Global and local governance, industrial and geographical dynamics: A tale of two clusters

Abstract

This article closely examines two industrial clusters in China, and compares the various adaptations these two clusters have undergone, as well as the mechanisms underlying the industrial and geographical dynamics within these two clusters. Specifically, based on recent field investigation and in-depth interviews during 2011–2014, we examine two types of local governance, and pay attention to the articulation between “governance within global value chains” and “governance within local clusters,” and to how global and local governance co-shape the ways in which and the extents to which local firms participate in the global economy, producing diverse geographies of production and generating diverse trajectories of regional development. The article concludes that local and global governance co-determine domestic firms’ upgrading sources, the strength of their local embeddedness, and the ways in which they conduct spatial and organizational restructuring, such as factory consolidation, factory closure, industrial upgrading, and geographical relocation.