Knowledge Sharing in an Emerging Industry Cluster: A Saudi Arabian Case Study

264 Pages·2017·2.3 MB·English

by  Aliah Zafer

School of Management
Curtin Business School

Knowledge Sharing in an Emerging Industry Cluster:
A Saudi Arabian Case Study

Aliah Mohammad A Zafer

This thesis is presented for the Degree of
Doctor of Philosophy
of
Curtin University

April 2017
Declaration
To the best of my knowledge and belief, this thesis contains no material previously published
by any other person except where due acknowledgement has been made.
This thesis contains no material that has been accepted for the award of any other degree or
diploma in any other university.

On: 05/04/2017

i
DEDICATION
I dedicate this thesis to my parents, Hanaa and Mohammed and to my beloved family.

ii
Acknowledgements
This PhD Journey has been undertaken with many challenges and hard personal
circumstances. Therefore, first and foremost I would like to give my sincere thanks and praise
to Allah SWT for giving me the chance, strength, knowledge and patience needed to
complete this doctoral journey. I would like to take this opportunity to express my sincere
gratitude to my supervisors, especially my main supervisor professor John Burgess, who
dedicated more of his time and effort to helping me during this study. He has directed me
through the hardest times. Although he was constantly travelling for research purposes, he
was always present with his prompt responses, interactions, immediate feedback and his
ready answers to what seemed the most impossible of problems. Moreover, I would like to
thank Dr. Julia Connell for guiding me to the right decision at the beginning of this thesis and
for sharing her knowledge in the field of research in the GCC countries. I am very thankful
for her support, cooperation, open door policy and for leading me to the right way in my
study. I also would like to thank Dr. Kantha Dayaram for taking me as her student during my
very final days at Curtin University. I am really grateful and I highly appreciate all her efforts
and supports.
I would like to give my deepest expression of love and appreciation for all those who
provided me the possibility to complete this thesis. First, my special words of thanks should
go to my mother, Mrs. Hanaa Altowairqi. Her unlimited love and support gave me the
confidence in myself and helped me see what I could be. She has given me strength to strive
for my goals, to be independent, and to never settle for less. I would like to extend my thanks
to my father, Dr. Mohammed Zafer, who has always believed in me, for everything he gives
me in my life; thanks for everything I learned from you since my childhood. His support,
unlimited prayers, and encouragement guided me throughout this academic journey. I would
like to thank my sisters and brothers for their genuine support and prayers for me during all
stages of my study journey.
I would like to thank the Saudi Government, the Ministry of Education, the Saudi Cultural
Mission in Australia and most importantly King Abdullah, may he rest in peace, for
supporting my scholarship and helping me to fulfill my dream of completing the postgraduate
studies.
As they say, “leave the very best for last”: my final and most important acknowledgement
goes to my beloved family. Without the support of my husband Dr. Yazeed Altowairqi, I
iii
would never have succeeded. Thank you Yazeed; without your support, encouragement,
understanding and patience, writing this thesis would not have been possible. My beloved son
Khaled, thanks for your unbelievable understanding that your mom could not be always there
for you during the years of my PhD journey. My little angel Talyah, you were my smile
during the busiest and hardest times. I will defiantly make it up for all of the time that we
missed. No words in any language can express my sincere thanks to my lovely family for
their kindness and thoughtfulness during this long journey.

