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

Mark Lorenzen and Volker Mahnke

No 02-08, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

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.

Keywords: MNCs; entry mode; acquisition; explorative R&D; regional clusters; localized learning; networks; telecommunications industry; North Jutland; Denmark. (search for similar items in EconPapers)
JEL-codes: L22 O18 O32 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (15)

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