Catch-up via agglomeration: A study of township clusters

Despite the emergence of Chinese manufacturing industries over the past 30 years, little is known about how local clusters have helped Chinese firms catch up in global competition. By analyzing the performance of 87 township industrial clusters in Jiangsu Province, we find that the level of competition in a cluster mediates the relationship between cluster size and cluster performance and that a cluster’s number of R&D centers and interfirm collaborations positively affect a cluster’s innovativeness which, in turn, contributes to cluster performance. Our study contributes to a better understanding of cluster catch-up strategies, helping compare and contrast the differences between clusters from developing countries and ones from developed countries. Copyright © 2016 Strategic Management Society.