What makes export manufacturers pursue functional upgrading in an emerging market? A study of Chinese technology new ventures

This study examines unique factors causing emerging market firms to pursue functional upgrading. Our analysis draws on the resource-based view and learning theory, and our study sample consisted of Chinese new technology ventures. We test the effect of governance mechanisms and internal resources on the functional upgrading of firms. The results indicate that trade shows and quality advantage facilitated the functional upgrading of firms. However, contrary to our expectations, electronic markets and technological advancement do not emerge as significant variables. The implications of the results are discussed in consideration of the existing literature, and future research opportunities are described.