My research focuses on innovation processes and firm strategies at the local and global levels. At the local level, I am interested in how innovation occurs in industrial clusters, particularly how local entrepreneurs interact with each other. At the global level, I am tackling a geographical dilemma of multinational enterprises: they need to act both as a local firm to access local knowledge pools and as a global organization to channel transnational knowledge flows. I approach this geographical puzzle by investigating how multinational firms strategically leverage knowledge over space, especially at the sub-national level, such as industrial clusters. In general, my research cuts across the fields of innovation studies, entrepreneurship, international business, strategy, and economic geography.

Local Innovation Process

At the local level, the main topic in my research relates to how firms in industrial clusters respond to uncertain industrial and geographical contexts. I had investigated how cluster firms change their business practices when a new generation of entrepreneurs grows in local communities (Li 2012 Journal of Economic Geography; Bathelt & Li 2013 a chapter in Handbook of Regional Science) and how lead firms in a cluster diverge their strategies (Li 2014, Regional Studies). As a consultant for the World Bank, I had also engaged in translating my research into industrial policies for African countries (Li 2013, a chapter in Tales from the Development Frontier).

Over the past three years, I have extended my research frontier at the cluster level in several new dimensions. Based on the story of two clusters in the same industry, I developed a knowledge-based framework to understand cluster emergence (Li 2018 Entrepreneurship and Regional Development). With a case of industrial design firms in Beijing, I found firm boundaries are shaped by strategic consideration of interactive learning (Zhu & Li 2019 Industry and Innovation). Also, I investigated how the largest temporary cluster of firms in China, the Canton fair, evolves over time (Li & Bathelt 2017 Area Development and Policy; Bathelt, Li & Zhu 2017 European Planning Studies). To theorize the findings in my empirical works on industrial clusters, I developed theoretical frameworks on family ties for learning (Li 2017 a chapter in Knowledge and Networks) and horizontal learning (Li 2017 a chapter in The Elgar Companion to Innovation and Knowledge Creation).

Global Innovation Strategy

At the global level, I am excited to explore how MNEs configure organizational networks and innovation strategies across clusters. Global knowledge economy becomes highly uneven in a geographical perspective, with a limited number of cities and clusters acting as innovation hotpots in a specific field. Given this uneven distribution of knowledge, how can firms respond organizationally and strategically? Traditionally, international business scholars focus on the country level to examine location choices and global strategies of MNEs. Recently, there has been a calling to zoom into the sub-national level to understand behaviors of MNEs. On this account, I have developed the framework of global cluster networks and reported some tentative evidence (Bathelt & Li 2014 Journal of Economic Geography; Li 2014 Journal of Economic Geography).

My work over the past three years makes two big progresses in this direction. First, I demonstrate with solid statistical evidence that firms from industrial clusters at the city level tend to invest in similar cluster locations (Li & Bathelt 2018 Journal of International Business Studies). This finding indicates industrial clusters are important to understand location choices of MNEs. Second, if MNEs choose different locations depending on their cluster origins, how do they acquire and create knowledge in global cluster networks? I build a typology of four spatial knowledge strategies of MNEs across clusters and document them with detailed qualitative evidence of MNE cases between Canada and China (Li & Bathelt 2019 Global Strategy Journal). Another paper explains the process of how MNEs can build global knowledge pipelines (Bathelt & Li 2020 Research Policy).

Location and Strategy

Currently, I begin to contextualize my research more firmly within the strategy and innovation fields. Particularly, I am working to examine how geography and industrial clustering shape strategic actions of firms.