Cross-Regional Corporations and Learning Effects in a Local Telecommunications Industry Cluster of China

Abstract

External knowledge is crucial to cluster development. In an industrial cluster of a late-comer country, cluster networks are established based on the outsourcing relationship within the companies of advanced countries. However, it is an issue which is worth exploring whether the industrial clusters of late-comer countries can only rely on the advanced companies in acquisition of external knowledge. By adopting the case of Zhangjiang industrial cluster, this article has two objectives. Firstly, this study tries to understand where the knowledge source of companies comes from. Secondly, this research attempts to understand why this phenomenon exists through the examination of the development of integrated circuit industries for mobile phones. The results indicate that the telecommunications industry is related to national security and engenders enormous economic interests, and that local companies cooperate with each other. In addition, the government encourages the cooperation between local upstream and downstream companies to eliminate the constraints imposed by advanced companies. This cross-regional collaboration relies on the interactions among firms at a national level and the strong demand of the domestic market, which provides local companies with the opportunities to improve innovation capacities and techniques, thereby contributing to cluster development.