Edited by Charlie Karlsson
Chapter 13: The Reciprocal Relationship between Transnationals and Clusters: A Literature Review
Filip De Beule, Daniël Van Den Bulcke and Haiyan Zhang 1 Introduction The central question which is dealt with in this chapter is the reciprocal relationship and impact of transnational corporations (TNCs) and clusters. Both foreign direct investment (FDI) and industry clusters have received considerable and growing worldwide attention from academics and policy decision makers in many countries. Both TNCs and clusters are broadly thought to aﬀect the host economy positively through technology, production and trade linkages, human capital, the facilitation of knowledge and, last but not least, innovation. While FDI and clusters have most often been studied separately, they have recently been regarded as rightly being linked. There are indications that the globalization of tangible and especially intangible assets across borders is being constrained by the fact that the location of the creative activities and use of these assets is becoming increasingly inﬂuenced by immobile clusters of complementary value-added activities. Silicon Valley (Scott & Angel, 1987; Saxenian, 1990; Scott, 2002) and Hollywood (Christopherson & Storper, 1986) may be the world’s bestknown clusters, but other examples of such initiatives abound in every international, national, regional, state and even metropolitan economy, especially in the more advanced nations (Paniccia, 1998; Porter, 1998). A number of developing countries in South America and the Caribbean, as well as China and India, have also taken cluster formation to heart. Thus, while globalization suggests that the location and ownership of production is becoming geographically more dispersed, other economic forces are stimulating a more pronounced geographical...
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