| Author: | Shan, Xueshu |
| Title: | Corporate strategies during technological transition in China’s automobile industry : an empirical study from a multi-level perspective |
| Advisors: | Lai, Kee-hung (LMS) |
| Degree: | Ph.D. |
| Year: | 2025 |
| Department: | Department of Logistics and Maritime Studies |
| Pages: | xvi, 192 pages : color illustrations |
| Language: | English |
| Abstract: | As the world’s largest automotive market, China is undergoing a significant technological transition from traditional internal combustion engine vehicles (ICEVs) to electric vehicles (EVs). Such technological transition can fundamentally reshape the automotive industry, alter market dynamics, and transform competitive landscapes. To navigate this evolving environment, firms must adopt adaptive strategies that align with changing market demands and technological advancements. For corporate managers, understanding the key factors influencing strategic decision-making and identifying effective approaches is crucial for sustaining competitiveness and ensuring long-term success during technological transitions. Moreover, technological transitions are inherently complex, involving multiple interconnected levels of evolution. Therefore, the analysis of corporate strategies in this context provides valuable research insights into corporate behaviors in uncertain and complex environments. Thus, drawing upon the multi-level perspective (MLP), we conduct three interconnected studies to examine corporate strategies shaped by key factors at the niche, regime, and landscape levels, within the context of the technological transition from ICEVs to EVs in China’s automotive industry. Study 1 focuses on product technical specification design strategies regarding EV driving range at the niche level. At this level, developing appropriate designs for product technical specifications that effectively address uncertain customer preferences represents the most significant challenge for companies. Using a data set of 393 EV models in 49 Chinese first- and second-tier cities across 28 quarters from 2017 to 2023, we employ a structural model to estimate demand patterns for EVs with varying levels of driving range. Moreover, we collect charging pile density and other market-level data to examine how market elasticities for EV driving range vary across different market conditions. Our results show that the average driving range elasticity of EVs is 1.441, implying that a 1% increase in the driving range of EVs would lead to approximately a 1.441% increase in demand. Besides, we also find that there exists a complementary relationship between EV driving range and market charging pile density in influencing customer demand for EVs. We further discover that such complementarity might be attributed to the sales distribution by vehicle class of EVs in markets with varying levels of charging pile density. In low charging pile density markets, customers are more likely to purchase subcompact and compact EVs that are better suited for fixed routes and short-distance travel where a smaller driving range is sufficient. However, in high charging pile density markets, the availability of charging infrastructure enables customers to choose medium- and large-sized EVs for long-distance travel and extended commutes where a larger driving range is needed. Study 2 investigates corporate strategies for participating in emerging technology standardization at the regime level, where path dependence significantly shapes how firms navigate trade-offs between incumbent technologies and emerging alternatives. Adopting a dynamic perspective, we specifically examine how firms’ prior participation in incumbent technology standardization affects their subsequent participation in emerging technology standardization, as well as how such impact varies with the level of technological diversification in incumbent technology standardization activities. Using a longitudinal dataset of 217 automotive manufacturers and 466 technology standards in China from 2000 to 2023, our survival analysis reveals that firms with greater participation in incumbent technology standardization are more likely to engage in emerging technology standardization. However, a firm’s degree of technological diversification in incumbent technology standardization can create inertia, diminishing the positive effect of prior participation in incumbent technology standardization on emerging technology standardization. Study 3 examines how market-based deployment policies at the landscape level shape automakers’ technology choice and production strategies. At this level, institutional forces are crucial, requiring firms to develop technologies that align with both market demand and regulatory compliance. Specifically, this study examines China’s dual-credit policy, a policy designed to promote EV adoption while enhancing fuel efficiency in ICEVs. A key feature of this policy is its credit trading system, which allows firms with surplus credits to sell them to those with deficits, creating a flexible, market-driven approach to compliance. Using a dataset of 15,927 observations covering 906 ICEV models from 2017 to 2018, this study employs a quasi-experimental difference-in-discontinuities (DiDC) design to establish the causal relationship between the implementation of the dual-credit policy and the production volume of ICEVs that exceed fuel consumption standards. Additionally, we investigate how automakers’ non-compliance level in both the product market and the credit market moderate this effect. Our findings suggest that the implementation of the dual-credit policy contributes to an increase in the production of excessive fuel consumption ICEVs. Moreover, we find that the strong corporate non-compliance level in both the product market and the credit market of automakers further intensifies this effect. This thesis contributes to the literature on corporate strategies during the transition from ICEVs to EVs in the automotive industry in the following aspects. First, at the niche level, we develop an improved and more reliable method for estimating consumer preferences in design of EV driving range during the technological transition. More importantly, the findings highlight the importance of adopting an ecosystem perspective in the design process, revealing a complementary relationship between charging pile density and EV driving range in shaping consumer preferences. Second, at the regime level, we contribute to the literature on firm participating in technology standardization by shedding light on decision dynamics in the context of technological transitions. We also find a potential downside of diversification that firms deeply engaged in multiple domains within the old technology trajectory may develop inertia. Third, at the landscape level, our study is the first to provide empirical evidence on the unintended consequences resulting from the flexibility embedded in a specific market-based deployment policy (i.e., China’s dual-credit policy). Furthermore, the analysis reveals significant firm-level heterogeneity in how such policies influence firms’ technological choices and production decisions. |
| Rights: | All rights reserved |
| Access: | open access |
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