Forming And Updating Of Industrial Cluster Based On MNCs' Investment

With the development of economical globalization, FDI in the world increases at a high speed and presents geographic concentration and industrial concentration. China is the largest inward FDI destination of all developing countries. According to the statistics in 2005, more than 200 foreign countries(regions) had invested in such Chinese industries as manufacturing industry, real estate industry, leasing and service industry and etc., and the total of foreign corporations had been up to 530,000. At present, not only has over 450 MNCs of the 500 largest MNCs worldwide invested in China, but also many industrial clusters based on MNCs investment (external-born industrial clusters) are coming into being, for example, the IT industrial cluster in Suzhou.With the study object of external-born industrial cluster, the paper mainly discusses forming and updating of external-born industrial cluster. The whole paper is divided into six chapters and the core parts are chapter two to chapter five. Based on the location theory of MNCs'investment, Chapter two deeply analyses the internal forming mechanism of external-born industrial cluster form two aspects, which are agglomeration economies and MNCs'strategy of"following", and then points out that: the forming of external-born industrial cluster is resulted form the interrelation between location advantages and MNCs'investment. As a dynamic location variable, agglomeration economies play an important role in the interaction. Chapter three discusses that the updating of external-born industrial cluster mostly depends on the external network, and clusters can update by high road or low road. However, in order to reduce the resistance of clusters'upgrading, we must construct the internal network to strengthen the MNCs'embeddedness. Chapter four focuses on the role that the government plays in the forming and evolution of external-born industrial cluster. By analyzing cluster policies at different stages in clusters, it stresses that Chinese government should constitute reasonable cluster polices according to the characters of clusters. Taking the IT cluster in Suzhoub for example, chapter five analyses the location advantages in Suzhou and the roles MNCs and the government play in the cluster. Then it puts forward some suggestions on how to promote the updating of cluster in the future.Based on the Chinese open economy, the author makes an intensive study on external-born industrial cluster with the theoretical and empirical analysis from threeaspects, which are the cluster's internal forming mechanism, the cluster's updating in global value chains and the role that the government plays in cluster. Therefore, the research on the external-born industrial cluster has far-reaching influences. On the one hand, the interaction between MNCs and clusters will strengthen MNCs'embeddedness and clusters'competitiveness. On the other hand, reasonable cluster policies constituted by governments according to characters at different stages in clusters will promote the forming and updating of external-born industrial cluster greatly.