Regional clusters and multinational enterprises: independence, dependence, or interdependence?

Abstract

This article outlines a model of regional cluster development in which the clusters and foreign multinational enterprises (MNEs) are interdependent. Such clusters are characterized by a strong or dominant presence of foreign MNEs as well as a strong contribution by cluster-based subsidiaries to the overall strategy of the MNEs. The case of the Hong Kong financial-services cluster is used to demonstrate that interdependent clusters provide types of investment opportunities, particularly for 'marketplace-seeking' and 'Information-seeking' investments, and benefits to foreign multinationals that go beyond those usually contemplated in the MNE literature, while the locations housing such clusters receive benefits that also go beyond those usually contemplated. The article concludes with implications for economic policy, from strategy, and further research on the interaction between clusters and MNEs.