This research uses a multi-case analysis approach to study China's catching-up as a late-industrialized economy in the information and communications technology (ICT) industries. The significant contributions of this study are: the staged catching-up theory framework, the findings from the cases, and the policy implications. This study contributes to the late-industrialization literature by filling its theoretical gap--how domestic firms can catch up when there is strong MNC presence and what is the role of innovation capability. I develop a staged catching-up theory that can be used as a framework to analyze the successful catching-up process of domestic firms in a late industrialized economy while facing strong MNC presence. The theory describes the behavior of domestic firms, the behavior of MNCs, and the role of government, as well as the spatial implications of each stage. The case studies prove that Chinese domestic firms in the information industries have followed a path of catching-up that can be described by the staged catching-up theory, and innovation capability and self-developed technologies were the ultimate driving force that has enabled leading domestic firms to catch up with the MNCs in the telecom-equipment and PC manufacturing industries. This research validates that government involvement has rewarded the companies' efforts in building innovation capability and developing proprietary technologies. This research has implications for how China can catch up, especially through developing domestic firms' innovation capabilities, in high-tech manufacturing areas despite the strong presence of MNCs.
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