Agile Firm Organisation and Upgrading in the Greater Pearl River Delta

This chapter analyses an original firm-level dataset collected by our own Hong Kong (HK) Company Survey 2007 to investigate agility patterns applied by HK companies in the Pearl River Delta (PRD) in organising relations to their producers in the PRD and their customers. It also investigates the role of informality proxied by personal relationships for companies in the PRD in governing their production as well as their innovation activities, which have gained greatly in importance in the PRD in the new century. Our findings suggest that different agility patterns can be identified that are applied by companies to organise their relations to their producers and customers. Moreover, the findings show that companies generally tend to vertically integrate their production or innovation activities rather than carrying out such activities under a cooperative governance structure. With regard to cooperative governance structures, there is evidence of a complementary relationship between the importance of informality proxied by personal relationships and the importance of cooperative governance structures both for production and for innovation.