This dissertation explores the underlying mechanisms for the upgrading process of the electronics industry in Shenzhen. Industrial upgrading has been an international phenomenon since the globalisation of manufacturing in the late 1970s but to date no comprehensive framework has been proposed for the industrial upgrading in a region. In recent decades, the trend of manufacturing regionalisation and growing uncertainties associated with electronics products in the global market have driven regions that specialise in electronics manufacturing, such as the Chinese city of Shenzhen, to continuously adjust its industrial systems. Such adjustments are mainly based on the evolving business ecosystem they inhabit, which comprises region-specific resources that can be flexibly leveraged by players such as local firms and the government. To elucidate the interactive mechanisms among actors that facilitate industrial upgrading within the regional business ecosystem, this research integrates and extends the existing literature on industrial upgrading from global and local perspectives and applies a business ecosystem framework to address the main research question and sub-questions: How does a region act as a business ecosystem to facilitate the upgrading of a region- specific industry?

1. What is the evolutionary pattern of a regional resource pool?
2. How to understand the upgrading of a region-specific industry?
3. How does a regional resource pool interact with regional industrial systems to facilitate industrial upgrading? In order to answer these questions, a qualitative study on the Shenzhen-based business ecosystem with two streams of embedded cases – electronics companies that have experienced upgrading in Shenzhen and milestone events in Shenzhen’s industrial development – was conducted following an inductive approach. After detailed individual and cross-case analyses, the research revealed three main findings. Firstly, the evolution of the regional resource pool is driven by both milestone events throughout the industrial development of the region and local firms’ feedback impacts. Secondly, the regional industrial upgrading is an iterative and dynamic process and should be interpreted by adding the regional dimension. At the regional level, there co-exist established industrial systems transformation and new industrial systems emergence throughout the upgrading journey of a region-specific industry. Thirdly, the underlying mechanisms for regional industrial upgrading are enabled by the region-based business ecosystem. A total of eight interactive mechanisms between the regional resource pool and regional industrial systems – four transformation impacts from the resource pool on the industrial system and four feedback impacts from the industrial system on the resource pool – result in an iterative and dynamic co-evolution model that defines the region-based business ecosystem. Theoretically, these findings fill the current scholarly neglect of the fact that a region as a whole can function as a business ecosystem to enhance long-term regional growth through industrial upgrading. In addition to these three main theoretical findings, this PhD research project has a number of practical implications. A mapping tool can be developed for firms or regional governments to use in decision making for industrial development. In addition to the tool development, firms and local government should collaborate following an ecosystem logic to enhance resource strengthening and creation, so as to sustain the regional industrial upgrading. In summary, this dissertation contributes to industrial systems and business ecosystem literatures in its re-conceptualisation of region-based business ecosystems. By introducing the regional dimension into the research of industrial upgrading, the integrative region-based business ecosystem model enriches our understanding of the co-evolution between the industrial systems and resources in a developing region.