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Cluster Life Cycles - Dimensions and Rationales of Cluster Development

Author

Listed:
  • Max-Peter Menzel

    () (University of Bern, Institute of Geography, Economic Geography and Regional Studies)

  • Dirk Fornahl

    () (University of Karlsruhe (TH), Institute for Economic Policy Research (IWW), and Max Planck Institute of Economics, Jena)

Abstract

We present a model that explains how a cluster moves through a life cycle and why this movement differs from the industry life cycle. The model is based on three key processes: the changing heterogeneity in the cluster describes the movement of the cluster through the life cycle; the geographical absorptive capacity enables clustered companies to take advantage of a larger diversity of knowledge and the stronger convergence of clustered companies compared to non-clustered companies results in a reduction of heterogeneity. We apply these processes to four stages of the cluster life cycle: emergence, growth, sustainment and decline.

Suggested Citation

  • Max-Peter Menzel & Dirk Fornahl, 2007. "Cluster Life Cycles - Dimensions and Rationales of Cluster Development," Jena Economic Research Papers 2007-076, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2007-076
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    References listed on IDEAS

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    More about this item

    Keywords

    cluster evolution; life cycle; heterogeneity;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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