Business network strategies and performance of specialized, advanced, differentiated, and innovative (SADI) Chinese companies

Hidden champions are highly successful companies operating in niche markets, playing a key role in global supply chains. Recently, the Chinese government has launched a national strategy for selecting and supporting their own hidden champions, also called specialized, advanced, differentiated, and innovative (SADI) companies. Nonetheless, it is still unclear if these companies are different from non-Chinese hidden champions and whether their business strategies lead to different performance results. In this study, we investigate how SADI’s business networking strategy relates to their performance, using data from Orbis M&A and the list of hidden champions published by the Chinese Ministry of Industry and Information Technology. By mapping the business network, our results show that SADI companies that establish joint ventures with companies from the same industry experience a positive increase in their performance metrics, however unique to the Chinese context Chinese SADI companies do not benefit fully from formal international collaborations.