Local Cluster Of Enterprises And Its Evolution: The Impact Of Trans-corporation's FDI

With the globalization and Localization trend of economic development, trans-corporations(TNCs) and local clusters of enterprises (LCE) are more and more important in the world economic development. The fact that TNCs enter into the LCE has already been inevitable. On one hand, LCE has been the first choice of TNCs' FDI. In order to obtain competition advantage better, the overseas subsidiaries of TNCs pay more attention to be embedded in the LCE. On the other hand, LCE regards TNCs as sources of external advantage knowledge. At the same time, LCE takes advantage of TNCs' global networks. TNCs are the linkage between local economic and global economic. So TNCs are the motive force that makes the evolution of LCE gradually. Certainly, the TNCs' impact on LCE is affected by many factors. The entry of the TNCs may accelerate the development of LCE, or may weaken the competitiveness of LCE. This thesis uses the analytical methods of economics and management synthetically. We analyze the LCE' s different ability to attract TNCs' FDI regarding industry and technological characteristic. Based on the view of system theory, we point out that the fact TNCs enter into LCE will impact on LCE system in some aspects such as system individuals, interaction between system individuals, interaction between system and environment, etc. Thus, TNCs promote the evolution of LCE system. The linkage effect between TNCs and indigenous enterprises, and the upgrading of enterprises' behavior along value chain are the key factors that promote the evolution of LCE system. There are two cases in this thesis. Firstly, we analyze the different ability to attract FDI between Beijing, Shanghai, Guangdong, Jiangsu, and Zhejiang. Secondly, we analyze the evolution of Zhongguancun cluster. At last, we will point out the limitation of this thesis, and put forward the policy recommendations for local government.