ABSTRACT
Regional and local development cannot be separated from globalization. For the defining characteristic of this era of globalization (differentiating it from earlier periods of internationalization) is the international dispersal of the production of manufactured components, globally coordinated, and oriented toward supplying industrialized country markets (Dicken, 1998; Kaplinsky, 2005). Most enterprises in developing countries do not engage in spot market, arm’s-length trade with their export customers, i.e. thin, transient relationships. They are instead locked into various hierarchical outsourcing arrangements, i.e. “thick” relationships where lead firms determine production parameters, specifications, and design over the outsourced enterprises (Gereffi et al., 2004; Kaplinsky, 2005). Consequently, issues of operational performance, competitiveness, learning, upgrading, or innovation at a regional level are interlinked with global value chain determinants (Humphrey and Schmitz, 2002). Furthermore, collective efficiency (i.e. clustering and learning through networking) has played a crucial role in local firms enhancing their productivity, rate of innovation, and competitive performance (Bell and Albu, 1999; Maskell et al., 1998; Bessant et al., 2003; Lawson and Lorenz, 1999; Morosini, 2004; Nadvi and Schmitz, 1999; Schmitz, 1999a, 1999b, 2004).
