Hub firm transformation and industry cluster upgrading: innovation network perspective

Purpose: This research paper examines how hub firm transformation and restructuring of network partnerships shape the development of industrial clusters in China. Design/methodology/approach: Questionnaire data were collected from 210 managers (response rate 70.9 percent) from the manufacturing industrial clusters in Eastern China. Findings: The results inform that a cluster’s hub firm transformation influences the evolution of the cluster. Though the hub firm may possess transformation capabilities, the cluster is likely to be weakened if network partnerships and resource synergy are not formed amongst the cluster members. Research limitations/implications: This paper, in examining the individual- and firm-level attributes of orchestration capability and their interactions, sheds light on the firm level and inter-firm level relationships between resources and innovation in an industrial cluster. Practical implications: To facilitate learning and the upgrading of firms within an industry cluster and promote a cluster’s innovation network, policymakers can initiate preferential policy measures to cultivate support to strategically transform a cluster’s hub firm, thus fostering cluster network growth. Originality/value: The paper studies the evolution of clusters by investigating the hub firm transformation and member firm interaction. Focusing on the inter-firm network interactions lends a richer understanding of the nuances of the evolution of industrial clusters in Asia.