iv
CONTENTS
DECLARATION .................................................................................................................................................. I
DEDICATION ..................................................................................................................................................... II
ACKNOWLEDGEMENTS .............................................................................................................................. III
LIST OF TABLES ............................................................................... ERROR! BOOKMARK NOT DEFINED.
LIST OF FIGURES ............................................................................................................................................. X
LIST OF ABBREVIATIONS ............................................................................................................................ XI
LIST OF SPECIAL TERMS ........................................................................................................................... XII
ABSTRACT .................................................................................................................................................... XIII
CHAPTER 1: INTRODUCTION........................................................................................................................ 1
1.1 BACKGROUND ............................................................................................................................................... 1
1.1.2 The Importance of Industry Clusters ..................................................................................................... 3
1.1.3 Industry Clusters Support Knowledge Sharing ..................................................................................... 4
1.2 RESEARCH QUESTIONS .................................................................................................................................. 5
1.2.1 Research Design ................................................................................................................................... 6
1.3. CONTRIBUTION OF THE RESEARCH ............................................................................................................... 8
1.4. OUTLINE..................................................................................................................................................... 10
1.5 LIMITATIONS ............................................................................................................................................... 11
CHAPTER 2: RESEARCH CONTEXT ........................................................................................................... 12
2.1 INTRODUCTION ............................................................................................................................................ 12
2.1.1 National Context of Saudi Arabia ....................................................................................................... 12
2.1.2 History of Saudi Arabia ...................................................................................................................... 12
2.1.3 Geography of Saudi Arabia ................................................................................................................ 13
2.1.4 Population of Saudi Arabia................................................................................................................. 14
2.1.5 Culture, Politics and Governance ....................................................................................................... 15
2.2 THE SAUDI ARABIAN ECONOMY ................................................................................................................. 15
2.2.1 Foreign Direct Investment (Ministry of Foreign Affairs) ................................................................... 16
2.2.2 Labour Market in Saudi Arabia .......................................................................................................... 16
2.2.3 Department of Zakat and Income Tax ................................................................................................. 18
2.3 INDUSTRIAL CLUSTER PROGRAMS IN SAUDI ARABIA .................................................................................. 18
2.3.1 Background on the Regional Development (Economic City) .............................................................. 19
2.3.2 Planned Major Actors within the Saudi Manufacturing Cluster (SAM) ............................................. 23
2.3.3 Saudi General Investment Authority (SAGIA) .................................................................................... 24
2.3.4 Economic Cities Authority (ECA) ....................................................................................................... 25
2.3.5 The Human Capital Authority (HCA) ................................................................................................. 26
2.3.6 Saudi Arabian Private Economic Developer (ED) ............................................................................. 26
v
2.3.7 SAM Cluster University ...................................................................................................................... 27
2.3.8 Seaport Operator ................................................................................................................................ 27
2.4 CONCLUSION ............................................................................................................................................... 28
CHAPTER 3: LITERATURE REVIEW ......................................................................................................... 29
3.1 INTRODUCTION ............................................................................................................................................ 29
3.2 CONCEPTUALISING INDUSTRIAL DISTRICTS AND INDUSTRY CLUSTERS ...................................................... 29
3.2.1 Formation of Industry Clusters ........................................................................................................... 33
3.2.2 Emerging Clusters .............................................................................................................................. 36
3.3 VALUE ADDING WEB FRAMEWORK ............................................................................................................ 37
3.3.1 Interdependencies between Actors ...................................................................................................... 40
3.3.2 Interactions and Links between Actors ............................................................................................... 41
3.3.3 Role of the Government as a Lateral Actor on Initiating and Supporting Clusters ............................ 42
3.4 SUMMARISING THE CONTEXTUAL AND CONCEPTUAL FRAMEWORK OF THIS RESEARCH ............................. 43
3.4.1 Knowledge Management and Knowledge Sharing ............................................................................. 43
3.4.2 Knowledge Sharing Processes within Clusters ................................................................................... 46
3.4.3 Explicit Knowledge Sharing ................................................................................................................ 48
3.4.4 Tacit Knowledge Sharing .................................................................................................................... 48
3.4.5 Linking Explicit and Tacit Knowledge Sharing .................................................................................. 49
