From followers to leaders: A four-stage process model of EMNE capability development

We advance the springboard perspective by investigating how emerging-market multinational enterprises (EMNEs) evolve into global leaders, uncovering the specific mechanisms for capability development in the post-springboarding phase. We propose a four-stage process model that delineates the transformation of EMNEs, in response to technological paradigm shifts and business opportunities, from followers to leaders: (1) capability acquisition via springboarding from international value-chain partners, (2) capability scaling via co-exploitation with domestic value-chain partners, (3) capability creation via co-exploration with domestic value-chain partners, and (4) capability diffusion via reverse knowledge transfer to international value-chain partners. Using the transition of the automotive supply sector in China from internal combustion engines (ICE) to electric vehicles (EV) as an exemplary case, we illustrate how EMNEs can evolve from learning extant knowledge from, and to contributing new knowledge to, advanced-market multinational enterprises (AMNEs). Our model extends the springboard perspective by detailing the rarely-explored post-springboarding phase, particularly in the context of contemporary geopolitical tensions. More broadly, we contribute to a deeper understanding of the action-based view of dynamic capabilities in international business by specifying the entrepreneurial actions that make EMNE capability development and transformation possible.