Market imperative and cluster evolution in China: evidence from Shunde

ABSTRACT

Drawing upon the notion of lock-in in evolutionary economic geography perspective and concept of market imperative in global production network 2.0 theory, this study explores the role of market imperatives of local suppliers in the evolution of local industrial clusters in China. Through a case study of the furniture cluster in Shunde, this paper argues that market imperatives of furniture firms have changed dramatically, urging furniture firms to de-lock from previous low-end domestic markets in China and expand to different market segments in China as well as in other emerging economies. The changing market imperatives led to the breaking-out of lock-ins and the transformation of local clusters in the changing institutional context.

KEYWORDS:

• market imperative
• cluster evolution
• lock-in
• domestic market-oriented cluster
• furniture industry
• Shunde

JEL:

• L1

ACKNOWLEDGEMENTS

The authors are grateful to two anonymous reviewers and the editors for useful comments made on an earlier version of this paper.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

ORCID

Tianlan Fu http://orcid.org/0000-0001-8119-6284

Chun Yang http://orcid.org/0000-0002-0169-3449

Lixun Li http://orcid.org/0000-0003-0775-6786

Notes

1. According to the China National Statistical Bureau, enterprises above a designated size refer to those whose main business revenues reach RMB20 million.

2. Most of these firms employed few workers (around five to 10) in their factories.

Additional information

Funding

Financial support from the National Natural Science Foundation of China [grant number 41571119], the Faculty Research Grant of Hong Kong Baptist University [grant numbers FRG1/17-18/013], the China Postdoctoral Science Foundation [grant number 2019M653145], and the Fundamental Research Funds for the Central Universities – Young Teachers Development Project, Sun Yat-sen University [grant number 19lgpy40] are gratefully acknowledged.