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Global Strategy and the Acquisition of Local Knowledge How MNCs Enter Regional Knowledge Clusters

Author

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  • Mark Lorenzen
  • Volker Mahnke

Abstract

The paper addresses two recent interrelated phenomena: High- tech regional knowledge clusters, and globalization of R&D activities by multinational corporations (MNCs). Combining MNC literature; regional development literature; and literature on social networks, the paper discusses determinants of entry modes used by MNCs that localize R&D units in regional knowledge clusters. The paper states that the entry mode used by a MNC depends upon the type of agglomeration economies the latter seeks to appropriate: Those related to network relations; to local labor market specialization; or to institutional specialization. The paper adds theoretical insight into advantages and disadvantages of different entry modes with respect to appropriation of agglomeration economies, and special attention is dedicated to discussing acquisition. Through the use of an empirical case ¾ the entry of five MNCs into the Danish telecommunications cluster in Aalborg, the paper exemplifies its theoretical observations, but also points to how the evolution of a knowledge cluster may be severely affected by MNCs that enter through acquisition.

Suggested Citation

  • Mark Lorenzen & Volker Mahnke, 2002. "Global Strategy and the Acquisition of Local Knowledge How MNCs Enter Regional Knowledge Clusters," DRUID Working Papers 02-08, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    • Handle: RePEc:aal:abbswp:02-08
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    References listed on IDEAS

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    Cited by:

    1. Dachs, Bernhard, 2017. "Internationalisation of R&D: A Review of Drivers, Impacts, and new Lines of Research," MPRA Paper 83367, University Library of Munich, Germany.
    2. Christian Richter Østergaard & Eunkyung Park, 2015. "What Makes Clusters Decline? A Study on Disruption and Evolution of a High-Tech Cluster in Denmark," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 834-849, May.
    3. Jérôme Stuck & Tom Broekel & Javier Revilla Diez, 2016. "Network Structures in Regional Innovation Systems," European Planning Studies, Taylor & Francis Journals, vol. 24(3), pages 423-442, March.
    4. Maldea, Radu-Andrei, 2023. "Winning when Going Global – On the Role of Heritage and Strategic Moves for Internationalization Endeavors of Start-ups," Junior Management Science (JUMS), Junior Management Science e. V., vol. 8(2), pages 532-568.
    5. Michael S. Dahl & Christian Ø.R. Pedersen, 2003. "Knowledge Flows through Informal Contacts in Industrial Clusters Myths or Realities?," DRUID Working Papers 03-01, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    6. Michel Barabel & Isabelle Huault & Olivier Meier, 2007. "Changing Nature and Sustainability of the Industrial District Model: The Case of Technic Valley in France," Growth and Change, Wiley Blackwell, vol. 38(4), pages 595-620, December.
    7. Ashok Deo Bardhan & Cynthia Kroll, 2006. "Competitiveness and an Emerging Sector: The Russian Software Industry and its Global Linkages," Industry and Innovation, Taylor & Francis Journals, vol. 13(1), pages 69-95.
    8. Julie Hermans & Annick Castiaux & Marcus Dejardin & Stéphane Lucas, 2012. "Configuration in the flesh: challenges in publicly promoted clusters," The Journal of Technology Transfer, Springer, vol. 37(5), pages 609-630, October.
    9. Balazs Lengyel & Loet Leydesdorff, 2011. "Regional Innovation Systems in Hungary: The Failing Synergy at the National Level," Regional Studies, Taylor & Francis Journals, vol. 45(5), pages 677-693.
    10. Dahl, Michael S. & Pedersen, Christian O.R., 2004. "Knowledge flows through informal contacts in industrial clusters: myth or reality?," Research Policy, Elsevier, vol. 33(10), pages 1673-1686, December.
    11. Gretzinger, Susanne & Royer, Susanne, 2014. "Relational resources in value adding webs: The case of a Southern Danish firm cluster," European Management Journal, Elsevier, vol. 32(1), pages 117-131.
    12. Mousalam Alabdul Razzak & Osama Sam Al-Kwifi & Zafar U. Ahmed, 2018. "Rapid Alignment of Resources and Capabilities in Time-Bound Networks: A Theoretical Proposition," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 19(4), pages 273-287, December.
    13. Izabella Szakálné Kanóa, Balázs Lengyel, Zoltán Elekes, Imre Lengyel & Balázs Lengyel & Zoltán Elekes & Imre Lengyel, 2016. "Related variety, ownership, and firm dynamics in transition economies: the case of Hungarian city regions 1996-2012," Papers in Evolutionary Economic Geography (PEEG) 1612, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2016.
    14. Michael S. Dahl & Christian Ø.R. Pedersen & Bent Dalum, 2003. "Entry by Spinoff in a High-tech Cluster," DRUID Working Papers 03-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.

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    More about this item

    Keywords

    MNCs; entry mode; acquisition; explorative R&D; regional clusters; localized learning; networks; telecommunications industry; North Jutland; Denmark.;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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