The Economies and Diseconomies of Industrial Clustering: Multinational Enterprises versus Uninational Enterprises

Research output: Contribution to journalArticlepeer-review

Authors

  • Naresh R. Pandit
  • Gary A. S. Cook
  • Feng Wan
  • Jonathan V. Beaverstock
  • Pervez N Ghauri

Abstract

This study’s objective is to compare cluster economies and diseconomies for multinational enterprises (MNEs) and uninational enterprises (UNEs) within the London financial services cluster. In contrast to the implicit assumption of the cluster participation literature that the economies and diseconomies of clusters are valued similarly by all firms, we find that economies relating to social capital and labour market pooling are equally important to MNEs and UNEs, economies relating to local competition and diseconomies relating to congestion costs are more important to MNEs than to UNEs, and economies relating to the reputational effects of locating in a world-leading cluster and access to specialised suppliers are more important to UNEs than to MNEs. That MNEs and UNEs do not experience cluster economies and diseconomies in the same way indicates that both cluster participation theory and international business theory need augmentation to recognise that cluster incumbents benefit and suffer from cluster membership differently.

Details

Original languageEnglish
Pages (from-to)1-33
Number of pages33
JournalManagement International Review
Publication statusPublished - 4 Sep 2018

Keywords

  • Clusters, Location, FDI, MNEs, Uninational enterprises, Financial services