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Regional Cycles of Learning: Foreign Multinationals as Agents of Technological Upgrading in Less Developed Countries

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  • Martina Fromhold-Eisebith

    (Department of Geography and Applied Geinformatics, University of Salzburg, Hellbrunnerstrasse 34, A-5020 Salzburg, Austria)

Abstract

Within the debate about positive effects of foreign multinational branch plants on host regions in less developed countries questions of technological learning and upgrading rank at the top. This paper describes forces and mechanisms which, under favourable conditions, promote dissemination of know-how through the dynamics of regional cycles of learning. Enriching earlier insights into the local embedding of subsidiaries and processes of cumulative causation, it emphasises why and how agglom-erating branches of globally operating technology companies engage in upgrading their less developed locality: effects are triggered by a combination of increasing regional labour-cost pressure and corresponding reactions of firms which relate to their branch activities and affect the institutional framework. Two models of regional cycles of learning are introduced which depict crucial distinctions between spatial clusters of technology firms with and without foreign affiliates. Empirical evidence is provided by comparing two technology regions in developing Asia: Bangalore, India, and Bandung, Indonesia. Both are well endowed with universities, research institutions, and firms in technology sectors, but differ with regard to the presence of foreign firms, and accordingly, display divergent qualitative developments.

Suggested Citation

  • Martina Fromhold-Eisebith, 2002. "Regional Cycles of Learning: Foreign Multinationals as Agents of Technological Upgrading in Less Developed Countries," Environment and Planning A, , vol. 34(12), pages 2155-2173, December.
    • Handle: RePEc:sae:envira:v:34:y:2002:i:12:p:2155-2173
    DOI: 10.1068/a3545
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    1. Fromhold-Eisebith Martina & Eisebith Günter, 2003. "Globale Krise – regionale Gewinner?: Entwicklungstrends des IT-Outsourcing zu Schwellenländern am Beispiel des indischen Bangalore," ZFW – Advances in Economic Geography, De Gruyter, vol. 47(1), pages 82-96, October.
    2. Elena Zukauskaite & Michaela Trippl & Monica Plechero, 2017. "Institutional Thickness Revisited," Economic Geography, Taylor & Francis Journals, vol. 93(4), pages 325-345, August.
    3. Csomós, György & Tóth, Géza, 2016. "Exploring the position of cities in global corporate research and development: A bibliometric analysis by two different geographical approaches," Journal of Informetrics, Elsevier, vol. 10(2), pages 516-532.
    4. Y. H. Dennis Wei, 2015. "Network Linkages and Local Embeddedness of Foreign Ventures in China: The Case of Suzhou Municipality," Regional Studies, Taylor & Francis Journals, vol. 49(2), pages 287-299, February.
    5. Fuchs Martina & Winter Johannes, 2008. "Competencies in subsidiaries of multinational companies: The case of the automotive supply industry in Poland," ZFW – Advances in Economic Geography, De Gruyter, vol. 52(1), pages 209-220, October.

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