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ESCP-EAP Working Paper No. 27 September 2007

The Value Adding Web A Multi-level Framework of Competitive Advantage Realisation in Firm-Clusters Kerry Brown, John Burgess Marion Festing, Susanne Royer Charlotte Steffen, Jennifer Waterhouse

Corresponding author: Prof. Dr. Marion Festing Chair of Human Resource Management and Intercultural Leadership ESCP-EAP European School of Management Berlin Heubnerweg 6 14059 Berlin T: ++49(0)30 / 32007 153 F: ++49(0)30 / 32007 189 [email protected]

Editor: ESCP-EAP European School of Management Berlin Heubnerweg 6 14059 Berlin T: ++49(0)30 / 32007 147 F: ++49(0)30 / 32007 108 [email protected] www.escp-eap.de

ISSN: 1619-7658

ABSTRACT Clusters have emerged as an industrial organisational form recognised as having a superior ability to foster economic development and growth than that of single firms operating in isolation. However, there is little agreement about the way to define clusters and their determinants, establishing the antecedents of cluster formation and the appropriate analytic tools for clusters. Based on these research deficits, this paper suggests a new way to define clusters as value adding webs and establishes a way of determining an appropriate set of descriptors, which enables analysis of competitive advantage of single firms in clusters. Starting from the value adding web definition, the authors further suggest a multi-level analytic framework. Within this framework, three levels of analysis are considered: the context-level (the location of the value adding web located and the resources within the identified context), the web-level (the actors acting in the value adding web and their interconnections), and the firmlevel (the resources and their location in the single firms) in the value adding web). Based on the resource-based view the possible rent generation in a value adding web is discussed considering contextual rents (context level), relational rents and inbound and outbound spillover rents (web level) as well as Ricardian, quasi and monopolistic rents (firm level).

KEY WORDS Cluster; value adding web; competitive advantage; resource-based view, rent creation and appropriation; location.

ACKNOWLEDGEMENTS We are grateful to the Australian Research Council (ARC) support of the project by granting the ARC International Linkage Award and the German Academic Exchange Service (DAAD) for further funding of the international research project. Furthermore, the authors would like to thank the participants of the DIMEWorkshop on “Agglomeration and Growth in Knowledge-based Societies” in Kiel/Germany in April 2007 as well as the participants of a Research Seminar at the University of Lodz/Poland in June 2007 for valuable comments.

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Contents 1 2

Introduction ................................................................................................. 4 Reviewing the Cluster Literature ................................................................. 5 2.1 Defining ‘Clusters’ ................................................................................ 5 2.2 Dominating Theoretical Perspectives in Cluster Research ................ 10 3 Clusters as Value Adding Webs................................................................ 19 4 Towards a Framework of Competitive Advantage Realisation in Value Adding Webs............................................................................................. 22 4.1 The Resource-based View in the Context of Value Adding Webs ..... 22 4.2 A Resource-based Multi-level Analysis of Value Adding Webs.......... 24 5 Concluding Remarks ................................................................................. 28 References ....................................................................................................... 30 Authors’ Profiles ............................................................................................... 35

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1

Introduction

In recent times the term cluster has emerged as a widespread concept used extensively when considering the role of industrial advancement in regional development and globalisation (e.g., Organisation for Economic Cooperation and Development (OECD) 1999, 2001, 2005; European Commission 2002). The interest in clusters is often linked to the many promises connected to clusters including economic and industrial growth, regional development, job creation and greater competitiveness. Many cluster activities are supported financially by national governments, the European Union (EU) or other public institutions. Thinking about clusters within the economy seems axiomatic in the 21st century or, as Martin and Sunley (2003: 6) put it: “Clusters, it seems, have become a world-wide fad, a sort of academic and policy fashion item.” This prevalence is reflected in the wide variety of cluster definitions. A major research gap in the area of clusters is a lack of consensus about the accepted elements to be included in a definition of the term ‘cluster’. Many contributions in the field of cluster research conclude with implications for policy makers in relation to ways to foster clusters or cluster-development (e.g., Bresnahan, Gambardella, and Saxenian 2004, Feldman and Francis 2004, Maskell 2005). However, questions of value creation and the role of single firms as parts of clusters are less central in the literature. Cluster developers and cluster managers are often confronted with the problem that firms frequently do not participate fully in cluster activities for fear that competitors will obtain access to firm-specific information that confers individual competitive advantage. Consequently, a second deficiency is that the overall competitiveness of clusters is often analysed while the competitive advantages of the single firm in a cluster are overlooked. It is argued that a clear cluster definition will establish a platform from which to better understand the ways that single firms within clusters operate and derive competitive advantage. Due to the identified research gaps the following research questions are posed: What are the defining elements of a cluster in terms of value creation?

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What would be an appropriate framework to understand and explain a single firm’s contribution to value creation in clusters? This paper firstly provides a review of theoretical and empirical studies on clusters as the basis for the development of a new definition of clusters. Building on this definition, a path for a future research agenda investigating the achievement of competitive advantage from the single firm perspective is outlined. A preliminary conceptual framework based on the resource-based view of the firm (e.g., Peteraf 1993, or Collis and Montgomery 1997) is suggested. The reasoning of the resource-based view (RBV) is hereby transferred from the level of the individual firm to the level of the entire cluster and extended by additional insights from other concepts such as network and location analysis. A three-level framework is proposed. One level focuses on the context-specific resources of clusters. The second level concentrates on web-specific resources regarding the relationships between the different actors of the value adding web. The third level is the level of the single firm, where firm-specific resources are the focus of analysis. For all levels we suggest rent generating opportunities. Findings indicate that a cluster is more adequately defined as a value adding web. Finally, it is concluded that the proposed three level framework offers a coherent mode of categorising and analysing cluster operations and outcomes.

2 Reviewing the Cluster Literature The literature review is organised in two parts. First the cluster definitions are outlined and second, the dominant theoretical perspectives in cluster research are discussed.

