Does Distance Affect the Role of Nonlocal Subsidiaries on Cluster Firms’ Innovation? An Empirical Investigation on Chinese Biotechnology Cluster Firms

Abstract

As translocation strategy has been pursued by cluster firms, two types of nonlocal subsidiaries, nonlocal manufacturing subsidiaries (NMS) and nonlocal R&D subsidiaries (NRS) contribute to their holding firms’ innovation in different ways. Prior studies have not paid much attention to the role of NMS and NRS, and how their effects are contingent on distance. To address this gap, this paper assesses the contribution of NMS and NRS on cluster firms’ innovation performance respectively and ascertains the moderating effect of geographical distance and social distance. The empirical investigation is conducted using a sample of 79 Chinese cluster firms. Our results indicate that both NMS and NRS have positively influenced cluster firms’ innovative performance. Moreover, geographical distance negatively moderates both the role of NMS and NRS. On the other hand, social distance only increases the influence of NRS on their holding firms’ innovation. Thus, spatial distance may hamper knowledge acquisition through NMS and NRS while loosely connected NRS would contribute more to their parent companies in local clusters. Our research contributes to the literature on cluster firms’ relocation strategy by clarifying the distinct role of NMS and NRS and recognizing the contingent effect caused by geographical and social distance.

The cluster approach in the economic and innovative development of mining region (on the example of the Kemerovo region)

“…Evolutionary theory, the theory of spatial development, the theory of technological change and systemic innovation, and Porter's theory of competitiveness have made a significant contribution to cluster theory. Clusters were considered both as a form of industrial agglomerations, and as innovative ecosystems, and as a special class of economic projects (cluster initiatives) [1,2,4,5].…”

“…The issues of stimulating economic growth are important in modern economic policy [1,2]. The difference between regions in terms of economic development, cultural, religious, social and other non-economic features, limited measures of influence of the federal authorities allows us to talk about the expediency of the active role of regional authorities.…”