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Local clusters in global value chains: exploring dynamic linkages between Germany and Pakistan

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  • Khalid Nadvi
  • Gerhard Halder

Abstract

Recent research has underlined the importance of external linkages for industrial clusters. Suppliers and buyers within a global value chain offer important external ties for cluster-based producers not only in terms of the distribution of physical goods, but also for knowledge flows and innovation. Globalization has intensified such value chain links, connecting geographically dispersed producers to global markets. Yet, there is limited research on how local clusters enter global chains or on ties between clusters in the developed and developing world. This study addresses this gap. It uses the case of the global surgical instrument industry to analyse connections and differences between the industry's leading production clusters in Germany and Pakistan. Global standards, low-cost competition, and advances in medical technology raise challenges for both clusters. The paper explores the responses to these challenges. It distinguishes between knowledge and production links to illustrate differentiation in each cluster, diverging trajectories and continuing ties.

Suggested Citation

  • Khalid Nadvi & Gerhard Halder, 2005. "Local clusters in global value chains: exploring dynamic linkages between Germany and Pakistan," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 17(5), pages 339-363, September.
    • Handle: RePEc:taf:entreg:v:17:y:2005:i:5:p:339-363
    DOI: 10.1080/08985620500247785
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    Cited by:

    1. Ernesto Sanchez-Triana & Leonard Ortolano & Javaid Afzal, 2012. "Green Industrial Growth : Mainstreaming Environmental Sustainability in Pakistan's Industrial Sector," World Bank Publications - Reports 15981, The World Bank Group.
    2. Andrea González & Juan Carlos Hallak, 2022. "Relational links for insertion in non‐mass global value chains: Opportunities for middle‐income countries," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 653-672, May.
    3. Marta Gancarczyk, 2010. "Model schyłku i odrodzenia klastrów," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 1-21.
    4. Bade, Franz-Josef & Bode, Eckhardt & Cutrini, Eleonora, 2011. "Does domestic offshoring precede international offshoring? Industry-level evidence," Kiel Working Papers 1699, Kiel Institute for the World Economy (IfW Kiel).
    5. Franz-Josef Bade & Eckhardt Bode & Eleonora Cutrini, 2015. "Spatial fragmentation of industries by functions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(1), pages 215-250, January.
    6. Roman Jurowetzki & Rasmus Lema & Bengt-Åke Lundvall, 2018. "Combining Innovation Systems and Global Value Chains for Development: Towards a Research Agenda," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 364-388, July.
    7. Markus Grillitsch & Josephine Rekers & Franz Tödtling, 2019. "When drivers of clusters shift scale from local towards global: What remains for regional innovation policy?," PEGIS geo-disc-2019_03, Institute for Economic Geography and GIScience, Department of Socioeconomics, Vienna University of Economics and Business.
    8. Guimón, José & Chaminade, Cristina & Maggi, Claudio & Salazar-Elena, Juan Carlos, 2018. "Policies to Attract R&D-related FDI in Small Emerging Countries: Aligning Incentives With Local Linkages and Absorptive Capacities in Chile," Journal of International Management, Elsevier, vol. 24(2), pages 165-178.
    9. Anders Malmberg & Peter Maskell, 2006. "Localized Learning Revisited," Growth and Change, Wiley Blackwell, vol. 37(1), pages 1-18, March.
    10. José Antonio Belso-Martínez & María José López-Sánchez & Rosario Mateu-García, 2018. "New MNE subsidiaries in old clusters: when, why, and how," Review of Managerial Science, Springer, vol. 12(2), pages 441-467, March.
    11. Martin Hess & Henry Wai-Chung Yeung, 2006. "Whither Global Production Networks in Economic Geography? Past, Present, and Future," Environment and Planning A, , vol. 38(7), pages 1193-1204, July.
    12. Pipkin, Seth, 2011. "Local Means in Value Chain Ends: Dynamics of Product and Social Upgrading in Apparel Manufacturing in Guatemala and Colombia," World Development, Elsevier, vol. 39(12), pages 2119-2131.
    13. Manning, Stephan & Ricart, Joan E. & Rosatti Rique, Maria Soledad & Lewin, Arie Y., 2010. "From blind spots to hotspots: How knowledge services clusters develop and attract foreign investment," Journal of International Management, Elsevier, vol. 16(4), pages 369-382, December.
    14. Liu, Hongxun & Li, Jianglong & Long, Houyin & Li, Zhi & Le, Canyu, 2018. "Promoting energy and environmental efficiency within a positive feedback loop: Insights from global value chain," Energy Policy, Elsevier, vol. 121(C), pages 175-184.
    15. Jose-Luis Hervas-Oliver, 2011. "Social Networks across Spatial Agglomerations: the Paradox of High-Tech Clusters. A Critical Revision of Clusters," ERSA conference papers ersa11p779, European Regional Science Association.
    16. De Marchi, Valentina & Giuliani, Elisa & Rabellotti, Roberta, 2015. "Local innovation and global value chains in developing countries," MERIT Working Papers 2015-022, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    17. Lema, Rasmus, 2010. "Adoption of Open Business Models in the West and Innovation in India's Software Industry," MPRA Paper 49589, University Library of Munich, Germany.
    18. Pipkin, Seth & Fuentes, Alberto, 2017. "Spurred to Upgrade: A Review of Triggers and Consequences of Industrial Upgrading in the Global Value Chain Literature," World Development, Elsevier, vol. 98(C), pages 536-554.
    19. Manning, Stephan, 2013. "New Silicon Valleys or a new species? Commoditization of knowledge work and the rise of knowledge services clusters," Research Policy, Elsevier, vol. 42(2), pages 379-390.
    20. Scuotto, Veronica & Garcia-Perez, Alexeis & Nespoli, Chiara & Messeni Petruzzelli, Antonio, 2020. "A repositioning organizational knowledge dynamics by functional upgrading and downgrading strategy in global value chain," Journal of International Management, Elsevier, vol. 26(4).
    21. Eckhardt Bode & Franz-Josef Bade Bade & Eleonora Cutrini Cutrini, 2011. "Domestic and International Offshoring of Tasks," ERSA conference papers ersa11p1840, European Regional Science Association.
    22. Valentina De Marchi & Elisa Giuliani & Roberta Rabellotti, 2018. "Do Global Value Chains Offer Developing Countries Learning and Innovation Opportunities?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 389-407, July.
    23. Carmelina Bevilacqua & Ilaria Giada Anversa & Gianmarco Cantafio & Pasquale Pizzimenti, 2019. "Local Clusters as “Building Blocks” for Smart Specialization Strategies: A Dynamic SWOT Analysis Application in the Case of San Diego (US)," Sustainability, MDPI, vol. 11(19), pages 1-25, October.

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