2.1

Defining ‘Clusters’

The term ‘cluster’ is used in a very broad sense in many different contexts and has become very popular in recent years. Porter’s (1998a, 2000) influential work describes the cluster phenomenon as a paradox: Theoretically, the role of locations in global competition should decline, however this has not been the case. In contrast, clusters are viewed as a means to attract firms to certain regions. Where it is possible to establish a cluster by attracting firms to locate in a

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cluster and participate in cluster activities, it is argued that positive effects will spillover to the whole region in terms of job creation, higher purchasing power and other benefits of increased economic activity. This view on clusters is discussed extensively by researchers and it is the perspective often adopted by politicians and regional economic developers. Conversely, however, it can also be argued that the firms themselves engage in clusters because they expect competitive advantages. From the cluster literature it is obvious that the term cluster is not clearly defined. Some analyses of clusters do not provide a precise definition for the term (e.g., Audretsch and Feldman 1996, Austrian 2000, Colgan and Baker 2003, Dahl and Pedersen 2003, Tracey and Clark 2003) relying instead on a presumed common understanding of the term. Many other authors build on Porter’s cluster concepts, but move into areas that do not constitute a cohesive approach to clusters. Indeed, Porter (1990, 1998a, 1998b, 2003) offers various competing definitions although he concentrates on clusters and (industry) competitiveness, which is of special interest from a strategic management point of view. Table 1 lists Porter’s definitions as well as definitions developed by other authors who build on his work. The definitions and their development over time demonstrate how difficult it is to find a systematic solution for this challenge.

Porter 1990: 131 and 148/149

Porter defines clusters as “consisting of industries related by links of various kinds”. The “diamond” model is proposed as providing the source of locational competitive advantage that “promotes the clustering of a nation’s competitive industries … usually linked through vertical (buyer/supplier) or horizontal (common customers, technology, channels, etc) relationships.”

Porter 1998a: 78

Porter re-confirms the geographically proximate nature of firms in a cluster and that cluster participants are “interconnected companies and institutions in a particular field”. Porter extends the participant limits however by proposing that “many clusters include governmental and other institutions – such as universities, standards-setting agencies, think tanks, vocational training providers, and trade associations – that provide specialized training, education, information, research, and technical support”.

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Porter 1998b: 197/198

Porter further formalises the extension of cluster participants by defining clusters as “geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also cooperate”. Building on this definition, Porter describes clusters as “critical masses of unusual competitive success” thereby supporting earlier contentions regarding the competitive advantage to be gained through clustering.

Porter Porter starts with the same definition of a cluster as in 1998b but con2000: 15/32 cludes by identifying that clusters are also concentrations of specialised skills and knowledge. Building on the competitive advantage argument of earlier papers, Porter further posits “proximity in geographic, cultural, and institutional terms allows special access, special relationships, better information, powerful incentives, and other advantages in productivity and productivity growth that are difficult to tap from a distance”. These highlighted elements add an ‘intangible’ component to what constitutes a cluster. Porter 2003: 562

Porter extends the definition by broadening the ‘externalised’ dimension of clusters beyond just geographical proximity: “We define a cluster as a geographically proximate group of interconnected companies, suppliers, service providers and associated institutions in a particular field, linked by externalities of various types.” Porter identifies different types of industries associated with clusters, namely (1) local industries that operate at a local level and do not compete in any large way with industries outside the direct local area; (2) resource dependant industries that are located in close proximity to the resources they need to operate and (3) traded industries – these are not resource dependant and trade (usually services) across regions and often to other countries. Porter identifies the relative economic benefits to be gained in terms of each type of industry.

Andersen 2006: 102

Andersen concurs with Porter’s earlier definition, yet describes clusters in terms of “regional clusters” which may suggest non-regional clusters: “In organizational terms, a regional cluster is a production system, configuring and governing a local set of input-output relations with a widespread and complementary division of tasks.”

Dalum, Pedersen & Villumsen 2002: 7

In Dalum et al. (2002) there is again an undeveloped assumption of different types of clusters: “A regional cluster is a geographically concentrated group of firms and related organisations active in similar or closely connected technologies. The firms are interconnected by formation of specialized local labour markets and institutional set-ups.”

Waits 2000: Geographic proximity and interdependencies are reiterated by Waits 37 (2000). Rather than identifying “regional clusters” as Andersen (2006) and Dalum et al. (2002) above, Waits provides a definition of “industry clusters”: “These industry clusters are geographical concentrations of competitive firms in related industries that do business with each other and that share needs for common talent, technology, and infrastructure.”

Table 1:

The Development of the Concept of Clusters Based on the Work of Porter (emphases added).

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The main components used by Porter to describe a cluster in these definitions are: (1) geographic concentration, (2) interconnection of companies and institutions, (3) presence of both competition and cooperation, and (4) specialisation. One critical point, however, is that the boundaries of a cluster are often not considered when defining the term. The expression “geographic scope” as used by Porter is quite broad and can range “… from a region, a state, or even a single city to span nearby or neighbouring countries (e.g., southern Germany and German-speaking Switzerland)” (Porter 2000: 16). The problems of identifying cluster boundaries are compounded by the porous nature of the cluster. Clusters are made up of interconnected activities that may not fit within easily discernable sectors. Cluster boundaries are therefore not obvious and different interpretations of such boundaries may exist. Porter states that a “creative process” (Porter 2000: 17) takes place when cluster boundaries are drawn. Within this context it also needs to be noted that other authors use the spatial dimension for defining the boundaries of a cluster (e.g., a maximum range of 50 miles is favoured by May, Mason and Pinch 2001). However, such absolute criteria cannot grasp the many dimensions of a cluster. For example, a distance of 50 miles may not be significant in a rural area, but in an urban area it may not be considered geographically close. Porter’s definitions, their development over time and the framework for analysing clusters have been criticised by many authors (Martin and Sunley 2003, Desrochers and Sautet 2004, Cooke 2006). One critical aspect is the geographic flexibility of the definition, or as Cooke (2006:7) describes it “… the cluster definition stretches alarmingly from the local to the national and back again with bewildering facility.” Furthermore, the boundaries of a cluster, not only from a geographic perspective, but also in terms of industrial groupings are not clearly defined (Martin and Sunley 2003: 10). The imprecise definition of cluster boundaries and the openness of the definition have led to a widespread use of the term (Desrochers and Sautet 2004: 236). In Table 2 cluster definitions are summarised, which differ from Porter’s perspective.

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Author(s)

Definition

Czamanski & Ablas 1979: 62

“In what follows ‘cluster’ means a subset of industries of the economy connected by flows of goods and services stronger than those linking them to the other sectors of the national economy. The concept is thus devoid of any spatial connotation.”

Rosenfeld 1996 (quoted in Rosenfeld, 1997, p.10)

“A geographically bounded concentration of interdependent businesses with active channels for business transactions, dialogue, and communications, and that collectively shares common opportunities and threats.”

Rosenfeld 1997: 4

“A ‘cluster’ is very simply used to represent concentrations of firms that are able to produce synergy because of their geographic proximity and interdependence, even though their scale of employment may not be pronounced or prominent.”

