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Close Encounters: Evidence of the potential benefits of proximity to local industrial clusters


  • Thelma Quince
  • Hugh Whittaker


Local clusters of high technology small businesses are of increasing interest to politician and academics. This papers draws on a study of 237 high tech small businesses located throughout the UK. Combining information on activity and location, firms were grouped according to their potential degree of embeddedness in local industrial clusters. Businesses with differing levels of cluster involvement were then examined in terms of market structure, supportiveness of local cluster and their performance. The findings lend support to the role of untraded rather than traded interdependencies in the dynamics of localised high tech clusters. Research indicating compensating behaviour by high tech businesses disadvantaged by location is also supported, emphasising the need to consider not only the location and activity but also entrepreneurial objectives.

Suggested Citation

  • Thelma Quince & Hugh Whittaker, 2002. "Close Encounters: Evidence of the potential benefits of proximity to local industrial clusters," Working Papers wp235, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp235
    Note: PRO-2

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    References listed on IDEAS

    1. Matthew Gorton, 1999. "Spatial variations in markets served by UK-based small and medium-sized enterprises (SMEs)," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 11(1), pages 39-55, January.
    2. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    3. Hugh Whittaker, 1999. "Entrepreneurs as Co-Operative Capitalists: High Tech CEOs in the UK," Working Papers wp125, Centre for Business Research, University of Cambridge.
    4. Alfred Thwaites & Pooran Wynarczyk, 1996. "The Economic Performance of Innovative Small Firms in the South East Region and Elsewhere in the UK," Regional Studies, Taylor & Francis Journals, vol. 30(2), pages 135-149.
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    More about this item


    high technology small firms; business clusters; rural locations; untraded interdependencies;

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other

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