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The Origin and Growth of Industry Clusters: The Making of Silicon Valley and Detroit

In: Cities and Entrepreneurship

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  • Steven Klepper

Abstract

Data for all producers of automobiles and integrated circuits on their origins, base location, and performance are used to analyze the factors behind the historical clustering of the two industries in Detroit and Silicon Valley, respectively. Key ideas concerning organizational reproduction and heredity are elaborated and used to explain how spinoffs from incumbent firms in the same industry can lead to clustering. Findings concerning the spawning of spinoffs, entry by firms in related industries, and firm performance suggest that organizational reproduction and heredity were the primary forces underlying the clustering of the two industries.

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This chapter was published in:

  • Edward L. Glaeser & Stuart S. Rosenthal & William C. Strange, 2010. "Cities and Entrepreneurship," NBER Books, National Bureau of Economic Research, Inc, number glae09-1, May.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 11897.

    Handle: RePEc:nbr:nberch:11897

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    8. Peter Thompson & Steven Klepper, 2009. "Disagreements and Intra-Industry Spinoffs," Working Papers 0907, Florida International University, Department of Economics.
    9. Belleflamme, Paul & Picard, Pierre & Thisse, Jacques-Francois, 2000. "An Economic Theory of Regional Clusters," Journal of Urban Economics, Elsevier, vol. 48(1), pages 158-184, July.
    10. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 56, Center for Policy Research, Maxwell School, Syracuse University.
    11. Bruce Fallick & Charles A. Fleischman & James B. Rebitzer, 2005. "Job-hopping in Silicon Valley: some evidence concerning the micro-foundations of a high technology cluster," Finance and Economics Discussion Series 2005-11, Board of Governors of the Federal Reserve System (U.S.).
    12. repec:fth:iniesr:430 is not listed on IDEAS
    13. Kristina von Rhein, 2008. "Heritage and Firm Survival - An Analysis of German Automobile Spinoffs 1886-1939," Economics Bulletin, AccessEcon, vol. 12(13), pages 1-8.
    14. Steven Klepper, 2002. "Firm Survival and the Evolution of Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 37-61, Spring.
    15. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
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    17. Helsley, Robert W. & Strange, William C., 2002. "Innovation and Input Sharing," Journal of Urban Economics, Elsevier, vol. 51(1), pages 25-45, January.
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    19. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
    20. Michael S. Dahl & Olav Sorenson, 2008. "The Social Attachment to Place," DRUID Working Papers 08-24, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    21. Steven Klepper, 2007. "Disagreements, Spinoffs, and the Evolution of Detroit as the Capital of the U.S. Automobile Industry," Management Science, INFORMS, vol. 53(4), pages 616-631, April.
    22. Figueiredo, Octavio & Guimaraes, Paulo & Woodward, Douglas, 2002. "Home-field advantage: location decisions of Portuguese entrepreneurs," Journal of Urban Economics, Elsevier, vol. 52(2), pages 341-361, September.
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