External Ties and the Reduction of Knowledge Asymmetries among Clusters within Global Value Chains: The Case of the Ceramic Tile District of Castellon

Abstract

Classical industrial districts' literature is not focused on the role played by external ties but gives more importance to the local districts' endogenous development. Global value chains connect clusters to other external agents through external linkages and constitute a framework to analyse the complex inter-linkages between clusters and other external agents. In the field of the external ties and the global value chain approach Academia is primarily focused on the ties which link clusters in developing nations to global markets, although global value chains also consider connections between clusters in similar activities and even when both are located in developed nations. Thus, external linkages are mainly performed by multinational enterprise (MNE) affiliates which play fundamental role of knowledge diffusers and absorbers in the process of knowledge exchange throughout global value chains. The work examines the process of knowledge exchange between clusters through external ties using the global value chain approach. For this purpose, empirical work is conducted with 22 face-to-face interviews to provide a case study about a leading cluster in the global ceramic tile industry. Results show that the basic knowledge to successfully compete is locally originated, although it can be complemented with global knowledge learnt or generated in other territories. MNE affiliates bridge structural holes through external ties and reduce knowledge asymmetries within global value chains. External ties on network-based governance chains exist, matter and affect clusters allowing upgrading even between developed nations.