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Industrial clusters, firm location and productivity – Some empirical evidence for Danish firms

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Author Info
Strøjer Madsen, Erik () (Department of Economics, Aarhus School of Business)
Smith, Valdemar () (Department of Economics, Aarhus School of Business)
Dilling-Hansen, Mogens () (University of Aarhus)

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Abstract

According to the economic literature, industrial clusters are groups of firms on the same

location composing a production system with spillovers that can be vertical and/or

horizontal. This paper focuses on horizontal clusters by exploring the spatial

distribution of industrial clusters in Denmark. The key issue in the theoretical part of the

paper is whether firms located in industrial clusters are more productive than their

counterparts located separately outside industrial agglomerations. Firms located in

clusters are potentially more productive than other firms because of the agglomeration

advantages of e.g. networks, knowledge spillovers, human capital mobility etc. In the

empirical part of the paper, industrial clusters are identified using municipalities as the

spatial dimension. In the first part of the analysis, clusters are identified at the NACE-2

digit industrial level. Next, using firm-level data for the 1990s the relative ‘cluster-firm’

productivity is estimated. The study finds evidence of a significantly higher productivity

in clusters. However, the magnitude of the cluster advantages varies a lot across

industries and is highest in textile.

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Publisher Info
Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 03-26.

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Length: 17 pages
Date of creation: 26 May 2003
Date of revision:
Handle: RePEc:hhs:aareco:2003_026

Contact details of provider:
Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research
Keywords: Industrial clusters; productivity;

Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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  1. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-90, October. [Downloadable!] (restricted)
    Other versions:
  2. Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
    • Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-52, December. [Downloadable!] (restricted)
  3. Glenn Ellison & Edward L. Glaeser, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," Harvard Institute of Economic Research Working Papers 1862, Harvard - Institute of Economic Research.
    Other versions:
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