Feser & Bergman 2000: 3

“We use the term ‘industrial cluster’ in the same generic sense as Czamanski and Ablas to refer to a specific constellation of linked firms, but prefer ‘regional cluster’ to connote the presence of such an industrial cluster in some specific spatial context.”

Hill & Brennan 2000: “We define a competitive industrial cluster as a geographic 67 concentration of competitive firms or establishments in the same industry that either have close buy-sell relationships with other industries in the region, use common technologies, or share a specialized labor pool that provides firms with a competitive advantage over the same industry in other places.” Bresnahan, Gambar- “We define a regional cluster simply as a spatial and sectoral della & Saxenian concentration of firms; and we measure success by the ability of 2001: 836 the cluster as a whole to grow, typically through the expansion of entrepreneurial start-ups.” Ketels, 2003: 3/4

While Ketels adopts Porter’s views in regard to the competitive advantages to be gained from geography, unlike Porter, Ketels begins to elucidate the relationship between cluster members. This relationship is identified as one of interdependency: “groups of companies and institutions co-located in a specific geographic region and linked by interdependencies in providing a related group of products and/or services. “

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Maskell 2005: 4181

Table 2:

“The proposition put forward here simply suggests that the cluster exists because of locational economies that are largely independent of the internal degree of interaction. The sole requirement is that many firms undertaking similar activities are placed in circumstances by co-locating where they can monitor each other constantly, closely, and almost without efforts or costs.”

Extended Cluster Definition (emphases added).

Table 2 indicates that many different contexts are connected to the term cluster. Clusters are subdivided into terms like regional cluster, innovative cluster or industrial cluster. From the findings of the definition review, it becomes obvious that there are different approaches to deal with geography in the field of cluster research. Bresnahan et al. (2001) excluded geography as a necessary element for defining a cluster. Maskell (2005) suggested geography merely provides necessary resources and an opportunity to monitor other firms’ performance rather than there being any particular competitive advantage to be gained from co-location. What these definitions highlight, however, is the under-development of the concept of clusters. Consequently, there is a need to develop a definition for the term cluster, which is appropriate with respect to the research goal pursued in this study.

2.2

Dominating Theoretical Perspectives in Cluster Research

The numerous definitions show how difficult it is to systematise cluster research. According to Maskell and Kebir (2006: 34-37) the major research areas associated with cluster analysis are local spillovers, competitiveness and, the region and its development. In the following discussion these three research areas are briefly characterised. Contributions with a focus on local spillovers are rooted in Marshall’s (1919) work on ‘industrial districts’. The focus here is on the district in which a firm acts and on the influences of the market. The contributions by Michael Porter and

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Maskell (2005) suggests that a cluster consists of vertical actors (business partners and collaborators) and horizontal actors (rivals and competitors). This leads him to the conclusion that the boundaries of a cluster are “….defined by the fit between the economic activities carried out by the related firms of the cluster on the one hand and the particular institutional endowment developed over time to assist these activities on the other” ( Maskell 2005: 420).

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other scholars in this area centre around competitiveness. The relationship between cluster and region has been at the forefront of most definitions and investigations of the competitive advantages achieved through clustering. The most often used tool for analysis is the diamond approach offered by Michael Porter. Porter’s (1990) concept identifies fundamental forces that underlie the competitive advantage of nations. He confines the diamond to the analysis of the relationship between a particular geographic area and the cluster(s) operating within it. According to Porter (1990) the forces outlined in Figure 1 have to be analysed to determine the competitive advantage that can be sourced from operating within a particular location:

Context for Firm Strategy and Rivalry

Demand

Factor (Input) Conditions Factor (input) quantity and cost Natural, human, capital resources, physical, administrative, information, scientific and technological infrastructure Factor quality Factor specialization

A local context that encourages appropriate forms of investment and sustained upgrading Vigorous competition among locally based rivals

Conditions Sophisticated and demanding local customer(s) Customers’ needs that anticipate those elsewhere

Related and Supporting Industries

Unusual local demand in specialized segments that can be served globally

Presence of capable, locally based suppliers Presence of competitive related industries

Figure 1:

Porter’s Diamond: Sources of Locational Competitive Advantage (based on Porter 2000: 20).

Porter (2000: 21) argues that advantages to be obtained from clusters “rest on economies or spillovers across firms, industries, and institutions of various sorts”. These spillovers occur both internally to the cluster and externally to the

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region in which a cluster operates. Porter (2003) examined the beneficial external effect of clusters on districts through a consideration of the types of industries within certain regions. Porter (2000) argues that clusters affect competition within a region in different ways. Firstly, clusters increase the productivity of firms or industry. Secondly, the capacities for innovation and productivity growth of the actors are increased. Thirdly, entrepreneurship is fostered and with that the size of the cluster grows due to the inclusion of new firms. Therefore, in contrast to those studies that have examined the external regional effects of and on clusters, Porter’s approach considers the internal economic benefits of clusters to organisations operating within its boundaries. Other studies investigate the internal operation of clusters such as communication flows in a cluster (e.g., Dalum, Pedersen and Villumsen 2002). An often-used tool for the graphic presentation of a cluster is the cluster map. In such maps a cluster is presented systematically and the relationships between the cluster actors are outlined (Austrian 2000). Only a few approaches have brought together the external context with the internal operations of clusters. As an example the “innovative milieu approach” mainly developed by a group of French researchers (Groupe de Recherche Européen sur le Milieux Innovateurs (GREMI)) focuses on similarities among successful innovative regions and on the causes of different regional innovation capabilities. Regional networks and socio-cultural factors are analysed. The innovative milieu is defined as “… the set or the complex network of mainly informal relationships on a limited geographical area, often determining a specific external ‘image’ and a specific internal ‘representation’ and sense of belonging, which enhance the local innovative capability through synergetic and collective learning processes” (Camagni 1991: 3). These contributions belong to the third above-mentioned category (cluster/region) (Maskell and Kebir, 2006). Table 3 systematises studies in the field of cluster research with regard to their focus, their empirical foundation as well as the associated findings and conclusions. Not included are the contributions by Porter which are explained in detail above and the articles which review and criticise the current cluster literature (e.g., Ketels 2003, Martin and Sunley 2003, Desrochers and Sautet 2004, Cooke 2006). 12

Author/Year/Title Audretsch and Feldman 1996: Innovative Clusters and the Industry Life Cycle Enright 1999: Regional Clusters and Firm Strategy

