Diagnosing Cluster Competitiveness Using Firm-Level Data in the Profit–Growth Nexus Framework

Competitiveness is defined at the level of firms, clusters, regions, and nations. Although researchers have extensively explored the concept of competitiveness in each of these respective categories, an understanding of the relationship between levels of competitiveness is lacking. The simple aggregation of indicators to approximate broader categories of competitiveness is challenged as a robust solution. This paper proposes an alternative solution to aggregating firm-level competitiveness, based on the profit–growth nexus. Using data collected from SMEs in two ICT clusters, the size–profit–growth relationships were tested. Based on 83 Hungarian and 71 Australian responses, positive relationships were found in both samples, demonstrating high cluster-level competitiveness. It is argued that this outcome better represents cluster-level competitiveness based on firm-level data, than other – linear and additive – aggregation methods. However, a comparative examination of the data across the clusters showed significant differences between the results of the two samples, ascertaining limitations for the generalisability of the results.