ABSTRACT
This chapter offers a conceptual understanding of regional industrial transition by combining the insights on multinational subsidiary evolution and on KIBS as a source of innovation. This chapter reviews the literature within business economics on MNE subsidiary evolution and highlights the increased importance given to the local host environment as an explaining variable in the evolution of subsidiaries. The chapter invokes the concept of 'strategic coupling' as a means to stimulate the relational interactions between MNE-subsidiaries, as part of global networks and local-based KIBS suppliers in order to promote regional economic development. This chapter deals with regional industrial transition from the perspective of the interaction between two sets of firms: subsidiaries of multinational corporations and KIBS. Further empirical case study work, taking into account the contingencies addressed, is needed in order to assess the co-evolutionary processes and to induce hypotheses for further theoretical inquiry.
