Eric Thun is the Peter Moores Associate Professor in Chinese Business Studies at Saїd Business School and a Fellow of Brasenose College. His primary areas of expertise are business in China and international business. His research focuses on the dynamics of competition in emerging markets. In his current research, Eric analyses how a profound shift in the geography of consumption creates both challenges and opportunities for firms. Emerging markets are the fastest growing markets in the world, but the price constraints of consumers and institutional differences within these markets demand new forms of innovation, design, purchasing, and organisation. The future success of firms, and the economies in which they are based, depends on their ability to meet these new challenges.
Eric uses an innovative combination of macro and micro industrial data to assess the strength of firm capabilities in different sectors and to explain why in some sectors Chinese firms are able quickly to challenge foreign firms but in others they are not. The research analyses how the technological characteristics of a sector, market demand, and government policy shape outcomes. Over the last five years, the sectors he has analysed include autos, construction equipment, machine tools, motorcycles, and telecom. In each sector, aggregate statistics are supplemented with extensive firm-level field research in China.
In his early work he analysed how the institutional environment and government policy shaped the development of firm capabilities in the Chinese automotive industry. He published a major book on this subject in 2006, Changing Lanes in China: Foreign Direct Investment, Local Governments and Auto Sector Development and revisited the subject in a 2011 article in the Journal of International Business Studies.
He has also worked extensively on multinational strategies in China, the globalisation strategies of Chinese firms, and China’s integration into global production networks.
Eric received his BA from Princeton University in 1990 and his doctorate from Harvard University in 1999. After a year as a postdoctoral fellow at the MIT Industrial Performance Center, he returned to Princeton as Assistant Professor in the Woodrow Wilson School and Department of Politics. He joined Saїd Business School in 2005.
Areas of expertise include:
Eric's research is concerned with issues of industrial development in China. In his research, Eric seeks to understand the variation in outcomes in Chinese industry: why in some sectors Chinese firms are able quickly to challenge foreign firms but in others they are not.
In his current project (in collaboration with Loren Brandt), he combines disciplinary approaches to develop a framework that integrates a supply- and demand-side perspective on upgrading and innovation in China. The creation of technical capabilities within mature industries in a “late” developing economy involves a series of incremental steps, and firms must be both pulled by market demand to make the progression up each successive step of the development ladder and pushed by the availability of the skills and knowledge required to make these steps. On the demand side, firms need information on the attributes that higher-end user’s value, as well as the markets in which to sell these goods. A progression of more sophisticated market segments provide the financial returns that justify the investments that upgrading requires. On the supply side, there need to be channels through which firms are able to acquire the information they need to technically upgrade. Knowledge and technology from domestic sources (e.g. domestic firms, research institutes, and universities) is critical, as is knowledge and technology from foreign sources (e.g. imports, foreign firms producing domestically, and foreign markets). In short, the progression of market segments within the domestic marketplace serve as rungs on the development ladder, and missing rungs at any point can impede the development process. To illustrate this argument Eric and Loren Brandt four industrial sectors in China: automobiles, construction equipment, motorcycles, and telecom equipment.
As part of the effort to understand capability building in Chinese industry, Eric conducted a four year field study that analysed the outcome of China's admission to the World Trade Organisation (WTO) across Chinese industry with his collaborator. The study, in collaboration with Loren Brandt (and economist at the University of Toronto) combined aggregate data with hundreds of firm-level interviews in multiple sectors.
Although it was commonly believed that the lowering of trade barriers would create an advantage for foreign firms in China, Eric and Loren found that this was not the case. The reason for this unanticipated outcome was the dramatic growth in the domestic market that followed WTO accession and how the shift in end markets changed the balance-of-power between foreign and domestic firms.
The study documents how competition for the middle segments of this market led to capability building in Chinese industry, as foreign firms localised activities in order to lower their cost structures and Chinese firms upgraded their capabilities in order to escape the intense competition in low-end segments. The extensive field research revealed that capability-building in China is often deep in the supply chain, and involves a complex mix of competition and cooperation between Chinese and foreign firms.
In his earlier work, Eric focused on how institutions shaped development outcomes in China. He did this from both a regional perspective, analysing how the micro-processes of political and economic relations within a region shaped auto sector development in China, and over time. One of the dominant characteristics of an emerging market is the rapid rate of change: the needs of an industrial sector evolve rapidly as the firms within it develop, but the supporting regional institutional frameworks change slowly. Institutional arrangements that effectively promote growth at one stage of development may become a hindrance at a later stage. Eric’s research sought to create a dynamic understanding of the “fit” between local institutions and the needs of firms (both indigenous and foreign) within an industrial sector.
Much of Eric’s research is based upon empirical work in China, including in-depth interviews with individuals within Chinese companies at a range of levels, and also with local and national government officials in China. His skills in speaking Mandarin Chinese allow him to engage with individuals at all levels. He has consulted for Western firms that are seeking to enter the Chinese market.
Besides engaging with business executives and policy-makers in China, Eric has spoken on his research at the British Foreign & Commonwealth Office and contributed to European Commission reports on the trade implications of industrial development in China.
Eric is a co-organiser of a research network on global value chains at the Society for Advancement of Socio Economics (SASE). Founded in 1989 SASE is an international, inter-disciplinary organisation with members in over 50 countries on five continents. Eric's global value chains network brings social scientists interested in analysing the causes and consequences of the offshoring-outsourcing phenomenon and the development of global value chains.
In 2011-2012, Eric held a Leverhulme Research Grant.
Eric teaches on a number of programmes at Saїd Business School. This includes the Global Strategy core elective and Business in China elective on the MBA and Executive MBA programmes. He also teaches on the School's executive education programmes: the Oxford Diploma in Strategy and Innovation, and the Diploma in Global Business.
In addition to teaching in Oxford, Eric is responsible for the creation and delivery of Saїd Business School's first international module which is held in China. The Executive MBA class visit China with Eric to combine classroom instruction with company visits, allowing the students to experience first-hand the challenges and rewards of operating in an emerging market. The trip is one of the most popular elements of the EMBA programme.
Saïd Business School
University of Oxford
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