Understanding MNEs׳ decline in the adoption of locally developed technology standard in China: A positioning and cognitive perspective

• Asian countries such as Korea and China are becoming more and more active in participating technology standard development.
• An under-researched area is the impact of the development of home grown technology standards from Asian countries on MNEs.
• With the official adoption of TD-SCDMA in 2009, MNEs market share declined significantly.
• MNEs have to re-conceptualize and re-position themselves when host countries are able to develop technology standards.

Asian countries are becoming more and more active in participating technology standard development. In this paper we study the impact of this change on multinational enterprises (MNEs) using the case of TD-SCDMA, an international technology standard of 3G mobile communications. During the development of this technology standard, MNEs׳ market share dropped dramatically. A major contribution of this study is analyzing the underlying mechanism governing MNEs׳ interpreting TD-SCDMA as a threat rather than an opportunity by integrating two streams of literature. We also discuss the possible strategies for MNEs to maintain their market leadership position when local firms are able to lead international technology standard development.