Focus of the Study •

• • • • •

Empirical Foundation

Main Findings

Stage of the Industry Life Cycle shapes the • geographic link between knowledge inputs and • outputs (cf. p.254) Location of innovative activity

States of the USA as unit of observation Regression analysis, including the following variables: (1) Transportation costs, (2) Natural resources, (3) Scale economies, (4) R&D, (5) Skilled labour

•

“… propensity for innovative cluster to spatially cluster is certainly shaped by the stage of the industry life cycle.” (p.271)

Linking cluster literature and firm-strategy literature Resources, activities and regions Resource-based and activity-based views of clusters Impact of clusters on firm strategy

Literature-based research

•

Further research on clusters and firm-strategy an on the optimal level of cooperation and competition within clusters is needed Further research on how knowledge, which was gained via the cluster, can be transferred to external firm-branches Important and valuable resources for a firm can be found in a cluster Activities are shared among firms within a cluster Firm-strategy choices are influenced by a cluster

•

•

• • • Feser and Bergman 2000: National Industry Cluster Templates: A Framework for Applied Regional Cluster Analysis

Table 3:

• •

•

Input/ Output – Linkages (I/O-Linkages) Developing a model that helps identify existing and potential clusters in US sub-regions (cf. p. 2) Three objectives: (1) derive a set of clusters based on the most significant linkages as revealed in the I/O data matrix, (2) identification of a set of mutually exclusive clusters, (3) investigation of the linkages both between clusters and between industries within each cluster (cf. p. 4)

•

Secondary data obtained from detailed 1987 benchmark US input-output accounts of the manufacturing sector in North Carolina, USA

•

•

Multiple analyses with alternative assumptions regarding the number of rotated factors

•

A Review of Cluster Literature (contd.).

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Resulting information provide a useful tool for designing regional development strategies to foster synergies created through inter-industry collaborations Further analysis needed to prove the model

Author/Year/Title Hill and Brennan 2000: A Methodology for Identifying the Drivers of Industrial Clusters: The Foundation of Regional Competitive Advantage

Austrian 2000: Cluster Case Studies: The Marriage of Quantitative and Qualitative Information for Action


• •

Identifying the industries in which a region has its greatest competitive advantage with the help of the industrial drivers of a region.

Cluster case study Recommendations for the presentation of cluster maps.

Empirical Foundation •

Combination of cluster analysis and discriminant analysis using variables derived from economic base theory and measures of productivity (cf. p. 65)

•

Identification of the industrial drivers of a region as comprising of the following variables: (1) measures of competitiveness, (2) indicators of export orientation (exporting to any location outside the region), (3) measures of centrality in the regional economy, and (4) employment specialization.

• •

Embedded, year-long study Case study-analysis; based on (1) Descriptive data analysis, (2) Literature review, (3) Faceto-face and telephone interviews with cluster leaders Comparison of cluster maps used in literature

• Waits 2000: The Added Value of the Industry Cluster Approach to Economic Analysis, Strategy Development, and Service Development

•

• •

Cluster-based economic analysis and strategy development with the focus on “newer” developments Benefits of this approach Clusters as analytical, organizational and service delivery tools (cf. p. 39)

• •

Main Findings • •

•

• •

Literature review • Case study on clusters in Arizona, USA, where state-driven cluster activities take place •

• • •

Table 3:


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Six characteristics of driver industries “Foundational clusters” are suppliers to other clusters, far from the end users, relationships are dominated by forward linkages Focussing on the existing economic base in a region

If a cluster map is accepted, it shapes the internal and external cognition of the cluster Recommendations how to picture a cluster

cluster working groups can bring politicians and the industry together there is no “masterplan” for local governments/ states how to combine policy tools and cluster strategy, only guidelines are available clusters of world-class firms in related industries are the source of economic development policy must face the industry-reality industry should participate actively in cluster programs

Author/Year/Title Bresnahan, Gambardella and Saxenian 2001: ‘Old Economy’ Inputs for ‘New Economy” Outcomes: Cluster Formation in the New Silicon Valleys

Focus of the Study • •

Which forces create new clusters of entrepreneurship-led growth? Early foundations and future elements for the success of clusters.

Empirical Foundation • •

International comparative cluster analysis. Analysis of the effects on cluster outcomes of (1) highly skilled technical labour, (2) managerial labour, (3), new firm formation and firm building, (4) connection to markets

Main Findings •

• • Cortright 2002: • The Economic Importance of • Being Different: Regional Variations in Tastes, Increasing Returns, and the Dynamics of Development

Table 3:

Establishment of clusters Social/behavioural influences on cluster establishment

•

•

Comparison of regional population characteristics: (1) Entrepreneurship and risk taking, (2) Tolerance for new ideas, (3) Differences in tastes and behaviour Aim is to show how behaviour and distinctions (1) influence the demand and supply for goods and services, and (2) the business culture


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• •

•

“… it is an error either to focus only on the external effects and conclude that new economy logic supersedes old, or to conclude that there is nothing to the positive-feedback external effects story at all. Instead, in the construction and maintenance of successful clusters, the new economy and old economy elements act as complements to one another; neither one can succeed without the other.” (p.841) Growth of firms is not naturally connected to the rise of a cluster Growth of companies, not the number of firms, is a signal of the success of a cluster (cf. p. 850) Development of knowledge forces economic growth Knowledge creation processes differ from area to area and are influenced by regional culture and institutions Social and behavioural aspects should be included in the models of cluster research

Author/Year/Title

Focus of the Study

Steinle and Schiele 2002: • When do Industries Cluster? A • Proposal on how to Assess an • Industry’s Propensity to Concentrate at a Single Region or Nation

Clustering Advantages of clustering Network innovation

Tracey and Clark 2003: Alliances, Networks and Competitive Strategy: Rethinking Clusters of Innovation Dahl and Pedersen 2003: Knowledge Flows Through Informal Contacts in Industrial Clusters: Myths or Realities?

