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Agglomerative Forces and Cluster Shapes

  • William R. Kerr

    ()

    (Harvard Business School, Entrepreneurial Management Unit)

  • Scott Duke Kominers

    ()

    (Harvard Business School)

We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we con.rm these predictions using variations across patent technology clusters.

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Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 11-061.

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Length: 55 pages
Date of creation: Dec 2010
Date of revision: Nov 2012
Handle: RePEc:hbs:wpaper:11-061
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