Leam-by-subcontracting? China's industrial clusters learning and innovation path

Local SMEs can acquire technological knowledge and organizational knowledge through subcontracting for MNCs as contractors, as a result to gain product and process upgrading. However, MNCs always control technical standards and marketing channels, which are quite difficult for subcontracting firms inside industrial clusters of developing countries to compete and surpass. Empirical observation and relative evidence from Kunshan bicycle industrial clusters suggest that learn-by-subcontracting can be a practical way for local industrial clusters upgrading, as well as a reasonable trajectory for economic growth and regional development. But the impact is limited.