The dynamic evolution and technological diffusion in Taiwan's TFT-LCD industrial cluster: a network perspective

Industrial clusters evolve dynamically as the external environment changes. To better understand the nature of cluster evolution, which has nurtured economic growth in early 2000s, strategy and organisation scholars have attempted to unpack contributors to cluster evolution from the perspective of the ‘environmental uncertainty’ and ‘resource abundance’ effects. The paper adopts and extend an earlier extant model through empirical testing of the thin-film transistor liquid crystal display (TFT-LCD) industrial cluster in Taiwan, a developing country. This study modifies the extant network model by adding a diffusion of technological innovation index to cluster evolving. Using the extended case study, the study examines the dynamic evolutionary process in the TFT-LCD industrial cluster. It was found that the evolution of the TFT-LCD industrial cluster resembles the theoretical argument in some respects. The characteristics of network change are modified according to these results. Implication for policymakers and decision-makers of developing countries are also discussed.