Do foreign subsidiaries innovate and perform better in a cluster? Aspatial analysis of Japanese subsidiaries in the US

Jessie P.H. Poon, Peter Kedron, Sharmistha Bagchi-Sen

Research output: Contribution to journalArticle

9 Scopus citations


The interrelationship between clustering, innovation, and performance of Japanese subsidiaries in the US is examined in this paper. First, we apply Kulldorff's spatial scan statistic to identify process innovation clustering among Japanese subsidiaries. The scale at which clustering occurs is regional rather than local, and cluster location captures the geographical environment of home-transplants from Japan. Second, we apply spatial autoregressive models to test the relationship between cluster location and innovation among Japanese subsidiaries. The results indicate that cluster location strengthens the relationship between subsidiary innovation and firm performance. Negative spatial autocorrelation shows that clustering contributes to innovation by facilitating proximate learning between less innovative laggards, and, leading innovative Japanese subsidiaries.

Original languageEnglish (US)
Pages (from-to)33-42
Number of pages10
JournalApplied Geography
StatePublished - Aug 14 2013



  • Cluster
  • Innovation
  • Japanese subsidiary
  • Kuldorff's scan
  • Spatial autoregressive models

ASJC Scopus subject areas

  • Forestry
  • Geography, Planning and Development
  • Environmental Science(all)
  • Tourism, Leisure and Hospitality Management

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