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Clusters: Determinants and Effects

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Alex R. Hoen

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Abstract

This memorandum surveys the empirical literature about the effects and determinants of clusters. It finds that clusters generally lead to more innovations, knowledge spillovers, faster diffusion of technologies and knowledge, and competitive advantages. The presence of a skilled labour force is the most important determinant for clusters. Other important factors for the existence of clusters are economies of scale and scope, knowledge spillovers, and competition from foreign competitors. Clusters appear to be especially important for small firms. Surprisingly, there is relatively little cooperation between these firms. Even though clusters are generally located near a knowledge institution, there is also relatively little cooperation between the cluster and the knowledge institution. Since clusters need skilled labour and competition, a good cluster policy may be no cluster policy at all. Instead, the government should look after an education system that produces a highly educated and skilled workforce, and stimulate competition by (further) opening markets to foreign competitors.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memoranda with number 17.

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Handle: RePEc:cpb:memodm:17

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Related research
Keywords: cluster; clusters; innovation; technology; knowledge;

Find related papers by JEL classification:
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
O3 - Economic Development, Technological Change, and Growth - - Technological Change

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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    Other versions:
  2. Mansfield, Edwin, et al, 1977. "Social and Private Rates of Return from Industrial Innovations," The Quarterly Journal of Economics, MIT Press, vol. 91(2), pages 221-40, May. [Downloadable!] (restricted)
  3. Baptista, Rui & Swann, Peter, 1998. "Do firms in clusters innovate more?," Research Policy, Elsevier, vol. 27(5), pages 525-540, September. [Downloadable!] (restricted)
  4. Audretsch, David B & Vivarelli, Marco, 1994. "Small Firms and R&D Spillovers: Evidence from Italy," CEPR Discussion Papers 927, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  5. Baptista, Rui, 2000. "Do innovations diffuse faster within geographical clusters?," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 515-535, April. [Downloadable!] (restricted)
  6. M. Ishaq Nadiri, 1993. "Innovations and Technological Spillovers," NBER Working Papers 4423, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Paul Geroski & Steve Machin & John Van Reenen, 1993. "The Profitability of Innovating Firms," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 198-211, Summer. [Downloadable!] (restricted)
  8. Jeroen de Jong & Brouwer, 1999. "Determinants of the innovative ability of SMEs," Scales Research Reports B199902, EIM Business and Policy Research. [Downloadable!]
  9. Audretsch, David B & Feldman, Maryann P, 1995. "Innovative Clusters and the Industry Life Cycle," CEPR Discussion Papers 1161, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  10. Alex R. Hoen, 2001. "An International Comparison of National Clusters," ERSA conference papers ersa01p27, European Regional Science Association. [Downloadable!]
  11. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August. [Downloadable!] (restricted)
    Other versions:
  12. Egbert Wever, Erik Stam, 1999. "Clusters of High Technology SMEs: The Dutch Case," Regional Studies, Taylor and Francis Journals, vol. 33(4), pages 391-400, June. [Downloadable!] (restricted)
  13. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476.
  14. Rolf Weder & Herbert Grubel, 1993. "The New Growth Theory and Coasean economics: Institutions to capture externalities," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 129(3), pages 488-513, September. [Downloadable!] (restricted)
  15. Donald R. Davis & David E. Weinstein, 1998. "Market Access, Economic Geography and Comparative Advantage: An Empirical Assessment," Harvard Institute of Economic Research Working Papers 1850, Harvard - Institute of Economic Research.
    Other versions:
  16. Hagedoorn, John & Link, Albert N. & Vonortas, Nicholas S., 2000. "Research partnerships1," Research Policy, Elsevier, vol. 29(4-5), pages 567-586, April. [Downloadable!] (restricted)
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  18. repec:fth:harver:1473 is not listed on IDEAS
  19. Davis, Donald R. & Weinstein, David E., 2003. "Market access, economic geography and comparative advantage: an empirical test," Journal of International Economics, Elsevier, vol. 59(1), pages 1-23, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Robles Teigeiro, Luis & Ramos Carvajal, Carmen, 2007. "Una propuesta metodológica para la identificación y evaluación de clusters a partir de tablas Input-Output. Una aplicación para Andalucía/A Methodological Proposal for Getting the Sectorial Clust," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 25, pages 759-790, Diciembre. [Downloadable!] (restricted)
  2. Gerben Panne, van der & Wilfred Dolfsma, 2003. "The Geography of Innovativeness - New product announcements in The Netherlands," ERSA conference papers ersa03p334, European Regional Science Association. [Downloadable!]
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