Unraveling the Mechanisms of Strategic Adaptation: A Longitudinal Study of Chinese High-Tech Firms 2000- 2003

Placed in the context of China’s transitional economy, this paper studies the role of different economic, institutional and managerial factors in accelerating or hindering hightechnology firms’ pace of strategic adaptation toward a higher level of technology orientation. Drawing on a unique longitudinal data of firms in the Zhongguancun Science Park (China’s Silicon Valley) from 2000 to 2003, we find that (1) complementary assets facilitate strategic adaptation; (2) firms open to global influence exhibit higher rates of strategic adaptation; (3) managerial background matter: there is a negative effect of CEO tenure and a positive effect of the CEO’s educational level on adaptation. Overall, this study extends the strategy literature on firm-level adaptation to the context of transitional economies and thus contributes to our understanding of strategic adaptation in the midst of a gradual, continuous and large-scale environmental change.