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Industrial Clusters and Economic Performance in Brazil


  • Jose Claudio Pires
  • Tulio Cravo
  • Simon Lodato
  • Caio Piza


Industrial clusters, which are commonly targeted to receive financial support allocated to locally based development projects, are seen as an effective industrial policy tool for improving productivity and generating employment. Nevertheless, identifying clusters and assessing their economic performance is a challenge for policymakers. This paper aims to address this challenge by identifying the location of clusters based on neighbor relationships and specialization in Brazil and providing some insights on their effects on employment generation. The paper uses both Location Quotient and Local Indicator of Spatial Association to identify potential clusters in 27 industrial sectors in 5564 Brazilian municipalities. In addition, it uses annual municipal panel data for 2006-2009 to assess whether the presence of potential clusters is correlated with employment generation. The results show that clusters located in municipalities whose neighbors have similar industrial structures perform better than those that present industry specialization only.

Suggested Citation

  • Jose Claudio Pires & Tulio Cravo & Simon Lodato & Caio Piza, 2013. "Industrial Clusters and Economic Performance in Brazil," OVE Working Papers 0513, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
  • Handle: RePEc:idb:ovewps:0513

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    1. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8mc0ghsn is not listed on IDEAS
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    Cited by:

    1. Reinhold Kosfeld & Mirko Titze, 2014. "Benchmark Value Added Chains and Regional Clusters in German R&D Intensive Industries," MAGKS Papers on Economics 201437, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Peter Knorringa & Khalid Nadvi, 2016. "Rising Power Clusters and the Challenges of Local and Global Standards," Journal of Business Ethics, Springer, vol. 133(1), pages 55-72, January.
    3. Reinhold Kosfeld & Mirko Titze, 2014. "Benchmark Value Added Chains and Regional Clusters in German R&D Intensive Industries," ERSA conference papers ersa14p1396, European Regional Science Association.
    4. Christian Ketels, 2015. "Competitiveness and Clusters: Implications for a New European Growth Strategy," WWWforEurope Working Papers series 84, WWWforEurope.
    5. Iritié, B. G. Jean Jacques, 2016. "Economic issues of innovation clusters-based industrial policy : a critical overview," EconStor Preprints 142746, ZBW - German National Library of Economics.

    More about this item


    Industrial cluster; regional economic development; spatial independence;

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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