Influences of network structure on innovation Influences of geography on alliances

• •


•

•

Main Findings

Literature based research Necessary conditions for clustering: (1) Divisibility of process, (2) Transportability of the final product Sufficient conditions for clustering: (1) Long value-chain, (2) Diversity of competencies, (3) Importance of innovation, (4) Volatility of market

• •

Conditions must be tested “In the following situation, a high probability of clustering would be expected: the product or service can be divided into several steps of production (divisibility of process), is universally applicable and has low costs of transportation (transportability of product). Its components are produced in different processes (long valuechain with distinct competencies). Demand is constantly being satisfied with new variations of the product, which is manufactured by continuously improved methods (networkinnovations). Finally, the market requires fast reactions to unpredictable changes in customers’ demand (market volatility). If all or most of these features apply to the industry a particular company belongs, it should closely monitor how far clustering has already taken place and how it can profit from this evolution (a method for doing so is presented in Schiele (1999, 2001)).” (p.855/856)

Literature based research

•

networks must be flexible to solve problems, to innovate and to be competitive networks need to “… ‘learn how to learn’ on a collective basis.” (cf. p.9)

•

• •

Importance and extent of informal networks in clusters Informal contacts as knowledge source

• •

Questionnaire Study Communications cluster in Northern Denmark (NORCOM)

•

• •

Table 3:


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Informal contacts are an important source of knowledge (both “business knowledge” and “more private knowledge”) Contracts limit external communication and with that limit cluster development Informal networks are an important source for entrepreneurs

Author/Year/Title Colgan and Baker 2003: A Framework for Assessing Cluster Development


Capturing both the internal and external characteristics of a cluster with the help of a “criteria catalogue” (eight-element framework)


Main Findings

• Case Studies Qualitative and interpretative analysis Based on a literature review and on interviews with firms and institutions an eight elementframework to analyse a cluster is developed: (1) Innovation, (2) Regional Business Functions, (3) Entrepreneurship Objectives, (4) • Financing, (5) Relationships, (6) Locational Advantage, (7) Market Potential, and (8) Lead • Industry Group Growth • •

Feldman and Francis 2004: Homegrown Solutions: Fostering Cluster Formation

• • • •

Table 3:

Entrepreneurship, clusters and cluster development Importance of small firms for cluster development The needs of small firms The actions required by state governments to “promote entrepreneurship and firm growth and, thus capture the benefits of the knowledge-based economy” (p.128)

• • •

Literature review Case studies on cluster development Differentiation of three general stages in the formation of an entrepreneurial environment: (1) initial stage, (2) formation of the cluster, and (3) establishment of a critical mass of resources.


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• •

Eight-element framework is a fruitful instrument to answer the “most important question about clusters: What is their ultimate effect on the regional economy?” depends on the cluster characteristics and the economic past and future performance (cf. p. 364). Four types of clusters can be identified: stars, potential stars, the base, seeking direction Traditional industries can be analysed with the provided framework, too Framework helps to identify clusters (or if it is just an agglomeration of industries) Helps to advice policy Policy should reorient towards the need of entrepreneurs and small firms “One key component of the new regional development strategies is the recognition of the importance of entrepreneurship and the potential in homegrown industries. Instead of relying on attracting successful firms from other regions through financial incentives, the new strategies focus on providing a hospitable environment for entrepreneurs to create new firms.” (p.135)

Author/Year/Title Feldman, Ahoronson and Baum 2005: The importance of Proximity and Location

Focus of the Study • •

Importance of proximity and location to knowledge based activity Firm- and Cluster-Level

Empirical Foundation •

•

Quantitative research (model is not explained in more detail); longitudinal dataset of the Canadian biotechnology industry from 19912000 with firm level information Clusters are identified empirically by the distance among the biotechnological firms (using firm addresses)

Main Findings •

•

• Maskell 2005: Towards a Knowledge-Based Theory of the Geographical Cluster

Folta, Cooper and Baik 2006: Geographic Cluster Size and Firm Performance

• • •

• • •

Table 3:

Knowledge creation in clusters? (cf. p. 412) Investigation of the nature of the cluster when knowledge creation becomes key (cf. p. 412) The advantages of clustering over single firm activity. “This is arguably the single most important question for understanding the existence of the cluster, yet largely ignored in the conversation on the subject.” (p. 415)

Implications of location for technically oriented firms Relationship between cluster size and organizational performance The nature of the relationship between cluster size and firm performance (if any).

• •

• •

• • •

Literature based research Following Richardson’s dichotomy (1972), distinguishing horizontal and vertical dimensions of a cluster Vertical dimension: business partners and collaborators Horizontal dimension: rivals and competitors

Quantitative analysis Private and public biotechnological firms, data from 1973-1998 (USA) Hypotheses testing

A Review of Cluster Literature.

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•

•

• • •

The firm’s ability to capitalize on available spillovers determines the benefits a firm derives from locating in a cluster “Our findings indicate that the balance of spillover seeking and expropriation avoidance depends importantly on the internal dynamics of the cluster. […]Clusters are more than simply geographically concentrated collections of firms. The internal organization and demography of clusters matters to their dynamics. Our findings highlight the importance of technological specialization.” (p.8/9) Showing future research directions Explanation of the existence of a cluster, for the growth of a cluster must be included in an economic cluster-theory and the boundaries of a cluster should be identified by it “More specifically, the theory must provide an explanation for the advantages that many related and co-localized firms might accrue but that are not available to a hypothetical single firm carrying out precisely the same activities, even if at the same location, using the same suppliers, customers, and workforce.” (p.423) Growth of a cluster has positive effects on entrepreneurship/entrepreneurs Benefits decline when the cluster is large Competitive strategies of firms must be adjusted to the dynamic environment

As demonstrated in Table 3, cluster research has been extensive and has generally sought to identify the nature of the economic relationship between a cluster and its geographic location, the necessary elements that constitute a cluster, the means to measure the inputs and outputs of clusters, and how to define the boundaries of clusters. Additionally, the connectedness in relation to the internal machinations of clusters and the external relationships of clusters with their environment has been analysed in terms of firm to firm relationships within a cluster, cluster to industry relationships as well as cluster to location relationships. Thus, cluster research can be organised into two broad categories – those studies that focus on the internal operations of clusters and those approaches that examine how clusters influence and are influenced by their environment. The focus has predominantly been on economic factors, i.e., how clusters with their array of internal and external relationships impact on local economies. Due to the economic focus it can be concluded that most cluster research seeks to locate implications for public policy. This is evident in the policy recommendations of Feser and Bergman (2000) and Porter (2003) who propose micro-economic policy frameworks at the regional level to complement macro-economic policies at both the national/industry and international levels. Likewise, Feldman and Francis (2004) propose policy implications for clusters; however, their recommendations aim at the individual firm level. Policy makers have been the main targets of cluster research and less attention has been paid to the implications for individual firms, their owners, managers and employees. In the following section research gaps resulting from this analysis are further specified and addressed.

