The Role of Returnee-Entrepreneurs in Cluster Emergence: The Case of Shanghai’s Semiconductor-Design Industry
Posted: 26 May 2012
Date Written: May 25, 2012
While industry clusters are an important part of the global economy, our understanding of the factors that lead to their emergence is still lacking. A recent stream of research suggests that returnee-entrepreneurs can dramatically accelerate the emergence of high-tech clusters in developing economies (Hsu 1997; Saxenian and Hsu 2001; Saxenian 2002, 2006). But that is only one factor important to cluster emergence; this stream of research has not examined how another factor — competition with MNCs — might alter the effects returnee-entrepreneurs have on cluster emergence. To fill this literature gap, I focus on the competition for experienced engineers between returnee firms and MNCs in one newly emergent cluster. Drawing on 50 interviews in Shanghai’s semiconductor-design industry, I found that returnee-entrepreneurs played an important role in stimulating cluster emergence by transferring knowledge to local engineers. I also discovered that, as the cluster develops, the en masse entry of MNCs increases competition for experienced engineers at the expense of returnee firms. The results of this study have important implications for our understanding of high-tech cluster emergence and of the role of returnee firms in fostering indigenous firms’ technological upgrading.
Keywords: Clusters, returnees, multinational corporations, China
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