Local knowledge domains and the role of MNE affiliates in bridging and complementing a cluster's knowledge

Abstract

Multinational enterprises (MNEs) can play the role of extracting, diffusing and bringing knowledge through external linkages. The classical literature of industrial districts has not focused on these external ties, although occasionally they have been mentioned when trying to avoid lock-in and entropic inertia. This work focuses on this gap and examines the process of knowledge exchange between clusters through MNE affiliates which operate in all of them. Empirical work is conducted with interviews to clustered indigenous firms with affiliates operating in other clusters and affiliates belonging to MNEs which are independent of other clusters, all of them in the ceramic tile industry. The results show that the knowledge created in the collective learning process is local-scaled and is created from interaction between local SMEs and indigenous and foreign MNEs. The knowledge created in other clusters is introduced through foreign MNE affiliates complementing the local one. The results, interpreted within and limited to this context, can also provide insight into policy-making. Within global industries, polycentric networks from different clusters are open entities formed by local SMEs and connected and linked with foreign and indigenous MNE affiliates which sustain the channels that allow knowledge to be transferred from a local to a global scale.