3

Clusters as Value Adding Webs

The literature review revealed gaps in cluster research. The single firm is usually neglected in the definition of a cluster. In addition, the individual firm is not often considered in the analysis of clusters and largely ignored in relation to the implications of cluster research. Furthermore, the cluster definitions as well as the definitions of cluster boundaries are very flexible and almost every geographic dimension is used to identify cluster boundaries. Therefore, building on the literature review a new definition of clusters is developed that explicitly takes the perspective of the single firm with regard to value creation 19

into account. Traditional means of defining clusters and their boundaries have tended to focus on geographic or industrial characteristics. While these elements remain central characteristics of clusters, the new definition considers the connectivity of individual firms on different levels in a cluster. From this perspective a cluster can be called a value adding web, understood as a series of linkages between single firms in a defined surrounding, i.e., the extent of the arena in which the actors add value. The actors in a cluster can be categorised into horizontal, vertical and lateral actors. In summary, these considerations lead to the following definition of the cluster: A cluster is a value adding web constituted by a connection of horizontal, vertical and lateral value adding activities contributed by different actors in proximity to one another which all act in relation to a specific industry sector. The actors have relationships characterised by interdependencies of different strength and quality that define the boundaries. The identification not only of the horizontal and vertical actors but also of lateral actor groups is one of the main tasks when processes of value creation are to be analysed. Horizontal actors are the firms which produce the main products of the central industry. They may have a different focus, but a common sectoral background such as one firm building container ships and another that builds yachts. Vertical actors are suppliers as well as buyers of the products delivered by horizontal actors. Here it has to be taken into account that actors may be vertically integrated to different degrees. Lateral actors are for example universities or economic development agencies that facilitate the firms in a web to perform better. Actors are only categorised as belonging to a value adding web if they are related to other internal actors by interdependencies, i.e., if interdependencies cannot be identified an actor does not belong to a value adding web. The degree of interdependency can be categorised according to Thompson (1967). The quality of the interdependency displayed depends on the specific distribution of critical resources between the actors. Such interdependencies can be 1. pooled, i.e., all actors compete for certain resources such as qualified personnel, 2. sequential, i.e., the output of one actor is the input for another, 3. reciprocal, i.e., mutual exchange of in- and outputs among actors, or 4. team-oriented, i.e., the actors can only create a particular output together. 20

The strength of the interdependencies increases from 1 to 4. Figure 2 reflects this perception of a value adding web.

Figure 2:

Value Adding Web

Lateral Actors

Horizontal Actors

Vertical Actors

Pooled interdep.

Sequential interdep.

Reciprocal interdep.

Team-oriented interdep.

The Value Adding Web.

When a cluster is seen as a value adding web it becomes obvious that single firms not only create their “own value”, but also add value to the whole web that could not be created to the same extent if firms were operating in isolation. The participating actors all have an impact on value creation and the overall competitiveness of the web. Therefore, the question of who can appropriate the resulting rents is highly relevant. The underlying assumption in the context of value adding webs is that competitive advantage does not only result from firm specific resources and competencies, but also from the firm’s position within the web as well as the competitiveness of the whole web in relation to other webs.

21

4

Towards a Framework of Competitive Advantage Realisation in Value Adding Webs

In the cluster literature, there is a lack of recognition of the role of single firms with regard to achieving competitive advantages (starting points can be found in Maskell 2005, Folta et al. 2006). Maskell (2005:415) suggests the relevant question in this context therefore is about “… the advantages of N co-localized firms of size S undertaking related activities that are not transferable to a single firm of size S x N doing the same”. Focusing on the single firm in a cluster is only possible when taking into account the embeddedness of these actors in the network of relationships as well as with respect to certain contextual factors. Here, a multi-level analysis is important to the task. Central to the analysis, however, is the realisation of competitive advantages on the level of the single actor in the web. In this section, we will first outline the resource-based view (RBV) as a theoretical perspective to analyse the creation of competitive advantage and then apply it to a resource-based multi-level analysis of value adding webs.

4.1

The Resource-based View in the Context of Value Adding Webs

Competitive advantage realisation on the firm level can be related to valuable resources and resource bundles in the firm. The RBV is a useful perspective for analysing internal resources of a firm. However, here it is argued that it can also be used to analyse the value of resource bundles that may transcend firm boundaries (see for a similar approach regarding the analysis of competitiveness of financial centres worldwide, Dietl, Pauli and Royer 1999a, 1999b). The resource-based perspective is therefore adapted to cluster analysis or in the terminology of this study to value adding web analysis. When investigating the whole value adding web it can be argued that there are also web resources or resource bundles to be identified that lead to competitive advantages of the whole system. The reputation of a region for its high quality wine for example would be a resource of a web reflecting on the related actors on the single firm level. Analysing resources on different levels therefore is an appropriate approach to achieve deeper and systematic insights into competitive advantage realisation in value adding webs.

22

The RBV (e.g., Peteraf 1993, or Collis and Montgomery 1997) focuses on a firm’s internal resources and how a firm can compete with these resources in order to gain competitive advantage (for a discussion on competitive advantages and RBV see Royer 2005). A focal point of the RBV is the firm’s resources and their characteristics, which determine if a resource is valuable for a firm. Resources are “anything which could be thought of as a strength or weakness of a given firm” (Wernerfelt 1984: 172).2 With the resource-based perspective the attention has shifted from the exercise of economic market power to the resource flows due to specialised, unique and difficult to imitate resources as the ultimate source of advantage. The starting point of research in this field is the analysis of firm differences due to different resource endowments and their utilisation. Peteraf (1993) identifies three underlying assumptions of the RBV. Firstly, there is a heterogeneity of resources between single firms. Only because of this heterogeneity it is possible to realise long-term competitive advantages and adherent financial returns. From possessing superior resources a firm can earn Ricardian rents (Peteraf 1993: 180). From possessing marginal resources, a firm can only gain normal economic rents (Peteraf 1993). Monopoly rents are realised if a firm can create competitive barriers to market entry from its resources. Secondly, knowledge is unequally distributed (imperfect knowledge) which influences the realisation of competitive advantage. Peteraf (1993) differentiates between ex post and ex ante limits to competition to set barriers. Ex post limits to competition are set by resources which are inimitable and hard to copy. They are necessary to sustain the resulting rents. Ex ante limits to competition are described by the uncertainty for a firm when entering a new market or when a new product is brought to market. Being the first firm in a market means that a cost advantage can be realised. Thirdly, there is an immobility of resources or imperfect mobility of resources. Immobile resources cannot be traded on the marketplace. Imperfect mobile resources are clearly less valuable in a second best application than in their first best application. Figure 3 gives an overview of the theoretical perspectives for the identification of resources on the different levels of the value adding web.

