A Study On The FDI-based Cluster Governance Structure And Its Impact On Upgrading Of Local Firms In FDI Cluster

Recently,many FDI-based clusters are emerging in the region of Yangtse River Delta and.As main member in FDI-based cluster,FDI firms' governance has important influence on the entrance and upgrading of local finns.This paper begins with the network governance structure-transaction governance and social relationship governance.By Gereffi.'s method in classifying global Chains governance model,I broaden Gereffi.'s three dimensions into five dimensions by adding two more dimensions.Then the governance models in clusters are divided into five types according to the five dimensions.This five governance models are market model,modular model,relational model,captive model and hierarchy model.In FDI-based cluster,there are two tpyes of governance models which have important impact on local firms.One is relational model between FDI-based firms based on social relationship governance.The other one is captive model between FDI-based firms and local firms based on transaction governance.The empirical test on Taiwan-based laptop cluster in Suzhou shows that:the relational governance model between firms from Taiwan form a core network in Taiwan-based laptop cluster which prevents local firms' entrance.The captive governance model based on"Attestation System","uyer Zero Stock","Competitive Procurement"and"Vender Quality Assessment"between firms from Taiwan and local firms is useful for local firm's product and process upgrading,but not useful for functional and inter-sectional upgrading.