Abstract: Latecomer firms ultimately achieve technological catch-up thanks to the capability reconfiguration. However, the evolution mechanism of how latecomer firms carry out capability reconfiguration in the dynamic process of technological catch-up is still unclear. Through the case analysis of Shenglong, this study finds that market dynamics provides a window of opportunity for the technological catch-up of latecomer firms from the outside, and the dominant logic provides cognitive guidance for the technological catch-up of latecomer firms from the inside. In particular, in the initial catch-up stage where the market dynamics are low, latecomer firms adopt position logic to achieve capability evolution; in the beyond catch-up stage where the market dynamics are medium, latecomer firms adopt leverage logic to achieve capability transformation; and in the industry frontier stage where the market dynamics are high, latecomer firms adopt opportunity logic to achieve capability substitution. This research emphasizes the importance of market dynamics at different levels, introduces a perspective of dominant logic, and reveals the inherent laws of the evolutionary mechanism of capability reconfiguration. This research not only enriches the technology catch-up theory, but also provides management enlightenment for the catch-up practice of latecomer firms.

Key words: latecomer firms, technological catch-up, capability reconfiguration, market dynamics, dominant logic