2

The diversity of definitions regarding the term resources is comparable to the situation in the field of cluster research. Here Wernerfelt’s (1984) broad definition is chosen.

23

Type of Resource

Theoretical Perspective

RegionalInstitutional Industry-specific resources

Location Theory Institutionalism Industrial Organisation Theory

Web-Level

Web-specific Resources

Network Theory

Firm Level

Firm-specific resources

Resource-based View of the Firm

Level of Analysis

Context

Figure 3:

Theoretical Perspectives for the Identification of Resources on the Different Levels of the Value Adding Web.

In summary, the RBV contributes to the explanation of competitive advantage realisation for the firm. From this perspective resource heterogeneity leads to rent creation for single firms, ex ante limits to competition prevent costs from offsetting the rents, ex post limits to competition are necessary to sustain the resulting rents, and imperfect mobility ensures that the created rents stay in the firm and are appropriated by it. The RBV builds the basis for the modification of this approach undertaken here. In the next section relevant resources of value adding webs are identified.

4.2

A Resource-based Multi-level Analysis of Value Adding Webs

As the first group of important value adding web-resources, context-specific resources can be identified. Three sub-categories are differentiated here. The first may be termed regionalness This term functions as an umbrella for resources, which characterise the location of the value adding web such as the type of area (urban, rural) and natural resources such as minerals, climate and physical characteristics.

24

It is contended that regional resources can be identified with the help of locational factors as used in Dunning’s OLI-paradigm. Dunning introduced his OLI-framework in 1977 and further developed it over time (Dunning 1977, 1980, 1988, 1993a, 1993b, 1995, 1997, 2000a, 2000b). Dunning identifies ownership advantages, location advantages and internalisation advantages (OLI advantages) as relevant factors regarding international business activities of firms. In the context of the present study, the location factors included in Dunning’s paradigms are transferred from the field of foreign direct investment to regional locational factors in value adding webs. With regard to the kind of competition between firms, market attractiveness is a relevant factor that varies between different industries. Therefore, valuable industry resources that reflect attractive markets are taken into consideration when analysing value adding webs. Such valuable resources may be a competition that relies on innovation instead of prices. It also may be high structural entry barriers. Structural conditions and the kind of competition are in the focus of industrial organisation concepts (e.g., Porter 1980, 1985). Porter classified sources of market power into five competitive forces. This classification identifies the threat of entry, the degree of rivalry among existing competitors, the threat of substitute products, the bargaining power of buyers and suppliers as influencing the attractiveness of a market. This approach is used here as a starting point to systematise valuable resources of value adding webs on the market level. Firms in general, as well as firms belonging to a value adding web are not operating in a vacuum. As outlined previously they are embedded in a certain locations as well as in a specific industry sector. Both these aspects are taken into consideration. However, other aspects obviously relevant are not included within the above-mentioned two perspectives. For example, cultural specificities or legal factors are not addressed. Therefore, a third sub-category of context-specific resources is introduced acknowledging that firms are embedded in the external institutional environment including, for example, legal regulations or cultural specificities. These institutions are theoretically captured by institutionalism (e.g., DiMaggio and Powell 1983, 1991 or Whitley 1992), which focus on the social efficiency of organisations and especially analyse societal legitimation of organisational activities. The central tenet of institutional concepts is that organisations design their behaviour according to the expectations and requirements of their social environment to achieve legitimacy (Wolf 2005: 389). The institutionalism perspective therefore is regarded as a fruitful 25

perspective to analyse the relevant institutional context of value adding webs. The influence of social factors such as norms, traditions, and conventions on economic activities is for example researched by Granovetter (1985) and Powell (1990). They argue that economic actions and their results are influenced by the social dimensions (contextual factors) of a network. In a networked environment the actors of a market are linked to market and non-market actors and are influenced by them. That means that relationships and networks influence economic activity. Such an institutionalism perspective further offers a link between the context- and the web-level. The nature of rents to be realised from a particular contextual environment is usually not investigated. However, it is contended that rent creation should be analysed not only on the level of the single firm and with regard to the connections between the firms but also in relation to the embeddedness of the connected actors in a more or less valuable context. Therefore, we introduce contextual rents which we define as rents that are created by the actors of a value adding web due to valuable contextual resources such as advantageous locational conditions or beneficial legal or cultural factors. The second main resource category is that of web-specific resources that focuses on the relationship among the different actors. These web-specific resources can be detected with help from social network analysis. Social network analysis can map and examine the relational value and resources that accrue to the value adding web as a whole. It focuses on the capital that is created through exchange relations, interchange between value adding web-participants and the synergy of different elements working together (Keast et al. 2004). The linkages between the actors are focused here to integrate the relevant issue of relations as well as dependencies into the resource-based framework. The linkages are of interest since they are a central characteristic of value adding webs. Network analysis brings further insights into the nature of underlying value adding web relationships in terms of the quality and strength of interdependencies. The focus from this perspective is thus is on relational rents (Dyer and Singh 1998). Lavie (2006: 644) outlines the composition of rents from the perspective of a focal firm as follows:

26

Internal rent can be extracted from the focal firm’s own shared and nonshared resources. Appropriated relational rent can be extracted only from the shared resources of both partners. Inbound spillover rent applies to the partner’s shared and nonshared resources, whereas outbound spillover rent applies to the focal firm’s own resources. Unlike other rent types, outbound spillover rent results from the transfer of benefits from the focal firm to the partner and is, thus, the opposite direction. Lavie (2006) extends the RBV by integrating interconnected firms and thereby takes relational resources into account. This understanding of rent creation is seen as the linking pin between the web level and the firm level in our research. Firm-specific resources as the conventional core of the RBV are often divided into tangible (e.g., physical equipment), intangible (e.g., reputation of a firm) and human resources (e.g., skilled employees). Usually, the intangible and human resources form the basis for competitive advantage. The focus here is on Ricardian rents (resulting from resource scarcity) and quasi rents (resulting from resource specificity). However monopolistic rents are also regarded as relevant on the firm level. The suggested framework is summarised in Figure 4.

27

Value Creation Contextual Rents Exploiting Locational Assets, Rules of the Game, and/or Sectoral Assets

Resources Context-specific Regional Institutional Industry-related

Relational & Inbound/Outbound Spillover Rents Exploiting Horizontal Relationships and/or Vertical Relationships and/or Lateral Relationships

Web-specific Strength and Quality of Interdependencies Firm-specific Tangible Intangible Human

Figure 4:

Ricardian, Quasi & Monopolistic Rents Exploiting the Internal Assets of Vertical Actors and/or Horizontal Actors

Resources for Value Creation in Value Adding Webs.

