Cluster-based global firms' use of local capabilities

Purpose: Despite growing interest in clusters role for the global competitiveness of firms, there has been little research into how globalization affects cluster-based firms' (CBFs) use of local knowledge resources and the combination of local and global knowledge used. Using the cluster's knowledge base as a mediating variable, the purpose of this paper is to examine how globalization affected the studied firms' use of local cluster-based knowledge, integration of local and global knowledge, and networking capabilities. Design/methodology/approach: Qualitative case studies of nine firms in three clusters strongly affected by increasing global division of labour. Findings: The paper suggests that globalization has affected how firms use local resources and combine local and global knowledge. Unexpectedly, clustered firms with explicit procedures and established global fora for exchanging knowledge were highly active in local knowledge use, whereas CBFs characterized by a more implicit knowledge base did not use localized knowledge. Research limitations/implications: The study is exploratory and covers three clusters in one small and open developed economy. Further corroboration through replicated studies and possibly triangulation with quantitative studies would further develop the understanding on how globalization impacts on the internal organization of CBFs. Practical implications: For policy makers, cluster policies should be reconsidered if the role of clusters differs from what has been expected so far. From being self-contained systems which only links to the outside world in the extremities of the local value chain, cluster activities now unfolds in complex production networks around the world, entailing the development and/or integration of clusters in both developing and developed countries. Originality/value: Several studies have examined the changing role of clusters in the evolving global division of labour. However, research is lacking that addresses the challenges of transformation from the level of the CBF and how these may be affected by cluster evolution. The paper takes a micro-oriented perspective and focus on clusters in Denmark, a small and mature economy.