University of Toronto
Linking Canadian firms to global networks a strategy for success
Canadian technology companies that tap into the growing global network of industry hotspots for knowledge and talent can expect higher growth and viability than companies that stick close to home. That's one of the main findings from a major study led by Banting Postdoctoral Fellow Dr. Peng-Fei Li and Canada Research Chair Dr. Harald Bathelt, economic geographers at the University of Toronto.
Their January 2014 study, published in the Journal of Economic Geography, analyzed 300 cases of investments by Canadian firms in China from 2006 to 2010. It showed that firms do better when they spread investment among strategic locations around the world with clusters of similar or related industries, creating a global cluster network. For example, technology companies from industrial clusters in Canada were five times more likely to invest in similar Chinese clusters than Canadian firms located outside of a cluster. In comparison, firms who avoid transnational investments miss out on opportunities to share knowledge generated elsewhere, and risk isolation and failure in the long run.
"This study, and the ongoing research I'm doing in this field, will help to promote trade and investment development between Canada and China and strengthen regional innovation capabilities of the two countries," says Li. "It will also help to inform international migration policies with respect to mobile entrepreneurs and regional development strategies in the global economy."
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