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The value of local externalities in country-of-origin clusters: Evidence from China

Urzelai, Berrbizne; Puig, Francisco


Francisco Puig


Emily Pickering


Business cooperation and the exchange of information and knowledge are actions and decisions that firms can build in order to compete more effectively in globalized markets. These options are even more relevant for SMEs to access and expand in new international markets and through more commitment entry modes as foreign direct investment (FDI).

While studies on the role of local externalities are well established in the Economic Geography literature, its international dimension is still unexplored in deep. This is surprising when the survival and growth of the subsidiaries depends on the efficient adjustment with its context. The objective of this paper is to analyse the perceptions of the role that country-of-origin clusters play in a sample of 24 managers from European SMEs subsidiaries located in China. Our results suggest that the higher value of the externalities are perceived in the dimensions of networking and legitimacy, and when the subsidiary pursues simultaneously efficiency and markets in their investments.

Publication Date Jan 1, 2019
Peer Reviewed Not Peer Reviewed
Pages 117-133
Series Title AIB Book Series
Book Title The Changing Strategies of International Business
ISBN 9783030039301
APA6 Citation Urzelai, B., & Puig, F. (2019). The value of local externalities in country-of-origin clusters: Evidence from China. In E. Pickering (Ed.), The Changing Strategies of International Business, 117-133. Palgrave Macmillan
Keywords cluster, internationalization, networks, externalities, SMEs,
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