<p>This study investigated how peripheral regions can generate new industrial development paths through strategic orchestration of institutional entrepreneurship and external linkages. Bridging the perspectives of evolutionary economic geography (EEG) and global production networks (GPN), it highlights how local institutional actors, particularly subnational governments and cluster organizations mobilize endogenous capabilities to couple with global networks in ways that enable unrelated diversification and functional upgrading. This study empirically examined the formation of a cosmetics industry cluster in Karatsu City, Japan, which was coordinated by the Japan Cosmetic Center, a locally led platform for regional innovation. Based on a qualitative analysis of policy documents and semi-structured interviews, I show how multilevel governance and international cluster engagement foster cross-border knowledge transfer, trust-based partnerships, and organizational learning. These findings contribute to the ongoing debates on EEG by demonstrating how strategic coupling can be institutionally engineered even in peripheral regions, enabling place-based actors to overcome structural disadvantages. By theorizing peripheral path creation as a cumulative process of capability formation embedded in institutional contexts, this study advances the integration of the EEG and GPN frameworks, offering conceptual insights into how regions coevolve with global production systems.</p>