Capabilities of Suppliers of Complex Capital Goods in Developing Economies

Complex capital goods such as electricity power plants, locomotives and airplanes constitute the important infrastructural elements of modern economies. Although these goods originated from the developed world, some developing countries have recently entered into design and produc-tion of them as well. For instance, the evidence indicates a level of success in Iran’s electricity, transportation and aerospace sectors. However, important questions from a policy perspective remain to be answered for which we need to extend our understanding of the nature of these ca-pabilities. This paper takes a first step and proposes a conceptual framework for the study of ca-pabilities of suppliers of these goods from developing economies. The paper critically reviews two bodies of the literature, namely innovation in complex capital goods and latecomer firm theories, and borrows elements from each to construct the framework. This framework can be used in future empirical research on the subject.