The resources for value creation are located at the three different levels and are outlined in Figure 4. The framework will be further developed and tested in future research. The resource-based view (RBV) was introduced as a theoretical perspective by which to understand competitive advantage creation of value adding webs. The RBV was then applied to develop a lens through which a multi-level analysis of value adding webs could be undertaken.

5

Concluding Remarks

Clusters are important features of the industrial and economic landscape, capable of engendering economic development by operating through a spatial dimension and creating advantage beyond that of a single firm operating independently. The varied definitions of clusters were examined and a new definition of a cluster has been put forward and justified. Our research findings indicate that in order to analyse the value 28

creation of a single firm in a cluster, the cluster may be more adequately defined as a connection of horizontal, vertical and lateral value adding activities. These activities are contributed by different actors in proximity to one another, acting in relation to a specific sectoral activity and are to different degrees dependent on each other. Further we suggested a framework rooted in the resource-based perspective for analysing value adding webs concentrating on resources and rent creation on the levels of the context, the web and the single firm. In a value adding web the realisation of competitive advantage of single firms cannot be analysed independently. The suggested framework thus takes different types of rents into consideration: contextual rents (context level), relational rents and inbound and outbound spillover rents (web level) as well as Ricardian, quasi and monopolistic rents (firm level). The objective is to detect those resources which characterise the organisation of the value adding activities in a certain setting and allow for competitive analyses of different value adding webs. The results presented in this paper are the starting points for further investigations in this field. A more intense analysis of the rent generating processes that considers the complex resource configurations on the different levels of analysis should lead to a sound framework which for the first time allows insights in the value creation processes of clusters from a single firm perspective. This framework will be empirically tested in an international comparative research design for understanding the operation and performance of clusters and firms within clusters. The aim is to further develop the framework to make it a robust tool not only for cluster analysis but also a sound basis for the development of practical recommendations for firms in clusters. Taking this approach the authors will further contribute to the field of cluster research by explicitly focusing on a single firm perspective in the context of clusters.

29

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Authors’ Profiles Kerry Brown is Professor of Management at the School of Management at Queensland University of Technology, Brisbane, Australia. She received her PhD from Griffith University, Brisbane, Australia. Her main fields of research are public management and employment relations.

John Burgess is Professor and Director at the Graduate School of Business, University of Newcastle, Australia. He has a PhD from the University of Newcastle. His research interests are contingent employment, labour market policy and industrial relations.

Marion Festing is Professor of Human Resource Management and Intercultural Leadership at the Berlin campus of ESCP-EAP European School of Management. She earned her PhD and higher doctoral studies degrees from the University of Paderborn /Germany. Her main field of research is international human resource management.

Susanne Royer is Professor of Strategic and International Management at the University of Flensburg / Germany. She earned her PhD and higher doctoral studies degrees from the University of Paderborn / Germany. Her main field of research is strategic management. Charlotte Steffen, MBA, is research assistant at the chair of Strategic and International Management at the University of Flensburg / Germany. Her main field of research is strategic management.

Jennifer Waterhouse is a post-doctoral researcher at the School of Management at Queensland University of Technology (QUT), Brisbane, Australia. She received her PhD from QUT in 2003. Her research interests include organisational change, employment relations and public management. 35

Working Paper Series ESCP-EAP Europäische Wirtschaftshochschule Berlin ISSN 1619-7658

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Brühl, Rolf (2004): Learning and Management Accounting – a behavioral perspective.

Nr. 10 Wrona, Thomas (2005): Die Fallstudienanalyse als wissenschaftliche Forschungsmethode. Nr. 11 Schmid, Stefan (2005): L’internationalisation et les décisions des dirigeants. Nr. 12 Schmid, Stefan/Daub, Matthias (2005): Service Offshoring Subsidiaries – Towards a Typology. Nr. 13 Festing, Marion/Richthofen, Carolin von (2005): Die Auswahl von Studierenden der Internationalen Betriebswirtschaftslehre. Nr. 14 Schmid, Stefan/Kretschmer, Katharina (2005): How International Are German Supervisory Boards? – An Exploratory Study.

Nr. 15 Brühl, Rolf/Buch, Sabrina (2005): The Construction of Mental Models in Management Accounting: How to Describe Mental Models of Causal Inferences (3rd version). Nr. 16 Schmid, Stefan/Machulik, Mario (2006): What has Perlmutter Really Written? A Comprehensive Analysis of the EPRG Concept. Nr. 17 Jacob, Frank/Plötner, Olaf/Zedler, Christien (2006): Competence Commercialization von Industrieunternehmen: Phänomen, Einordnung und Forschungsfragen. Nr. 18 Schmid, Stefan/Kretschmer, Katharina (2006): Performance Evaluation of Foreign Subsidiaries – A Contingency Framework. Nr. 19 Festing, Marion/Lassalle, Julius (2006): Determinanten des psychologischen Vertrags – Eine empirische Untersuchung am Beispiel von Alumni der ESCP-EAP Europäische Wirtschaftshochschule Berlin. Nr. 20 Brühl, Rolf/Buch, Sabrina (2006): Einheitliche Gütekriterien in der empirischen Forschung? – Objektivität, Reliabilität und Validität in der Diskussion. Nr. 21 Schmid, Stefan/Daniel, Andrea (2006): Measuring Board Internationalization – Towards a More Holistic Approach. Nr. 22

Festing, Marion/Eidems, Judith/Royer, Susanne/Kullak, Frank (2006): When in Rome Pay as the Romans Pay? – Considerations about Transnational Compensation Strategies and the Case of a German MNE.

Nr. 23 Schmid, Stefan/Daub, Matthias (2007): Embeddedness in International Business Research – The Concept and Its Operationalization. Nr. 24 Wrona, Thomas/Klingenfeld, Daniel (2007): Current Approaches in Entrepreneurship Research: Overview and Relevance for Management Research. Nr. 25 Pape, Ulrich/Schlecker, Matthias (2007): Are Credit Spreads and Interest Rates co-integrated? Empirical Analysis in the USD Corporate Bond Market. Nr. 26 Schmid, Stefan (2007): Wie international sind Vorstände und Aufsichtsräte? Deutsche Corporate-Governance-Gremien auf dem Prüfstand. Nr. 27 Brown, Kerry/Burgess, John/Festing, Marion//Royer, Susanne/Steffen, Charlotte/Waterhouse, Jennifer (2007): The Value Adding Web – A Multilevel Framework of Competitive Advantage Realisation in Firm-Clusters.