IDEAS home Printed from https://ideas.repec.org/a/eee/jbvent/v26y2011i1p104-123.html
   My bibliography  Save this article

Performance differentials within geographic clusters

Author

Listed:
  • McCann, Brian T.
  • Folta, Timothy B.

Abstract

Increasing evidence indicates that firms benefit from a location in a geographic cluster of similar firms. The literature is nearly silent, however, on whether agglomeration economies accrue symmetrically across clustered firms. Drawing from the knowledge-based view, we investigate which firms benefit most from agglomeration and discuss how the implications for entrepreneurs are significant if some firms benefit more from geographic agglomeration than others. We investigate three particular firm attributes that may accentuate or mitigate benefits tied to participation in a cluster. We test our hypotheses on a sample of biotechnology firms and find strong evidence that firms benefit asymmetrically. Younger firms and firms with higher knowledge stocks benefit more from agglomeration.

Suggested Citation

  • McCann, Brian T. & Folta, Timothy B., 2011. "Performance differentials within geographic clusters," Journal of Business Venturing, Elsevier, vol. 26(1), pages 104-123, January.
    • Handle: RePEc:eee:jbvent:v:26:y:2011:i:1:p:104-123
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0883-9026(09)00041-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bruce Kogut & Udo Zander, 1992. "Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology," Organization Science, INFORMS, vol. 3(3), pages 383-397, August.
    2. Tarun Khanna, 1998. "The Scope of Alliances," Organization Science, INFORMS, vol. 9(3), pages 340-355, June.
    3. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    4. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
    5. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    6. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
    7. Richard L. Daft & Robert H. Lengel, 1986. "Organizational Information Requirements, Media Richness and Structural Design," Management Science, INFORMS, vol. 32(5), pages 554-571, May.
    8. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-938, July.
    9. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    10. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    11. Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
    12. Arthur, W. Brian, 1990. "'Silicon Valley' locational clusters: when do increasing returns imply monopoly?," Mathematical Social Sciences, Elsevier, vol. 19(3), pages 235-251, June.
    13. Phillip Phan & Donald S. Siegel & Mike Wright, 2016. "Science Parks and Incubators: Observations, Synthesis and Future Research," World Scientific Book Chapters, in: Phillip H Phan & Sarfraz A Mian & Wadid Lamine (ed.), TECHNOLOGY ENTREPRENEURSHIP AND BUSINESS INCUBATION Theory • Practice • Lessons Learned, chapter 9, pages 249-272, World Scientific Publishing Co. Pte. Ltd..
    14. Gautam Ahuja & Riitta Katila, 2001. "Technological acquisitions and the innovation performance of acquiring firms: a longitudinal study," Strategic Management Journal, Wiley Blackwell, vol. 22(3), pages 197-220, March.
    15. Joshua S. Gans & David H. Hsu & Scott Stern, 2008. "The Impact of Uncertain Intellectual Property Rights on the Market for Ideas: Evidence from Patent Grant Delays," Management Science, INFORMS, vol. 54(5), pages 982-997, May.
    16. David, Paul A. & Rosenbloom, Joshua L., 1990. "Marshallian factor market externalities and the dynamics of industrial localization," Journal of Urban Economics, Elsevier, vol. 28(3), pages 349-370, November.
    17. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    18. Ron Martin & Peter Sunley, 2003. "Deconstructing clusters: chaotic concept or policy panacea?," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 5-35, January.
    19. Bruce Kogut & Udo Zander, 1996. "What Firms Do? Coordination, Identity, and Learning," Organization Science, INFORMS, vol. 7(5), pages 502-518, October.
    20. Tripsas, Mary, 1997. "Surviving Radical Technological Change through Dynamic Capability: Evidence from the Typesetter Industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 6(2), pages 341-377, March.
    21. Arnold C. Cooper & William C. Dunkelberg, 1987. "Entrepreneurial Research: Old Questions, New Answers and Methodological Issues," Entrepreneurship Theory and Practice, , vol. 11(3), pages 11-24, January.
    22. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
    23. Glenn Hoetker, 2007. "The use of logit and probit models in strategic management research: Critical issues," Strategic Management Journal, Wiley Blackwell, vol. 28(4), pages 331-343, April.
