ABSTRACT
Studies of the Chinese economy in recent years have documented the significant impact of global production networks and strategic couplings, and have studied the linkages between regional clustering and innovation (Fan 2006; Sun and Wen 2007; Wang and Lee 2007; Miao et al. 2007; Kim and Zhang 2008; Yeung 2009; Zeng and Bathelt 2011; Wei and Liefner 2012). In comparison, less attention has been paid in economic geography to potential problems that can arise in the internationalization process due to the fact that the firms involved originate from different national production and innovation systems, and are embedded in different institutional environments and cultural contexts (Klaerding 2011). Because of such differences, new transnational production and innovation settings are not always efficient. We argue in this chapter that barriers and boundaries in economic interaction can play an important role in everyday practices in such contexts. Foreign branches and subsidiaries have to bridge political, social, institutional and cultural differences between the home and host countries. Products that are experiencing a boom in demand in Germany, for example, can prove to be non-sellers in Beijing if advertising campaigns use symbols that have a negative association for Chinese consumers, or if Chinese consumer preferences are misjudged. It is, therefore, an important task to examine and understand the ways in which certain structures in production and consumption emerge, why they differ from one context to another and how they diffuse spatially.
