Implications of the electronic commerce for the spatial clustering of traditional industries: A case study on the furniture cluster in Foshan, China

Authors: Xiangyu Wang*, University College London
Topics: Economic Geography, China
Keywords: Electronic Ecommerce, Industrial Clusters, MAR Externalties, Transaction Relationships, Hierarchy, B2B, B2C
Session Type: Paper
Day: 4/10/2018
Start / End Time: 10:00 AM / 11:40 AM
Room: Astor Ballroom I, Astor, 2nd Floor
Presentation File: No File Uploaded

Electronic ecommerce (EC) are viewed as both a specific application of information and communication technology (ICT) and a market institution in the information science and management research respectively. In the former strand, certain nongeographers pointed out that the impact of EC on industrial agglomerations may vary due to the distinct clustering dynamics. The latter revealed: (1) a rigidity of the hierarchical transaction relationships against the business-to-business (B2B) e-market, however, lacking discussions on its spatially constrained manifestations; (2) the disintermediation and channel conflict led by the business-to-customer (B2C) e-market, while failed to foresee firms’ incomplete integration in these processes. China has experienced a booming in EC during the past decade, and the dynamics of traditional industry clustering contain agglomeration economies resulted by both the positive MAR externalities and spatial transaction cost savings. Through a case study on the furniture cluster in Foshan, the research purpose is to examine whether the rationale of geographic clustering has been challenged or not by EC. By analyzing the impact of EC on transaction relations along the value chain, the author concluded that: (1) the domestic B2C e-market has resulted in the vertical quasi-integration of many new all-in-one OBMs in a hub-and-spoke structure, based on which MAR externalities are generally increased; (2) the B2B e-market has not dampened hierarchical transaction relations; (3) the long-term effect of various export B2C e-markets depends the online market share it aggregates and its monopolistic degree.

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