    24. Bruce Kogut, 1988. "Joint ventures: Theoretical and empirical perspectives," Strategic Management Journal, Wiley Blackwell, vol. 9(4), pages 319-332, July.
    25. Catherine Beaudry & Stefano Breschi, 2003. "Are firms in clusters really more innovative?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(4), pages 325-342.
    26. Popp David & Juhl Ted & Johnson Daniel K.N., 2004. "Time In Purgatory: Examining the Grant Lag for U.S. Patent Applications," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-45, November.
    27. Udo Staber, 2001. "Spatial Proximity and Firm Survival in a Declining Industrial District: The Case of Knitwear Firms in Baden-Wu¨rttemberg," Regional Studies, Taylor & Francis Journals, vol. 35(4), pages 329-341.
    28. J. Myles Shaver & Fredrick Flyer, 2000. "Agglomeration economies, firm heterogeneity, and foreign direct investment in the United States," Strategic Management Journal, Wiley Blackwell, vol. 21(12), pages 1175-1193, December.
    29. Folta, Timothy B. & Cooper, Arnold C. & Baik, Yoon-suk, 2006. "Geographic cluster size and firm performance," Journal of Business Venturing, Elsevier, vol. 21(2), pages 217-242, March.
    30. Jasjit Singh, 2005. "Collaborative Networks as Determinants of Knowledge Diffusion Patterns," Management Science, INFORMS, vol. 51(5), pages 756-770, May.
    31. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    32. Baptista, Rui & Swann, Peter, 1998. "Do firms in clusters innovate more?," Research Policy, Elsevier, vol. 27(5), pages 525-540, September.
    33. Dushnitsky, Gary & Lenox, Michael J., 2006. "When does corporate venture capital investment create firm value?," Journal of Business Venturing, Elsevier, vol. 21(6), pages 753-772, November.
    34. Lori Rosenkopf & Paul Almeida, 2003. "Overcoming Local Search Through Alliances and Mobility," Management Science, INFORMS, vol. 49(6), pages 751-766, June.
    35. Rotemberg, Julio J. & Saloner, Garth, 2000. "Competition and human capital accumulation: a theory of interregional specialization and trade," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 373-404, July.
    36. Robert M. Grant & Charles Baden‐Fuller, 2004. "A Knowledge Accessing Theory of Strategic Alliances," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 61-84, January.
    37. Mark Casson (ed.), 1990. "Entrepreneurship," Books, Edward Elgar Publishing, number 537.
    38. Donna Marie DeCarolis & David L. Deeds, 1999. "The impact of stocks and flows of organizational knowledge on firm performance: an empirical investigation of the biotechnology industry," Strategic Management Journal, Wiley Blackwell, vol. 20(10), pages 953-968, October.
    39. Gary Dushnitsky & Michael J. Lenox, 2005. "When do firms undertake R&D by investing in new ventures?," Strategic Management Journal, Wiley Blackwell, vol. 26(10), pages 947-965, October.
    40. Prashant Kale & Harbir Singh & Howard Perlmutter, 2000. "Learning and protection of proprietary assets in strategic alliances: building relational capital," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 217-237, March.
    41. Andrew C. Inkpen & Mary M. Crossan, 1995. "Believing Is Seeing: Joint Ventures and Organization Learning," Journal of Management Studies, Wiley Blackwell, vol. 32(5), pages 595-618, September.
    42. Pisano, Gary P., 1991. "The governance of innovation: Vertical integration and collaborative arrangements in the biotechnology industry," Research Policy, Elsevier, vol. 20(3), pages 237-249, June.
    43. Joan Penner‐Hahn & J. Myles Shaver, 2005. "Does international research and development increase patent output? An analysis of Japanese pharmaceutical firms," Strategic Management Journal, Wiley Blackwell, vol. 26(2), pages 121-140, February.
    44. Almeida, Paul & Kogut, Bruce, 1997. "The Exploration of Technological Diversity and the Geographic Localization of Innovation," Small Business Economics, Springer, vol. 9(1), pages 21-31, February.
    45. Visser, Evert-jan, 1999. "A Comparison of Clustered and Dispersed Firms in the Small-Scale Clothing Industry of Lima," World Development, Elsevier, vol. 27(9), pages 1553-1570, September.
    46. Stuart, Toby & Sorenson, Olav, 2003. "The geography of opportunity: spatial heterogeneity in founding rates and the performance of biotechnology firms," Research Policy, Elsevier, vol. 32(2), pages 229-253, February.
    47. Zucker, Lynne G & Darby, Michael R & Brewer, Marilynn B, 1998. "Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises," American Economic Review, American Economic Association, vol. 88(1), pages 290-306, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brian T. McCann & Timothy B. Folta, 2009. "Demand‐ and Supply‐Side Agglomerations: Distinguishing between Fundamentally Different Manifestations of Geographic Concentration," Journal of Management Studies, Wiley Blackwell, vol. 46(3), pages 362-392, May.
