation, as firms have been observed to employ both innovation and imitation strategies in their persistent effort to catch-up. Drawing on the prior research on window of opportunity suggesting that institutional, technological, and demand dimensions of the sectoral system present a diverse set of opportunities for firms to catch-up, and using it as a context, this thesis examines firms' catch-up strategies vis-a-vis innovation and imitation in the light of competitive dynamics and institutional theories. The thesis utilised an extensive dataset of car models, which includes information on product-related attributes, and various firm and industry level variables, launched in the Indian automobile industry during 1999-2018 to empirically investigate the role of competitive imitation in firm catch-up. It is comprised of three research papers and concludes that firms, with or without strong innovation capabilities while exploiting different windows of opportunity, use competitive imitation to catch-up. While the use of imitation by firms in catch-up endeavours results in significant performance benefits, whether a firm will engage in innovation or imitation is influenced by firm-level technical capabilities and the competitive and regulatory environment. The first paper analysed firms' strategic responses to the successive changes in the emission control regulations (i.e., BS I to BS IV during 1999-2018) and found that firms utilised imitation, innovation, or innovative imitation but the choice was moderated by firm innovation capabilities and industry clockspeed. The second paper analysed the competitive strategies of the dominant and the fringe firms and found that foreign fringe firms used innovation while the domestic fringe firms used imitation to catch-up. However, contrary to our assumption, domestic firms not only imitated the dominant firm's product innovations but also showed a tendency to imitate other innovative foreign rivals. The third paper examined the effectiveness of market leader's product proliferation strategy in preventing rivals' catch-up through imitation and found that, contrary to what is theorised in extant research, in a competitive action-reaction context, market followers will not desist from imitation, but instead imitate the market leader to avoid falling behind in an evolving market.

Date of Award	1 Aug 2023
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Silvia Massini (Supervisor) & Joseph Lampel (Supervisor)