This study defines inventions traditionally regarded as mere fruits of R&D as “internal inventions," and inventions resulting from other factors collectively as “non-internal inventions." The objective is to show that firms make inventions not only on technological factors. Also, a rough analysis method is proposed to identify how many non-internal inventions are filed for patents, and the case study clarifies the promoting factors. This study aims to demonstrate that the perspective of licensing business, completely distinct from science and technology, is also an adequate explanation of firms' behavior in relation to inventions and patent filing.
Since 1955, when new China began to reconstruct its automotive industry, and for a long time after, Chinese car exports consisted mainly of commercial automobile products (chassis and finished vehicles, etc.) which were exported in small quantities by state-owned manufacturers. Since 2000, however, with the emergence of independent automobile manufacturers, the number of vehicles exported has increased rapidly, and the makeup of exports has shifted gradually from a focus on commercial vehicles to a focus on passenger vehicles. With regard to overseas expansion, manufacturers' market access strategy has led to the rapid transition from parts trade to local knock-down manufacturing. However, despite the rapid progress of foreign expansion, problems have arisen due to insufficient risk management know-how with regard to foreign expansion on the part of independent Chinese manufacturers, and the fact that their experience acquired from domestic markets is not applicable to overseas markets. For these reasons, following a period of prosperous overseas expansion, some Chinese automobile manufacturers have been forced to withdraw from one market or have chosen to switch to another market. This entire process, from rapid prosperity to quick decline in Chinese automobile exports, is dramatically observed in the case of their overseas operations in the Russian market. This paper, then, focuses on the burst of growth in Chinese automobile exports around the year 2000, taking the Russian market (the most significant case with regard to the characteristics mentioned above) as a case study to analyse both the domestic and external reasons for this surge, and to investigate the mistakes in manufacturers' overseas expansion strategies which led Chinese automobile exports from rapid prosperity to quick decline.
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