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Forced Technology Transfer (FTT) in China: The Experience of New Zealand Firms

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Dissertation(1.66 MB)

Date

2022

Authors

Supervisor

Hikmet, Taghreed
Enderwick, Peter

Item type

Dissertation

Degree name

Master of Business

Journal Title

Journal ISSN

Volume Title

Publisher

Auckland University of Technology

Abstract

Forced Technology Transfer (FTT) has been identified as a significant contemporary issue in international business by scholars and foreign firms doing business in China. The past literature on the topic suggested that the FTT phenomenon is under-researched due to its comparative novelty, and it requires in-depth analysis, specifically in individual country contexts. Therefore, this research aimed to fill the said research gap by studying the nature of the FTT experience of New Zealand (NZ) technology firms doing business in China. This study is based on the philosophical foundation of relativist ontology, subjective epistemology and interpretivism paradigm. The study followed the qualitative research methodology and semi-structured interviews to collect data. The research was conducted in Auckland, New Zealand and the researcher interviewed four NZ technology firms that have been manufacturing in China for more than two years. The collected data from interviews were analysed using the thematic analysis technique. The findings of the research suggested that having China as a manufacturer is highly important to the participant NZ firms due to varied reasons such as the high level of technical skills of the Chinese manufacturers, robust-loyal business relationship with Chinese partners, and high reliance on China in terms of manufacturing etc. The findings also suggested that NZ technology firms are not likely to experience FTT in China due to possible reasons such as the unwillingness to disclose such experience, lack of knowledge of FTT practices and policies prevalent in China, lack of leading edginess of participants’ technologies, lack of communication with NZ and Chinese Government institutions, and less information received from peer businesses about FTT experience. The results of this research further indicate that there is a link between the mode of doing business in China and the FTT experience. While it appeared that having a wholly owned subsidiary in China may act as a protective mechanism for NZ technology firms to defend themselves from possible FTT pressure, contract manufacturing seemed to expose the participant firms to possible FTT risks, technology blending and leakage, and even reverse technology transfer situations. The study also found varied external and internal strategies implemented by NZ technology firms to protect their proprietary technologies in a possible FTT environment. The study also found that the above findings could impact the variations of transaction costs of NZ technology firms to varying degrees. According to the author’s knowledge, this could be the first study that investigated the FTT phenomenon in the NZ context. It adds significant new knowledge to international business and other disciplines, industry leaders, firms seeking to internationalise to China, the wider research community, policymakers, and the public.

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Keywords

Forced Technology Transfer in China; Technological knowledge; New Zealand technology firms; Intellectual property; Proprietary technology

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Permanent link

https://hdl.handle.net/10292/15536

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Masters Dissertations