Local Clusters, Ethnic Networks and Diversity in global knowledge-based industries: an exploratory study of Indian IT

Florian A. Taeube

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     Last modified: June 14, 2006

Abstract
This conceptual paper develops propositions about strategic location and networks of firms through grounded fieldwork and secondary data. It is exploratory and aims at understanding the relevance of local and non-local networks of high-tech firms in geographically concentrated clusters without sophisticated and demanding local buyers. Its main contribution lies in advancing the literature by connecting theories of location choice and social networks through integration of ethnic networks. It suggests that ethnic diversity of clusters is beneficial for firms in the clusters by increasing the number of structural holes, and allowing for trustworthy connections to non-local sources of information and knowledge.