Organizational Attributes and the Distribution of Rewards in a Region: Managerial Firms vs. Knowledge Clusters

Abstract

T his paper expands the organization theory and evidence on regional industrial agglomerations. We define regional economic activities according to the attributes of the organizations that populate a region and investigate how organizational characteristics influence macro-outcomes at a regional economic level. We focus on two dimensions emerging from two widely known organizational forms: the managerial corporation and the knowledge cluster with a marked orientation toward interfirm knowledge spillovers. We use an original data set of 146 U.S. cities to obtain variations in the extent to which they are populated by managerial firms or knowledge clusters. By utilizing city-level measures of managerial salaries, we test how the intensity of managerial corporation versus knowledge cluster characteristics affects the mean and dispersion of the "rewards" of cities. Our evidence suggests that higher managerial corporate characteristics lower the variability of rewards, while they have no effect on the mean of rewards. Higher-knowledge cluster characteristics produce both higher dispersion and higher expected rewards. We explain these results by looking at the different learning mechanisms of the two organizational types. In so doing, we highlight the role of intra-and interfirm knowledge processes as important sources of differences in the rewards of the two models. From an empirical point of view, results are confirmed using both patent-based and skill mobility-based measures of knowledge spillovers.

Regions Matter: How Localized Social Capital Affects Innovation and External Knowledge Acquisition

“…In other words, the production of knowledge in the local geographical environment affects the ability of firms to introduce innovations based on new ideas. Following Marshall (1890) and Jacobs (1969), various studies have analyzed knowledge spillovers and highlighted their localized nature (e.g., Alcácer and Chung 2007, Almeida and Kogut 1999, Bell and Zaheer 2007, Gambardella and Giarratana 2010, Jaffe et al 1993, Owen-Smith and Powell 2004, Sorenson 2003. In a seminal quantitative empirical study, Jaffe et al (1993) find that citations in patents tend to come from the same geographic areas and that the intensity of knowledge spillovers is uneven across regions because of different region-specific mechanisms.…”

Localized knowledge spillovers and skill‐biased performance

“…Our analysis then contributes even more directly to the literature stream initiated by Agarwal et al . (2007) regarding creative construction by suggesting a link between new organizational forms (i.e., entrepreneurship), geographical characteristics, and knowledge spillovers (Gambardella and Giarratana, 2010). We confirm the endogeneity of entrepreneurial opportunities (Dahl and Sorenson, 2009) and their potential to create increasing returns phenomena that sustain the long‐term growth of a region, even if we suggest that there can be different returns across skills.…”

Explanatory Factors of Entrepreneurship in Food and Beverage Clusters in Spain

“…The geographical and cognitive proximity found in a cluster positively influences the degree of interaction, cooperation, and trust between its specialized members, as well as the establishment of social networks and knowledge spillovers [72][73][74]. Furthermore, it could reduce the costs of creating and maintaining an adequate amount and intensity of social interactions [75].…”