Cassandra C. Wang

Industrial Clustering and Technological Innovation in China: New Evidence from the ICT Industry in Shenzhen

The relationship between industrial clustering and technological innovation has been a subject of intense enquiry and heated debate. We examine the actual pattern of industrial clustering and technological innovation in China, focusing on the information and communication technology (ICT) industry. With our systematic analysis of the data gathered at the national level we found no significant relationship between spatial agglomeration and economic performance. Our questionnaire survey and personal interviews conducted in Shenzhen—Chinas leading special economic zone—revealed a peculiar pattern consistent with that at the national level. Although there existed frequent and intensive production linkages among firms in the Shenzhen ICT industrial cluster, the innovative performance of these firms has been rather poor. Most of the ICT manufacturing firms obtained their core technology through internal research and development (R & D) activities rather than through technology transfer or knowledge spillover. There is a lack of interest among firms to seek cooperation and communication based on knowledge, technology, or R & D activities with other firms in the same cluster. The peculiar pattern of clustering and innovation in China suggests that technological innovation may have a divergent regional trajectory more sophisticated than that which has been described in the existing theory of industrial clusters. The study closes with a plea to go beyond a relational turn in economic geography and to take more seriously the roles played by actors and agents within different bounded and grounded institutional and regional contexts.

Placing Technological Innovation in Globalising China Production Linkage, Knowledge Exchange and Innovative Performance of the ICT Industry in a Developing Economy

This study critically examines the relevance of the perceived notions of localised production linkages, knowledge spillover and external technology transfer to the experiences of the growth of the ICT industry in China. The research is based on a major firm-level survey conducted in China’s three most important mega urban regions—Beijing, Shanghai-Suzhou and Shenzhen-Dongguan—where the bulk of the Chinese ICT industry is located. The results of the survey showed a distinct landscape of ICT industrial production in which each of the Chinese regions has functioned as the site of capital investment from different sources for different strategic interests. Despite a marked regional variation in ownership, industrial structure, market orientation and technological investment, firms in all regions have invariably reported internal development as the main source of core technology. A negative relationship existed between the level of technological innovation and external orientation in both capital investment and export production. No evidence has been found to verify the hypothesis that a higher level of technological innovation would co-exist with stronger production linkages and knowledge exchanges with both local firms and foreign-invested enterprises. A further analysis of the firms with different technological performance has highlighted the significance of regional setting, ownership, ability of capital mobilisation and corporate strategy and management in the process of technological innovation.

Geography of Knowledge Sourcing, Search Breadth and Depth Patterns, and Innovative Performance: A Firm Heterogeneity Perspective

The geography of knowledge sourcing has attracted much attention as firms increasingly rely on external knowledge to accelerate innovation. However, the existing literature has been silent about the way in which firms utilize external knowledge and has largely neglected firm heterogeneity in geographical knowledge sourcing. This paper established a geographical search model by combining geographical scales of knowledge sourcing with firm-level knowledge search strategies to investigate the differentiated knowledge search patterns and innovation dynamics between technological leaders and laggards with survey data from Zhejiang, one of the leading provinces in China. It is found that, while a broad search of local knowledge contributes to product innovation by technological laggards, it exerts no significant influence on technological leaders whose innovation depends more upon a nonlocal variety of knowledge sources. The findings highlight the uneven and selective knowledge flows within a cluster and question the importance of localized strong ties in innovation.

Local Innovativeness and Knowledge Spillovers of Indigenous Firms on Foreign Firms: Evidence from China's ICT Industry

Literature on transboundary knowledge flows has primarily focused on foreign direct investment (FDI) spillover effects in emerging economies during the last decades. Little has been known, however, about whether or not and how foreign firms learn from local firms to enhance their innovation performance. The existing literature on clusters lays much emphasis on the variety of knowledge sources in the process of innovation, but it largely ignores the social and institutional barriers to transboundary knowledge flows. This article argues that for foreign firms operating in emerging economies, the issues about legitimacy and liability of foreignness might inhibit “outsiders” from effective knowledge sourcing; therefore, the social and institutional structure in a region plays a no less significant role than knowledge per se. Based on a large-scale firm-level database from Chinas information and communications technology (ICT) industry, this article reveals that local innovativeness of indigenous firms significantly stimulates and enhances innovation of foreign firms. It is interesting to find that whereas related variety of a region fails to exert positive influences, ownership diversity and a low extent of market concentration that reflect the openness of a local innovation system significantly affect innovation performance of foreign firms. It calls for more studies on local institutional and social construction of interfirm knowledge flows.