A Life Cycle for Clusters?: The Dynamics of Agglomeration, by Kerstin Press

By Kerstin Press

The phenomenon of non-random spatial concentrations of companies in a single or few comparable sectors (clusters) is intensively debated in fiscal idea and coverage. The euphoria approximately winning clusters in spite of the fact that neglects that traditionally, many thriving clusters did go to pot into previous business components. This ebook stories the determinants of cluster survival by means of studying their adaptability to alter within the financial surroundings. Linking theoretic wisdom with empirical observations, a simulation version (based within the N/K approach) is constructed, and is the reason whilst and why the cluster's structure assists or hampers adaptability. it truly is came upon that architectures with intermediate levels of department of labour and extra collective governance varieties foster adaptability. Cluster improvement is therefore course based as architectures having developed through the years impression at the probability of destiny survival.

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Extra info for A Life Cycle for Clusters?: The Dynamics of Agglomeration, Change, and Adaption (Contributions to Economics)

Example text

This opens up possibilities for a dispersion of industrial activity (Storper 1997), which is brought about by an external event in the guise of competition from lower cost areas or the emergence of a new industry. In case of competition from lower cost producers, local firms can shift (parts of) the production to cheaper areas, be replaced by firms from other locations or move to upper market segments to evade price competition (Tichy 2001). All three developments imply a partial or full exhaustion of the cluster as local economic activity is diminished by relocation or shrinking markets.

The second regards the view of agglomeration externalities as the source of cluster stability. Both aspects have specific implications 7 To keep a flow in the argument outlined in this chapter, formal representations of the different model have been omitted and are provided in the respective appendices (1-3). 1 Novelty, uncertainty and transaction costs: Industry-location life cycles 23 for the further course of the study. For one, at the time of a change event carrying the potential of cluster exhaustion, the latter is characterised by a multitude of agglomeration externalities producing interdependence between its agents.

The extent to which they are present in different areas might also explain why an industry can display different “temporal, spatial, and organizational patterns of development” (Storper 1997, p. e. why it agglomerates in small firm clusters in some regions and is dominated by large, dispersed corporations in others (Rabellotti 1995). 2 Symbiosis, habitat and external events: Dynamics of firm populations 25 through an investigation of the dynamics of the attractiveness of locations. Industrial developments - among other things – will play a major role in this context.

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