This paper addresses the puzzle of how Chinese small and medium-sized enterprises (SMEs) in the mobile handset industry overcome an environment of “structured uncertainty” and innovate. We find that a combination of the global fragmentation of production and a tacit alliance between local...

This paper explains why many small and medium-sized private high-technology Chinese manufacturing firms survive and thrive within an institutional and political system arrayed against them. We use the mobile phone handset industry as an illustrative case of the vitality and capabilities of...