Study On The Growth Of Local Enterprises In Multinational Corporations-driven Industrial Cluster

The regional industrial competitiveness mostly depends on whether there is industrial cluster in the region. Industrial cluster has become an important model for regional economic development representative. With the increasing degree of economic globalization and information technology, optimizing the allocation of resources in a global context becomes available. The impact of multinational corporations on world economic activities has become increasingly prominent and this factor has been gradually integrated into the analysis system of industrial cluster. Some scholars have begun to study the industrial cluster combined with multinational corporations and differed from the general industrial clusters.This paper focuses on the question of the growth of local enterprises in multinational corporations-driven (MNC-driven) industrial cluster. First, this paper expounds the definition of industrial cluster and the classical theories of both industrial cluster and firm growth. In this theoretical basis the author put forward definition and characteristics of the MNC-driven industrial cluster. Followed by an analysis of four formative mechanisms of the MNC-driven industrial cluster in host country:MNCs "ecological circle" effect, MNCs "competing response", the enhance effectiveness of multinational corporations and the induced path dependence effects by host country's policy. At the same time, the MNC-driven industrial cluster can be divided into several types according to different criteria. The previous theory is tested through the study of Pudong Shanghai IC industrial cluster. Then, the paper discusses the impact of multinational corporations on the growth of local enterprises. This paper gives a summary about theory of firm growth based on three dimensions——scale dimension, knowledge dimension and institution dimension. Such review of theory illuminates that firm growth is an interactive process with the scale expansion, knowledge accumulation and institution establishment. The MNC-driven industrial cluster helps the local enterprises to promote the scale expansion, to accelerate the knowledge accumulation, and to improve the institution establishment, while it also has a negative impact. Finally, on the basis of the theories and the actual situation, the paper cites MNC-driven industrial clusters to promote the role of local firm growth and analyzes the facing difficulties. After that, countermeasures are put forward to promote the formation and development of MNC-driven industrial cluster and to eliminate the negative impact of MNC-driven industrial cluster on the growth of local enterprises.