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Exporting the German Model: The Establishment of a New Automobile Industry Cluster in Shanghai

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  • Heiner Depner
  • Harald Bathelt

Abstract

Recent work has provided evidence that the establishment of new industry clusters cannot be jump-started through policy initiatives alone. This evidence does not imply, however, that the genesis of a new cluster cannot be planned at all. Especially in the context of a developing economy, it seems useful to reinvestigate the relation among economic development, the strategies of multinational firms, and state intervention in this respect. Drawing from the case of the automobile industry and its supplier system in Shanghai in which German firms play an important role, we provide empirical evidence of the evolution of a new cluster that is supported by the state in various forms and characterized by a focal, hierarchically structured production system. We use a multidimensional approach to clusters, which leads to a more nuanced understanding of the evolution and growth of a cluster than that provided by earlier accounts. This approach allows us to distinguish the development of the Shanghai automobile industry cluster along its vertical, horizontal, external, institutional, and power dimensions. We provide evidence that another dimension—“culture”—plays an important role, especially in its relation to issues of power and institutions. The role of this dimension is demonstrated in the case of German firms, which tap into the Chinese innovation system. This system is characterized by particular business relations, institutions, norms, and various social practices that are new to German firms. We demonstrate how this difference creates problems in establishing local production and supplier relations and how these problems can be overcome.

Suggested Citation

  • Heiner Depner & Harald Bathelt, 2005. "Exporting the German Model: The Establishment of a New Automobile Industry Cluster in Shanghai," Economic Geography, Taylor & Francis Journals, vol. 81(1), pages 53-81, January.
    • Handle: RePEc:taf:recgxx:v:81:y:2005:i:1:p:53-81
    DOI: 10.1111/j.1944-8287.2005.tb00255.x
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    Cited by:

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    2. Felix Haifeng Liao & Yehua H Dennis Wei, 2013. "Tncs' Technology Linkages with Domestic Firms: An Investigation of the Ict Industry in Suzhou, China," Environment and Planning C, , vol. 31(3), pages 460-474, June.
    3. Xiaofei Chen & Enru Wang & Changhong Miao & Lili Ji & Shaoqi Pan, 2020. "Industrial Clusters as Drivers of Sustainable Regional Economic Development? An Analysis of an Automotive Cluster from the Perspective of Firms’ Role," Sustainability, MDPI, vol. 12(7), pages 1-22, April.
    4. Yeung, Henry Wai-chung & Liu, Weidong & Dicken, Peter, 2006. "Transnational corporations and network effects of a local manufacturing cluster in mobile telecommunications equipment in China," World Development, Elsevier, vol. 34(3), pages 520-540, March.
    5. Zijun Luo & Yonghong Zhou, 2016. "Gainers and Losers of Political Instability: Evidence from the Anti-Japanese Demonstration in China," Working Papers 1608, Sam Houston State University, Department of Economics and International Business.
    6. Martin Hess & Neil M Coe, 2006. "Making Connections: Global Production Networks, Standards, and Embeddedness in the Mobile-Telecommunications Industry," Environment and Planning A, , vol. 38(7), pages 1205-1227, July.
    7. Bathelt, Harald & Li, Pengfei, 2020. "Processes of building cross-border knowledge pipelines," Research Policy, Elsevier, vol. 49(3).
    8. Mingrui He & Min Mei & Handan Zhang, 2024. "Evolutionary Stages and Paths of Innovation Networks in Industrial Clusters: Case Study of Nanchong Silk-Spinning Garment Industry Cluster (SSGIC)," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1703-1735, March.
    9. Kibar, Samet, 2020. "Eine ökonomisch theoretische Analyse der Konzeption und Legitimation staatlicher Clusterförderung," Arbeitspapiere 191, University of Münster, Institute for Cooperatives.
    10. Martin Hess & Henry Wai-Chung Yeung, 2006. "Whither Global Production Networks in Economic Geography? Past, Present, and Future," Environment and Planning A, , vol. 38(7), pages 1193-1204, July.
    11. Zijun Luo & Yonghong Zhou, 2020. "Decomposing the effects of consumer boycotts: evidence from the anti-Japanese demonstration in China," Empirical Economics, Springer, vol. 58(6), pages 2615-2634, June.
    12. Jun Lin & Steven Si, 2010. "Can guanxi be a problem? Contexts, ties, and some unfavorable consequences of social capital in China," Asia Pacific Journal of Management, Springer, vol. 27(3), pages 561-581, September.
    13. Philip Müller & Martin Franz, 2019. "Transnational labour migration and the offshoring of knowledge-intensive business services within global production networks: The case of a German automotive company in Turkey," Environment and Planning A, , vol. 51(6), pages 1350-1369, September.
    14. Matthias Pilz & Martina Fuchs & Junmin Li & Lena Finken & Johannes Westermeyer, 2023. "Similar or Different Training Cultures? German and Chinese Companies in Their Home and Host Countries," Societies, MDPI, vol. 13(5), pages 1-17, May.
    15. Akçomak, Ibrahim Semih & Bürken, Serkan, 2019. "The middle-technology trap: The case of the automotive industry in Turkey," MERIT Working Papers 2019-006, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Jan van der Borg & Erwin van Tuijl, 2011. "Upgrading of Symbolic and Synthetic Knowledge Bases: Analysis of the Architecture, Engineering and Construction industry and the Automotive Industry in China," Working Papers 2011_25, Department of Economics, University of Venice "Ca' Foscari".
    17. Markus Hassler, 2009. "Variations of Value Creation: Automobile Manufacturing in Thailand," Environment and Planning A, , vol. 41(9), pages 2232-2247, September.
    18. Nam, Kyung-Min, 2015. "Compact organizational space and technological catch-up: Comparison of China's three leading automotive groups," Research Policy, Elsevier, vol. 44(1), pages 258-272.
    19. Harald Bathelt & Sebastian Henn, 2014. "The Geographies of Knowledge Transfers over Distance: Toward a Typology," Environment and Planning A, , vol. 46(6), pages 1403-1424, June.
    20. Manning, Stephan, 2013. "New Silicon Valleys or a new species? Commoditization of knowledge work and the rise of knowledge services clusters," Research Policy, Elsevier, vol. 42(2), pages 379-390.
    21. Hervas Oliver,Jose Luis & Gonzalez,Gregorio & Caja,Pedro, 2014. "Clusters and industrial districts: where is the literature going? Identifying emerging sub-fields of research," INGENIO (CSIC-UPV) Working Paper Series 201409, INGENIO (CSIC-UPV).
    22. Yuanyuan Wan & Gang Zeng & Jiawei Wang & Lin Zou, 2025. "‘Buzz-and-Pipeline’ Dynamics in AI Innovation Network: A Case Study of Zhangjiang National Innovation Demonstration Zone, Shanghai," Land, MDPI, vol. 14(1), pages 1-18, January.
    23. Julian Schwabe, 2020. "From “obligated embeddedness” to “obligated Chineseness”? Bargaining processes and evolution of international automotive firms in China's New Energy Vehicle sector," Growth and Change, Wiley Blackwell, vol. 51(3), pages 1102-1123, September.
    24. Yijia Chen & Robert Hassink, 2019. "Multi-scalar knowledge bases for new regional industrial path development: Toward a typology," PEGIS geo-disc-2019_10, Institute for Economic Geography and GIScience, Department of Socioeconomics, Vienna University of Economics and Business.

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