Philippine E-Journals

The Role of Cluster Governance in the Process of Firm Internationalization: Based on the Example of Two Malaysian Halal Industrial Parks

François N. Dubé | Yang Haijuan | Huang Lijun

Discipline: Social Science

 

Abstract:

The concept of industrial clustering—that is, the importance of synergies between complementary economic activities gathered together in one place—has long been associated with an easier, faster process of internationalization for participating firms. But the question of how exactly—by which mechanisms—such industrial clustering helps firms internationalize remains unclear. To fully understand this relationship, the present article focuses on the process of cluster governance, and distinguishes between three different aspects, namely, the cluster composition, the internal network density, and the degree of knowledge sharing. By focusing on two major halal industrial clusters in Malaysia—namely, the Penang International Halal Hub and the Melacca Halal Hub—we shall see how the different aspects of the Malaysian model of industrial clustering facilitates the process of firm internationalization in the Halal industry. In order to analyze the internal network of the two halal parks under study, we use the quantitative methods derived from Bossomaier and Green (1999), based on data related to networks of business interactions. The conclusions of the present article will allow us to formulate useful insights for other halal industrial clusters seeking to internationalize their activities.