Clusters and regional development: Some cautionary observations from the semiconductor industry

Abstract In this paper, we investigate the transactions-costs assumptions which are embedded in different understandings of industrial clustering. By carefully examining these assumptions we then proceed to investigate the extent to which industrial structure is related to questions of innovation. In order to do this we examine the case of the global semiconductor industry. After describing in detail the structure of the industry, we then employ a Geographical Information System in order to map the locations of the various plants and establishments which are part of three major multinational semiconductor producers. These unique mappings allow us to challenge some widely held views concerning the nature of the relationship between industrial structures, firm types and regional development.

[1]  R. Caves,et al.  Multinational Enterprise and Economic Analysis: Preface , 2007 .

[2]  Zoltan J. Acs,et al.  Innovation and the Growth of Cities , 2002 .

[3]  Mark S. Granovetter.  The Strength of Weak Ties , 1973, American Journal of Sociology.

[4]  Philip McCann.  Industrial location economics , 2002 .

[5]  M. Aoki.  Information, Incentives and Bargaining in the Japanese Economy: A Microtheory of the Japanese Economy , 1988 .

[6]  P. Nijkamp,et al.  The Emergence of the Knowledge Economy: A Regional Perspective , 2002 .

[7]  Philip McCann,et al.  The Location of Technological Innovations within the Japanese Semiconductor Industry , 2002 .

[8]  Harvey Molotch,et al.  The Regional World , 1998 .

[9]  P. McCann,et al.  Industrial alliances and firm location behaviour: some evidence from the US semiconductor industry , 2000 .

[10]  Mark S. Granovetter.  Economic Action and Social Structure: The Problem of Embeddedness , 1985, American Journal of Sociology.

[11]  Charles Perrow,et al.  The New Competition: Institutions of Industrial Restructuring. , 1991 .

[12]  Stephen Sheppard,et al.  The Rise, Fall and Rise Again of Industrial Location Theory , 2003 .

[13]  P. McCann,et al.  Industrial clusters, transactions costs and the institutional determinants of MNE location behaviour , 2002 .

[14]  P. McCann.  Urban and Regional Economics , 1991 .

[15]  Philip McCann,et al.  Location, agglomeration and infrastructure , 2003 .

[16]  W. Isard,et al.  INDUSTRIAL COMPLEX ANALYSIS AND REGIONAL DEVELOPMENT , 1961 .

[17]  Giacomo Becattini,et al.  Industrial Districts: A New Approach To Industrial Change , 2004 .

[18]  Lawrence S. Welch,et al.  The internationalisation process of the firm , 1978 .

[19]  D. Angel.  High-Technology Agglomeration and the Labor Market: The Case of Silicon Valley , 1991 .

[20]  M. Porter.  Clusters and the new economics of competition. , 1998, Harvard business review.

[21]  J. Johanson,et al.  The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments , 1977 .

[22]  D. Teece,et al.  Managing Intellectual Capital: Licensing and Cross-Licensing in Semiconductors and Electronics , 1997 .

[23]  Ivana Paniccia,et al.  Industrial Districts: Evolution and Competitiveness in Italian Firms , 2002 .

[24]  P. McCann,et al.  Analytical Differences in the Economics of Geography: The Case of the Multinational Firm , 2005 .

[25]  O. Williamson.  Markets and Hierarchies , 1975 .

[26]  I. Turok.  Inward Investment and Local Linkages: How Deeply Embedded is “Silicon Glen”? , 1993 .

[27]  Rodney Clark,et al.  The Japanese Company , 1980 .

[28]  P. McCann,et al.  The spatial and hierarchical organization of Japanese and US multinational semiconductor firms , 2002 .

[29]  R. Vernon.  International investment and international trade in the product cycle , 1966 .

[30]  M. Castells,et al.  Technopoles of the World. The Making of 21st Century Industrial Complexes , 1995 .

[31]  James Simmie,et al.  Reasons for the Development of 'Islands of Innovation': Evidence from Hertfordshire , 1998 .

[32]  B. Kogut,et al.  The Exploration of Technological Diversity and the Geographic Localization of Innovation , 1997 .

[33]  Ajay Agrawal,et al.  Innovation and the Growth of Cities , 2003 .

[34]  P. Krugman.  Geography and Trade , 1992 .

[35]  A. Venables,et al.  The Spatial Economy: Cities, Regions, and International Trade , 1999 .

[36]  P. McCann,et al.  The Location Behavior of the Multinational Enterprise: Some Analytical Issues , 2004 .

[37]  Fabio Sforzi,et al.  From Industrial Districts to Local Development , 2003 .

[38]  A. Chandler,et al.  Regional Advantage: Culture and Competition in Silicon Valley and Route 128 , 1994 .

[39]  P. Buckley,et al.  The Multinational Paradigm. , 1993 .

[40]  M. Porter.  The Competitive Advantage Of Nations , 1990 .

[41]  P. Nijkamp,et al.  Entrepreneurship and Regional Economic Development: A Spatial Perspective , 2004 .

[42]  Robert E. Kuenne,et al.  The Impact of Steel upon the Greater New York-Philadelphia Industrial Region , 1953 .

[43]  Frank Wilkinson,et al.  Collective Learning and Knowledge Development in the Evolution of Regional Clusters of High Technology SMEs in Europe , 1999 .

[44]  Philip McCann,et al.  How Deeply Embedded is Silicon Glen? A Cautionary Note , 1997 .

[45]  C. Sabel,et al.  The Second Industrial Divide: Possibilities for Prosperity , 1984 .

[46]  A. Meyer,et al.  Management of an international network of industrial R&D laboratories , 1993 .

[47]  Local Agglomeration and Global Networks Of the Semiconductor Industry: a Comparative Study of U.S. and Japanese Firms , 2001 .

[48]  Charlie Karlsson,et al.  Regional Policies and Comparative Advantage , 2002 .

[49]  M. Best,et al.  The new competition : institutions of industrial restructuring , 1991 .

[50]  James Simmie,et al.  Innovative clusters: global or local linkages? , 1999, National Institute Economic Review.

[51]  A. Marshall.  Principles of Economics , .

[52]  John Cantwell,et al.  The frontier of international technology networks: sourcing abroad the most highly tacit capabilities , 1999 .

[53]  Luis Suarez-Villa,et al.  Operational Strategy, R&D and Intra-metropolitan Clustering in a Polycentric Structure: The Advanced Electronics Industries of the Los Angeles Basin , 1997 .

[54]  George A. Akerlof.  The Market for “Lemons”: Quality Uncertainty and the Market Mechanism , 1970 .

[55]  James E. Rauch.  Business and Social Networks in International Trade , 2001 .

[56]  R. Martin,et al.  Deconstructing clusters: chaotic concept or policy panacea? , 2003 .

[57]  Leon N. Moses,et al.  Location and the Theory of Production , 1958 .

[58]  Stephen Tallman,et al.  Knowledge, clusters, and competitive advantage , 2004 .

[59]  Claude d'Aspremont,et al.  Knowledge as a public good: efficient sharing and incentives for development effort , 1998 .

[60]  P. McCann,et al.  Innovation, agglomeration, and regional development , 2005 .

[61]  J. Markusen.  Multinational Firms and the Theory of International Trade , 2002 .

[62]  P. McCann,et al.  Industrial Clusters: Complexes, Agglomeration and/or Social Networks? , 2000, Urban Studies.

[63]  M. Feldman,et al.  R&D spillovers and the ge-ography of innovation and production , 1996 .