Multinational Enterprises and the Geographical Clustering of Innovation

Abstract

Research on the geographic clustering of economic activity dates back to the early twentieth century. It is recognized that in spite of advances in transportation and communications, clustering remains most critical, and is consequently prevalent, in knowledge-intensive fields. Multinational enterprises (MNEs) that increasingly base their value creation and competitive advantage on knowledge-intensive activities are key participants in clusters, affecting both the nature and intertemporal evolution of local innovative activities. However, the role of MNEs in clusters remains under-researched. This paper traces the origins of research on geographic clusters, identifies the seminal contributions focusing on the role of MNEs, discusses potential problems inherent to this area of inquiry and develops an organizing framework for new research.

Scientists as Midwives to Cluster Emergence: An Institutional Work Framework

“…Overall, the limited participation of international food companies in the Finnish cluster may partly explain the modest success in the cluster building attempts (Mudambi and Swift, 2012).…”

Technological catch-up by component suppliers in the Pakistani automotive industry: A four-dimensional analysis

“…More specifically, in a spectrum of relational to transactional interaction between MNEs and local actors, the substance of many macro-level findings have focussed on the transactional end of the spectrum and the resources that form the content of such transactions (Mesquita, Anand, & Brush, 2008;Zhou & Xu, 2012). In comparison, the impact of micro-level relational proximity between co-located MNEs and EE firms on catch-up has received more limited attention (Lorenzen & Mudambi, 2013;Mudambi & Swift, 2012). McDermott and Corredoira (2010:309) for instance call for "greater focus on the types of inter-firm relationships that can facilitate or impede one's access to knowledge resources," and such impediment due to a lack of relational proximity would seem to include the extent to which knowledge is purposefully protected.…”

“…In this paper, we refer to catching-up as an LEE supplier's ability to bring improvements and efficiencies into its products and processes and thus move up the value chain. Such catch-up is underpinned by the capture or creation of new resources, knowledge, skills and competences (Lamin & Livanis, 2013;Malerba & Nelson, 2011;Mudambi & Swift, 2012). One important facilitator of acceleration in a catch-up process for EE firms is their interaction with co-located AE firms.…”

Location, collocation and innovation by multinational enterprises: a research agenda

“…Arrow (1962) pointed to the greater and more rapid diffusion of skills through 'learning-by-doing' as the labour market expands with more collocating firms, while Romer (1986) argued that technology spillovers that occur within industry clusters generate increasing returns which only accrue to collocating firms. All of these advantages derived by producers are nontraded positive externalities; in the economics and economic geography literatures they are clubbed together under the term Marshall-Arrow-Romer (MAR) externalities (Mudambi and Swift 2012). Porter (2003) added to this literature stream, arguing that low search costs imply that collocated firms have more to lose from falling behind their competitors.…”