Chapter 5 Clustering and the Internationalisation of High Technology Small Firms in Film and Television

Abstract

This chapter draws together three strands of literature on clustering, entrepreneurship and international business, and examines the relationships between these three phenomena in promoting firm formation and growth within clusters. The evidence drawn on includes econometric models based on the unique International Trade in Services Film and Television dataset, an indepth interview survey and other questionnaire survey data. The key conclusions are firstly that strong clusters promote entrepreneurship, which in turn promotes cluster strength in a self-reinforcing manner. Secondly, some firms are better able than others to benefit from cluster locations due to their superior firm competencies and absorptive capacity. Thirdly, cluster strength and internationalisation are mutually reinforcing. Cluster strength contributes to the ability of entrepreneurial firms to expand overseas via export sales, licensing and FDI. Evidence is presented that indicates firms have a greater intensity of export and import activity if they have resource strengths, some of which are derived from their membership of a strong cluster. Strong clusters also attract multinational firms and in the case of the London media cluster, although those multinationals appear somewhat less embedded than non-multinational enterprises (MNEs), they are nevertheless quite strongly embedded. This means that there is a second important cluster feedback loop as spillovers from MNEs to local firms enhance cluster strength, which attracts further multinationals. The acquisition of high performing firms by overseas MNEs does not appear to have reduced either their performance or their embeddedness in a cluster. Fourthly, the nature of internationalisation strategies is conditioned by firm and industry characteristics. In particular, the extent to which tacit knowledge is embodied in a product emerges as being influential in terms of decisions on which internationalisation mode to use. Finally, the resource-based view of the firm emerges as a useful integrative framework for understanding the interplay between clusters, entrepreneurship and internationalisation strategies.

Citation

Cook, G. and Pandit, N. (2012), "Chapter 5 Clustering and the Internationalisation of High Technology Small Firms in Film and Television", Groen, A., Oakey, R., Van Der Sijde, P. and Cook, G. (Ed.) New Technology-Based Firms in the New Millennium (New Technology Based Firms in the New Millennium, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 49-70. https://doi.org/10.1108/S1876-0228(2012)0000009007