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Do Clusters With Public Support Perform Better? Case Study Of Czech Cluster Organizations

Author

Listed:
  • Miroslav ŽIŽKA

    (Technical University of Liberec, Faculty of Economics; Liberec; Czech Republic)

  • Natalie PELLONEOVÁ

    (Technical University of Liberec, Faculty of Economics; Liberec; Czech Republic)

Abstract

This paper deals with an evaluation of the differences in financial performance of member organizations of two types of clusters in the Czech Republic. The first type of cluster was created on the basis of the primary activity of the member entities, bottom-up, without any direct public support. The second type of cluster was created top-down on the basis of a cluster initiative with support from public budgets (mainly from EU structural funds). Cluster initiatives are used as a regional policy tool to foster innovation and competitiveness. Both types of clusters that met the conditions of maturity (created before 2012 inclusive) and high activity were selected for the research. In total, there were 32 clusters, 24 of which were created using the top-down approach and 8 using the bottom-up approach. The financial performance of the member business entities was evaluated using the ROA, ROE and EVA/employee and EVA/revenue indicators. The aim of the research was to prove whether public support for clusters would be reflected in the member entities achieving a better level of financial performance. The results of the analysis show that member entities in clusters established with public support do not achieve a better level of financial performance. Differences in financial performance between the two types of clusters are nonsignificant throughout the entire 2012-2017 reporting period. Therefore, no correlation connected with support for clusters from public funds and increased financial performance by their member enterprises was proved. The conclusion discusses the possible causes of this phenomenon, which include the purported establishment of clusters in order to obtain subsidies.

Suggested Citation

  • Miroslav ŽIŽKA & Natalie PELLONEOVÁ, 2019. "Do Clusters With Public Support Perform Better? Case Study Of Czech Cluster Organizations," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2019(33), pages 20-33, December.
    • Handle: RePEc:rom:rampas:v:2019:y:2019:i:33:p:20-33
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    References listed on IDEAS

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    More about this item

    Keywords

    industry cluster; public sector; bottom-up approach; top-down approach; financial performance;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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