3.5 THEORETICAL FRAMEWORK FOR UNDERSTANDING KNOWLEDGE SHARING WITHIN AN EMERGING CLUSTER
.......................................................................................................................................................................... 49
3.5.1 Absorptive Capacity ............................................................................................................................ 50
3.5.2 Knowledge of Expertise Location ....................................................................................................... 52
3.5.3 Inter-organisational Trust................................................................................................................... 53
3.5.4 Social Capital ..................................................................................................................................... 55
3.5.5 Accessibility ........................................................................................................................................ 57
3.6 BARRIERS TO KNOWLEDGE SHARING IN A CLUSTER ................................................................................... 61
3.7 SUMMARY AND CONCLUSION...................................................................................................................... 62
CHAPTER 4: METHODOLOGY AND RESEARCH DESIGN ................................................................... 64
4.1 INTRODUCTION ............................................................................................................................................ 64
4.2 THE RESEARCH PARADIGM ......................................................................................................................... 64
4.2.1 Selection of the Research Paradigm ................................................................................................... 66
4.2.2 Mixed-methods Research .................................................................................................................... 68
4.2.3 Research Design ................................................................................................................................. 69
4.2.4 Case Study Research ........................................................................................................................... 69
4.2.5 Case Selection ..................................................................................................................................... 71
4.2.6 RESEARCH PROCEDURES .......................................................................................................................... 71
4.2. 7 Pilot Study .......................................................................................................................................... 73
4.2.8 Participant Selection ........................................................................................................................... 74
4.3 PARTICIPATING FIRMS ................................................................................................................................. 76
vi
HMF3 ............................................................................................................ Error! Bookmark not defined.
HMF4 ............................................................................................................ Error! Bookmark not defined.
HMF5 ............................................................................................................. Error! Bookmark not defined.
4. 4 DATA COLLECTION .................................................................................................................................... 77
4. 4.1 Interviews ........................................................................................................................................... 77
4.4.2 Document Analysis.............................................................................................................................. 79
4.5 DATA-ANALYSIS ......................................................................................................................................... 81
4.6 TRIANGULATION ......................................................................................................................................... 83
4.7 VALIDITY AND RELIABILITY ....................................................................................................................... 84
4.8 ETHICAL CONSIDERATIONS ......................................................................................................................... 85
4.9 LIMITATIONS ............................................................................................................................................... 86
4.10 CONCLUSION ............................................................................................................................................. 86
CHAPTER 5: DATA ANALYSIS AND FINDINGS ...................................................................................... 88
5.1 INTRODUCTION ............................................................................................................................................ 88
5.1 CHARACTERISTICS OF SAM CLUSTER ACTORS ..................................................................................... 89
5.1.1 V2 - Large MNE .............................................................................................................................. 89
5.1.2 Horizontal Actor: HMF1 Medium MNE Firm .................................................................................... 90
5.1.3 Horizontal Actor: HMF2 - Small Local Firm ..................................................................................... 91
5.1.4 Horizontal Actor: HMF3 Large Local Firm ...................................................................................... 91
5.1.5 Horizontal Actor: HMF4 - Medium MNE Firm .................................................................................. 92
5.1.6 Horizontal Actor: HMF5 - Medium Local Firm ................................................................................. 93
5.1.7 Horizontal Actor: HMF6 - Large MNE Firm ..................................................................................... 93
5.2 BACKGROUND FOR THE ANALYSIS AND MECHANISMS OF KNOWLEDGE SHARING ........................................ 94
5.3 FORMS OF WEB-LEVEL KNOWLEDGE SHARING IN THE SAM CLUSTER ....................................................... 107
5.4 FACTORS INFLUENCING KNOWLEDGE FLOWS IN THE CLUSTER (WEB LEVEL) .......................................... 109
5.4.1 Absorptive capacity ........................................................................................................................... 109
5.4.2 Knowledge of expertise location ....................................................................................................... 112
5.4.3 Knowledge sharing through the ICP to the SAM Cluster ................................................................. 114
5.4.4 Inter-Organisational Trust ................................................................................................................ 116
5.4.5 Social Capital ................................................................................................................................... 117
5.4.6 Accessibility ...................................................................................................................................... 118