    2. Pe'er, Aviad & Keil, Thomas, 2013. "Are all startups affected similarly by clusters? Agglomeration, competition, firm heterogeneity, and survival," Journal of Business Venturing, Elsevier, vol. 28(3), pages 354-372.
    3. Wonsang Ryu & Thomas H. Brush & Joonhyung Bae, 2023. "How agglomeration affects alliance governance and innovation performance: The role of cluster size," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 297-310, January.
    4. Brian T. McCann & Jeffrey J. Reuer & Nandini Lahiri, 2016. "Agglomeration and the choice between acquisitions and alliances: An information economics perspective," Strategic Management Journal, Wiley Blackwell, vol. 37(6), pages 1085-1106, June.
    5. Grashof, Nils, 2020. "Putting the watering can away Towards a targeted (problem-oriented) cluster policy framework," Papers in Innovation Studies 2020/4, Lund University, CIRCLE - Centre for Innovation Research.
    6. Wang, Liang & Tan, Justin & Li, Wan, 2018. "The impacts of spatial positioning on regional new venture creation and firm mortality over the industry life cycle," Journal of Business Research, Elsevier, vol. 86(C), pages 41-52.
    7. Shivaram V. Devarakonda & Brian T. McCann & Jeffrey J. Reuer, 2018. "Marshallian Forces and Governance Externalities: Location Effects on Contractual Safeguards in Research and Development Alliances," Organization Science, INFORMS, vol. 29(6), pages 1112-1129, December.
    8. Dirk Crass & Christian Rammer & Birgit Aschhoff, 2019. "Geographical clustering and the effectiveness of public innovation programs," The Journal of Technology Transfer, Springer, vol. 44(6), pages 1784-1815, December.
    9. Feldman, Maryann P. & Kogler, Dieter F., 2010. "Stylized Facts in the Geography of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 381-410, Elsevier.
    10. Gurneeta Vasudeva & Jennifer W. Spencer & Hildy J. Teegen, 2013. "Bringing the Institutional Context Back In: A Cross-National Comparison of Alliance Partner Selection and Knowledge Acquisition," Organization Science, INFORMS, vol. 24(2), pages 319-338, April.
    11. Dominique Dufour & Eric Nasica & Dominique Torre, 2016. "Clusters et efficacité du capital-risque: une analyse des stratégies différenciées des fonds indépendants et des fonds industriels," GREDEG Working Papers 2016-33, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    12. Chila, Vilma, 2021. "Knowledge dynamics in employee entrepreneurship : Implications for parents and offspring," Other publications TiSEM a1f5d18c-783b-4af6-8414-6, Tilburg University, School of Economics and Management.
    13. Al-Laham, Andreas & Souitaris, Vangelis, 2008. "Network embeddedness and new-venture internationalization: Analyzing international linkages in the German biotech industry," Journal of Business Venturing, Elsevier, vol. 23(5), pages 567-586, September.
    14. Hervas-Oliver,Jose-Luis & Sempere-Ripoll,Francisca, 2014. "Agglomerations and firm performance: how does it work, who benefits and how much?," INGENIO (CSIC-UPV) Working Paper Series 201411, INGENIO (CSIC-UPV), revised 01 Dec 2014.
    15. Coombs, Joseph E. & Mudambi, Ram & Deeds, David L., 2006. "An examination of the investments in U.S. biotechnology firms by foreign and domestic corporate partners," Journal of Business Venturing, Elsevier, vol. 21(4), pages 405-428, July.
    16. Nils Grashof, 2020. "Sinking or swimming in the cluster labour pool? A firm-specific analysis of the effect of specialized labour," Jena Economics Research Papers 2020-006, Friedrich-Schiller-University Jena.
    17. Liang Wang & Justin Tan, 2019. "Social Structure of Regional Entrepreneurship: The Impacts of Collective Action of Incumbents on De Novo Entrants," Entrepreneurship Theory and Practice, , vol. 43(5), pages 855-879, September.
    18. Gilbert, Brett Anitra & McDougall, Patricia P. & Audretsch, David B., 2008. "Clusters, knowledge spillovers and new venture performance: An empirical examination," Journal of Business Venturing, Elsevier, vol. 23(4), pages 405-422, July.
    19. Nils Grashof & Dirk Fornahl, 2021. "“To be or not to be” located in a cluster?—A descriptive meta-analysis of the firm-specific cluster effect," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 541-591, December.
    20. Lee, Chang-Yang, 2009. "Do firms in clusters invest in R&D more intensively? Theory and evidence from multi-country data," Research Policy, Elsevier, vol. 38(7), pages 1159-1171, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbvent:v:26:y:2011:i:1:p:104-123. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusvent .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.