Industrial dynamics beyond the lead firms: Evidence from the wind energy industry in China

Since the turn of the millennium, China has developed into a core location for the wind energy industry and is today the largest market for wind turbines. These developments have caught attention among scholars. However, most research is on the development of the market and the lead firm strategies for market access or on innovation, capability building and technology transfer in the industry. The main objective of this paper is to look ‘beyond the lead firms’. We seek to advance the understanding of how the recent changes in the industry affect producers of key components and their role in the industry. The paper employs a qualitative methodology, which draws on explorative case studies of sub-suppliers in the wind turbine industry in China. A special empirical focus is on the first tier sub-suppliers. As the Western lead firms establish themselves in China, the sub-suppliers also have to develop new strategies, which involve internationalization. Our initial findings suggest that sub-suppliers get an initial impetus for internationalization from the lead firms. However, over time the sub-suppliers strategy changes as get more independent and driven by new business opportunities in China and link up with domestic lead firms. In pursuing the principal objectives of the paper, we combine two analytical frameworks for the outside-in perspectives of economic geography with the more inside-out perspective from international business and organizational studies. On the one hand, this combination allows for a better understanding of the changing geography of suppliers and their role as technology leaders. On the other hand, we can elucidate the challenges faced by the supplier firms who are not experienced in internationalizing activities but for whom such internationalization is a determining factor for competitiveness.