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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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Suggested Citation

  • Steven Klepper, 2010. "The Origin and Growth of Industry Clusters: The Making of Silicon Valley and Detroit," NBER Chapters, in: Cities and Entrepreneurship, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:11897
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    1. Bruce Fallick & Charles A. Fleischman & James B. Rebitzer, 2006. "Job-Hopping in Silicon Valley: Some Evidence Concerning the Microfoundations of a High-Technology Cluster," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 472-481, August.
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    More about this item

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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