On the basis of the results gotten from existing researches on technological capabilities, especially for the firms in developing countries, this study develops a model to analyze the structure and mechanism of technological monitoring capabilities for the latecomer firms during catching-up process. The methodology adopted in this study is case study. A diversified Chinese firm is chosen to be the objective of this study, which is TX Co. The technological catch-up processes of the LED business of this firm are chosen to be the cases for study, since at this level the catch-up activities of this firm have been taken and the comparative materials are available. Based on the qualitative data that including observation record, interview text, internal and external documents and academic research papers, this study analyzes the technological monitoring capabilities of TX Co. and draws the conclusions as follows: (1) The technological capabilities of latecomer firms is constructed by technological scanning and choosing capability; (2) The technological scanning capability, which relies on the firms' technological information system, makes the latecomer firms search and analyze the technological development direction and latest research results; (3) The technological choosing capability, which relies on the firms' related technological base and is heavily affected by the entrepreneur's technological experiences, intuition and courage, makes the firms identify the future direction of the technological development; (4) Technological paradigm and trajectory are the important influencing factors for the latecomer firms' technological choosing.
