How Early Entrants Impact Cluster Emergence: MNEs vs. Local Firms in the Bangalore Digital Creative Industries

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This article addresses the question of how the emergence of a cluster in a global innovation system is influenced by early entrants. It does so by presenting an explorative study of the emerging digital creative industries cluster in Bangalore. I find that MNE entrants develop production and technological capabilities comparatively fast within a narrow range of value chain activities with limited spillovers to the cluster. In comparison, local entrants develop such capabilities more slowly, but within a broader range of value chain activities and with higher spillovers of skills and knowledge, as well as higher participation to building a local entrepreneurial ecosystem. I propose that these effects are moderated by the size of national consumer markets as well as industry context in the guise of project lengths and technological modularity. I also point to the role of global connectivity, proposing that local entrants, in particular, leverage international personal relationships for development of not only relational, but also production capabilities.
Original languageEnglish
JournalManagement and Organization Review
Issue number3
Pages (from-to)495-531
Number of pages37
Publication statusPublished - Sept 2019


  • Capability development
  • Cluster emergence
  • Connectivity
  • MNE entry

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