Knowledge Spillovers, Related and Supporting Industries, and Government Intervention: An Integrated Framework for Cluster-Driven Corporate Innovation

Abstract

Late-developing inland clusters face a notable innovation paradox, in which substantial industrial capacity coexists with weak firm-level innovation. Existing research identifies knowledge spillovers, related and supporting industries, and government intervention as major external drivers of innovation, but pays limited attention to how these external conditions are transformed into corporate innovation capability. Drawing on Regional Innovation System Theory, Dynamic Capability Theory, and Porter’s Diamond Model, this study develops an integrated framework comprising seven propositions on direct effects, mediated pathways, and contextual variation. It proposes that cluster performance, defined as the effectiveness of cross-organisational coordination, mediates the relationship between external cluster conditions and corporate innovation capability. This mediating effect is expected to be stronger in late-developing inland clusters than in mature coastal clusters, where firms are more likely to access external resources directly. Situated within the automotive manufacturing context of the Chengdu-Chongqing Twin-City Economic Circle, this study explains why similar structural advantages may produce different innovation outcomes across regions.