5.5 BARRIERS TO WEB-LEVEL KNOWLEDGE SHARING IN THE SAM CLUSTER ................................................. 120
5.6 WEB-LEVEL CONCLUSIONS ...................................................................................................................... 123
5.7 ANALYSIS OF KNOWLEDGE SHARING AT THE LEVEL OF THE FIRM ........................................................... 124
5.8 MECHANISMS OF KNOWLEDGE SHARING AT FIRM LEVEL ........................................................................... 125
5.8.1 Formal knowledge sharing at firm level ........................................................................................... 125
5.8.2 Informal knowledge sharing at the firm level .................................................................................. 129
5.9 FORMS OF KNOWLEDGE SHARING AT THE FIRM-LEVEL .............................................................................. 130
5.10 FACTORS INFLUENCING KNOWLEDGE FLOWS IN THE CLUSTER FIRMS .................................................... 131
5.10.1 Absorptive capacity ........................................................................................................................ 131
vii
5.10.2 Knowledge of expertise .................................................................................................................. 133
5.10.3 Inter-organisational trust ................................................................................................................ 134
5.10.4 Social Capital ................................................................................................................................ 135
5.10.5 Accessibility .................................................................................................................................... 137
5.11 BARRIERS TO KNOWLEDGE SHARING IN THE SAM CLUSTER ................................................................... 138
5.12 SUMMARY AND CONCLUSION .................................................................................................................. 139
CHAPTER 6: SIGNIFICANCE OF THE FINDINGS .................................................................................. 141
6.1 INTRODUCTION ........................................................................................................................................ 141
6.2 KNOWLEDGE SHARING MECHANISMS AND FORMS OF KNOWLEDGE IN THE SAM CLUSTER ................ 142
6.3 FACTORS INFLUENCING KNOWLEDGE SHARING IN THE SAM CLUSTER .............................................. 146
6.3.1 Absorptive capacity .......................................................................................................................... 146
6.3.2 Knowledge of expertise location ...................................................................................................... 149
6.3.3 Inter-organisational Trust ............................................................................................................... 151
6.3.4 Social Capital and Knowledge Sharing ........................................................................................... 154
6.3.5 Accessibility ...................................................................................................................................... 157
6.4 BARRIERS TO KNOWLEDGE SHARING IN A CLUSTER ............................................................................. 159
CHAPTER 7: CONCLUSIONS AND IMPLICATIONS ............................................................................. 166
7.1 INTRODUCTION ........................................................................................................................................ 166
7.2 FINDINGS ON THE RESEARCH SUB-OBJECTIVES ............................................................................ 166
7.2.1 Absorptive capacity .......................................................................................................................... 168
7.2.2 Knowledge of expertise location ...................................................................................................... 169
7.2.3 Inter- organisational trust ............................................................................................................... 170
7.2.4 Social capital .................................................................................................................................... 171
7.2.4.1 Bonding and bridging capital ....................................................................................................... 171
7.2.5 Accessibility ...................................................................................................................................... 172
7.3 THE MAIN RESEARCH QUESTION ADDRESSED ...................................................................................... 174
7.4. IMPLICATIONS FOR POLICY AND PRACTICE .......................................................................................... 176
7.4.1 Implications at the policy design stage ............................................................................................ 177
7.4.2 Implications at policy implementation stage ................................................................................... 178
7.4.3 Policy effectiveness .......................................................................................................................... 179
7.4.5 Implications for practice .................................................................................................................. 180
7.4.6 Implications for establishing clusters in SA .................................................................................... 180
7.5 RESEARCH LIMITATIONS ........................................................................................................................ 181
7.6 CONTRIBUTIONS OF THE RESEARCH ....................................................................................................... 182
7.7 SUGGESTIONS FOR FURTHER RESEARCH ............................................................................................... 183
REFERENCES ................................................................................................................................................. 186
APPENDIXES ................................................................................................................................................... 242

viii
List of Tables

Table 2.1: Saudi Arabia’s Population by Gender, Age, and
Nationality………………….Error! Bookmark not defined.
Table 2.2: Saudi Arabia’s Labour
Force………………………………………………….Error! Bookmark not defined.
Table 2.3: Main planned actors of the clusters within the economic
city………………...Error! Bookmark not defined.
Table 3.1: Conceptual Framework of Knowledge Sharing in an Emerging Cluster… 59
Table 4.1: Coding Study Participants and Identifying Positions within the Cluster (Web-
level Lateral Actors)……………………………………………………………………..75
Table 4.2: Coding Study Participants and Identifying Positions within the Cluster (Firm
level) ……………………………………………………………………………………...75
Table 4.3: Participating Firms in the SAM Cluster…………………………………….....76
Table 5.1: Identification of the Participants in the SAM Cluster at the Time of Data
Collection for this Study in (2013-2014)………………………………………………...95
Table 5.2: Types and Form of Links within the Cluster …………………………………99
Table 5..3: Knowledge Sahring Mechanisms……………….……………………………97
Table 5.4: Summary of the Mechanisms of Knowledge Sharing at Firm Level………...130
Table 7.1: Summary of Answers to Research Questions………………………………..175

ix