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

By Kerstin Press

The phenomenon of non-random spatial concentrations of businesses in a single or few comparable sectors (clusters) is intensively debated in monetary thought and coverage. The euphoria approximately winning clusters notwithstanding neglects that traditionally, many thriving clusters did go to pot into previous commercial components. This publication reports the determinants of cluster survival by means of interpreting their adaptability to alter within the fiscal atmosphere. 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 chanced on that architectures with intermediate levels of department of labour and extra collective governance kinds foster adaptability. Cluster improvement is therefore direction based as architectures having advanced through the years impression at the probability of destiny survival.

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

Example text

If historical accident leads to a concentration of firms, they out-compete isolated entities and a cluster emerges. As the industry matures, a dominant product design is developed and increasingly adopted by users. Growing demand alongside more fixed product characteristics then allow for a greater integration of production (less division of labour) and firm growth. In addition, the industry’s technology becomes more standardised. As a result, the importance of proximity for knowledge transfer and inter-firm co-ordination declines.

As will be argued in more detail later, adaptation to local bifurcations in clusters proceeds through the activities of local agents. If the latter are interdependent due to agglomeration externalities, the success of individual agent adaptation depends on (the success of) others. This aspect in turn demands a closer investigation of the nature and mechanisms underlying agglomeration externalities in order to understand, which agent activities are interrelated and how this interdependence comes about.

1995 or Rauch 1993. 32 2 Stability and change: Driving cluster development Firms in the model decide on locating in one out of Q possible areas. They are well informed on the profitability of each location, selecting the area offering the highest benefits at the time of their choice. The benefits of each area depend on two factors. On the one hand, all areas exhibit location-intrinsic factors like raw materials or access to transportation networks. These factors convey a certain geographic benefit to firms, which differs according to firms’ (randomly distributed) locational preferences.

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