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This study examines why compact organizational space may matter for technological catch-up, through a comparison of China's leading automotive groups. The comparative analysis demonstrates that the Shanghai Automotive Industry Corporation (SAIC) surpasses its two local rivals in terms of technological capabilities partly because the firm has managed its organizational space in close connection with intensive growth strategies at the group level. SAIC has greatly benefited from compact organizational space in building technological capabilities, as it encourages the mobilization and integration of internal resources and promotes group-wide synergy for an effective internalization of acquired assets.
