Specialization And The Upgrading Of Local Industrial Clusters

As an organization form between market and integrated corporation, industrial clusters have greatly promoted the regional economic development. As one of the most typical province for industrial clusters, Zhejiang province confronts a lot of problems after several years' fast growing. Why are local industrial clusters still on the low level of trading and specialization? Why are they constrained to upgrade from OEM to OBM? What makes it hard for industrial clusters in Zhejiang province to upgrade both inside the district and on global value chains? The author holds that one of the main reasons of the formation and development of the cluster is the deepening of professional specialization and the expansion of trade. So, in order to answer the questions above, the thesis analyzes both the inter-firm linkages and cross border-linkages in the view of Specialization and reward-increasing. And finally with the empirical study of Yongkang hardware clusters, five conclusions are summarized.First, the division of market and the impersonate trade are two factors to constraint the expansion of trade net, which consequently affect the deepening of specialization in the cluster and make the cluster hard to upgrade. Second, the lack of inter-firm labor division and the absence of large corporations' governance in the cluster are two possible factors to prevent clusters from price competition to quality and brand competition. Third, the lack of market power, no willing to innovate, and the difficulties to get information of foreign market make it hard for local industrial clusters to upgrade on global value chains.What have been stated in this dissertation follows the conclusion that, upgrading of local industrial clusters matters not only the internal linkages, but also the external linkages. But for clusters in Zhejiang province, the internal linkages are more important for clusters' upgrading, which can make the reward-increasing from superficial to more deepening.