Although it has been noted that Japanese companies in the petrochemical industry have actively incorporated foreign technology, factor determining Japanese companies’ selection of their partners is rarely discussed. This paper examines the petrochemical industry and statistically verifies whether technological integration and the quality of technology are factors influencing the selection of licensing partners. The results show that the ease of technology integration is a factor in partner selection and that the partner’s level of technology in comparison to their own is also important.

Chinese companies have experienced rapid growth after entering the liquid-crystal display (LCD) television market. This paper first clarifies the factors that fostered the rapid growth of Chinese companies, which did not have much accumulation of technology, by examining LCD television architecture and specialization structures. Advances in semiconductor technology were the driver for LCD televisions, which became a classic modular-type product. Although enabling new competitors to enter the market, modularization facilitated the entry of excessive numbers of companies and fierce price competition. Due to such market characteristics, Chinese companies fell prone to “cycles of decreasing returns from modular-type products” by repeated declines in profitability and entry into new product areas. The current state of Chinese companies is examined, along with their aim to extract themselves from the aforementioned cycle while still utilizing modularization.