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The institutional determinants of agglomeration: a study in the global semiconductor industry

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  • Xavier Martin
  • Robert M. Salomon
  • Zheying Wu

Abstract

We hypothesize that several characteristics of a country's institutional environment encourage firms to agglomerate. To test our hypotheses, we examine the collocation pattern of 931 plant investments made by 266 firms across 29 countries in the global semiconductor industry from 1975 to 2004. The results show that the decision to agglomerate is strongly dependent on a country's institutional context. Specifically, firms prefer to agglomerate when investing within countries with collectivist cultures, and those characterized by political and economic uncertainty. We assess the robustness of the results across multiple indicators of these institutional conditions. Copyright 2010 The Author 2010. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Suggested Citation

  • Xavier Martin & Robert M. Salomon & Zheying Wu, 2010. "The institutional determinants of agglomeration: a study in the global semiconductor industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(6), pages 1769-1800, December.
    • Handle: RePEc:oup:indcch:v:19:y:2010:i:6:p:1769-1800
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    File URL: http://hdl.handle.net/10.1093/icc/dtq049
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    Citations

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    Cited by:

    1. Rujirutana Mandhachitara & Randall Shannon, 2016. "The Formation and Sustainability of same Product Retail Store Clusters in A Modern Mega City," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(5), pages 567-581, December.
    2. Diego Damásio Lima & Daniel Pacheco Lacerda & Miguel Afonso Sellitto, 2017. "Systemic Analysis of the Brazilian Production Chain of Semiconductors: Graphic Representation and Leverage Points," Systemic Practice and Action Research, Springer, vol. 30(3), pages 295-316, June.
    3. Cha Li & Felipe A. Csaszar, 2019. "Government as Landscape Designer: A Behavioral View of Industrial Policy," Strategy Science, INFORMS, vol. 4(3), pages 175-192, September.
    4. Shivaram V. Devarakonda & Brian T. McCann & Jeffrey J. Reuer, 2018. "Marshallian Forces and Governance Externalities: Location Effects on Contractual Safeguards in Research and Development Alliances," Organization Science, INFORMS, vol. 29(6), pages 1112-1129, December.
    5. Xiaoying Li & Yin-Fang Zhang & Laixiang Sun, 2018. "Industry Agglomeration, Sub-National Institutions and the Profitability of Foreign Subsidiaries," Management International Review, Springer, vol. 58(6), pages 969-993, December.
    6. Martin, Xavier, 2013. "Solving theoretical and empirical conundrums in international strategy research by matching foreign entry mode choices and performance," Other publications TiSEM 7645ea46-0b9a-4fc0-ae33-a, Tilburg University, School of Economics and Management.
    7. Wonsang Ryu & Thomas H. Brush & Joonhyung Bae, 2023. "How agglomeration affects alliance governance and innovation performance: The role of cluster size," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 297-310, January.
    8. Brian T. McCann & Jeffrey J. Reuer & Nandini Lahiri, 2016. "Agglomeration and the choice between acquisitions and alliances: An information economics perspective," Strategic Management Journal, Wiley Blackwell, vol. 37(6), pages 1085-1106, June.
    9. Guo, Shiau-Ling, 2023. "The governance implication of the geographic concentration of franchise activities for franchise relationships," Journal of Business Research, Elsevier, vol. 157(C).
    10. Wang, Pengfei, 2017. "Syndication and Foreignness: Venture Capital Investments in Emerging and Developed Markets," Journal of International Management, Elsevier, vol. 23(1), pages 1-15.
    11. Martin, Xavier & van den Oever, K.F., 2013. "Progress, maturity or exhaustion? Sources and modes of theorizing on the international strategy - performance relationship (1990-2011)," Other publications TiSEM 656747af-da51-4917-92fd-7, Tilburg University, School of Economics and Management.

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