Abstract
In this dissertation, I studied how emerging economy enterprises upgrade capabilities to lessen their competitive gaps in comparison with global industry leaders. By extending organizational learning theory, I theorized capability upgrading as a distinctive learning process including directional, temporal, and locational dimensions. In Essay One, I provided an overarching theoretical framework with testable propositions to explain how firms upgrade capabilities through a combination of four-I upgrading mechanisms. I then discussed the influences of emerging economy specific contingencies and dynamics in the process. In Essay Two and Essay Three, I extended and tested part of the framework developed in Essay One. Specifically, in Essay Two, I proposed a behavioral learning model to explain how upgrading directions (i.e., capability-deepening and capability-broadening) are determined by different knowledge gap filling needs and mediated by a distinctive learning mechanism (i.e., international benchmarking). The findings from a sample of 278 Chinese manufacturing firms supported related hypotheses. In Essay Three, I proposed an institutional ambidexterity learning model to explain how upgrading speed is affected by the dual effects (i.e., facilitating and hindering) of institutional change in emerging economies. I further explained how firms manage such dual effects by developing institutional ambidexterity capabilities. The findings from a sample of 674 large firms from 25 countries supported related hypotheses.