Key determinants for successful inter-firm collaboration in China
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Inter-firm collaboration has become increasingly important in the global economy. Firms increasingly rely on collaborations to access new resources, new technology, skills, the latest market information, new markets and knowledge, and also to increase innovation, reduce costs and remain competitive in domestic and international markets. The motivation of this paper is to analyze the importance of collaboration as a business competitiveness strategy and to identity key factors enhancing its likelihood of success in the Chinese market for both domestic and foreign owned firms operating in China. This study will shed light on how collaboration can be used by foreign firms or Chinese firms to increase their likelihood of success and the factors most likely to lead to success. Firms operating in the telecommunications and related industries are the focus of this study, as this sector is a good microcosm of the overall Chinese economy due to the rapidly changing and dynamic nature of this sector. Our results show that firm size, trust and quality of communication play a significant role in the success of Chinese business collaborations. Bigger firms in China tend to have more successful collaborations in China, but this result does not hold for foreign firms in China. To collaborate successfully with Chinese firms, foreign firms also need to learn and adopt the different communication platforms in China and understand the different needs from different sized partners in China.