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Anatomy of cluster development in China: the case of Health Biotech Clusters

Marcus Conlé (Mercator School of Management, University of Duisburg‐Essen, Duisburg, Germany and Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, Germany)
Markus Taube (Department: Mercator School of Management, University of Duisburg‐Essen, Duisburg, Germany)

Journal of Science and Technology Policy in China

ISSN: 1758-552X

Article publication date: 20 July 2012

1103

Abstract

Purpose

The purpose of this paper is to analyze the dynamics of China's health biotech clusters from an interregional perspective. By treating clustering as the result of firms' localization choices, the paper examines whether and why different types of firms agglomerate in the various locations.

Design/methodology/approach

The paper employs a demographic approach that is inspired by the 2006 work of Romanelli and Feldman on cluster development in the USA. It categorizes China's clusters based on differences in the degree of policy support and the nature of the science base. Then, it draws a sample of 75 of China's most visible firms and analyses them in terms of entrepreneurial origin, their location and, if applicable, the location of their subsidiaries. By matching types of firms with types of clusters, the paper highlights some characteristics of China's regional development.

Findings

Studies on China's high‐tech agglomerations unanimously complain about a lack of “creative buzz” compared to the vibrant clusters of for example, the Bay Area in the USA. The analysis indicates that the lack of a creative culture is associated with the anatomy of cluster development. China's clusters grow to a significant extent by attracting enterprise subsidiaries to their sites. The authors argue that these particular cluster anatomies are founded on China's capital market. As the capital market is not prepared to provide pre‐revenue firms with sufficient funds, firms have to earn revenue quickly in order to ensure their viability. Therefore, they concentrate on building up manufacturing capacity and exploiting given technologies. The main point is that local governments as major providers of financial support are instrumental in this process. The establishment of manufacturing subsidiaries in various locations rests on the rationale of collecting funds. This leads to the conclusion that national capital markets either reinforce or inhibit clustering depending on how much it allows the mobility of financial capital. Local government funds do not travel far. This has an impact on the firms' localization decisions and their business strategies, which, in turn, affects the “culture” inside the clusters.

Research limitations/implications

This argument is based on a limited number of interviews conducted by the authors or other researchers. In order to corroborate the link between the capital market and local development trajectories, more evidence needs to be collected via interview surveys and other means to extract financial information.

Originality/value

Unlike other research on Chinese clusters, this paper offers an interregional perspective based on a demographic approach. The argument is original in linking regional cluster dynamics with the national institutional set‐up.

Keywords

Citation

Conlé, M. and Taube, M. (2012), "Anatomy of cluster development in China: the case of Health Biotech Clusters", Journal of Science and Technology Policy in China, Vol. 3 No. 2, pp. 124-144. https://doi.org/10.1108/17585521211256982

Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

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