Why do some places succeed when others decline? A social interaction model of cluster viability

Abstract

One of the most convincing explanations papers generally provide concerning clusters in knowledge-based economies refers to the geographically bounded dimension of knowledge spillovers. Here, we shall underline that location decision externalities precede local knowledge spillovers in the explanation of cluster aggregate efficiency, which thus requires us to focus on the sequential process of location and the nature of interdependences in location decision-making. To that end, we mean to associate cluster emergence with the formation of locational norms, and to study the critical parameters of their stability. These parameters relate to the type of decision externalities among more or less cognitively distant firms, which influences the weight and the resulting ambivalent role of knowledge spillovers at the aggregate level of clusters. We suggest two theoretical propositions which we test within a simple and general norm location dynamics modeling framework. We then proceed to discuss the results so obtained by comparing them with an emerging related literature based on the life cycle and viability of clusters.

Industrial Dynamics and Clusters: A Survey

“…There is agreement that the topic of cluster lifecycle deserves a different theory than the product or industry lifecycle model, since the evolution of a single cluster will only be partially correlated to the growth of the industry in question HUBER, 2012). For example, a cluster's development may be driven by hypes due to herding behaviour in location decisions (APPOLD, 1995;DALLA PRIA and VICENTE, 2006;SUIRE and VICENTE, 2009). Furthermore, cluster development depends on localised collective action, for example, setting up training institutes (BOSCHMA, 1997), in developing technical standards (VICENTE and SUIRE, 2007;VICENTE et al, 2011), mobilising political and public support (SINE and LEE, 2009) and overcoming increased scarcity of land, labour and infrastructure (STAM and MARTIN, 2012).…”

Spatial concentration and location dynamics in logistics: the case of a Dutch province

“…R&D companies abounds (e.g. Martin and Ottaviano, 1999;Alcácer and Chung, 2007;Suire and Vicente, 2008). Little is known about this relationship for logistics firms.…”

Relations among Clusters in Six Chinese City Regions

“…Since Krugman, the cluster theory has received strong mathematical support. Furthermore, the world has witnessed some actual IT cluster successes, particularly the growth of Silicon Valley during the 1980s (Bresnahan et al, 2001;Ferrary & Granovetter, 2009;Saxenian, 1990), and failures, such as the bursting of the dot-com bubble (Florida & Kenney, 1990;Suire & Vicente, 2009). Clusters can be found in almost any industry, such as life sciences (Gertler & Vinodrai, 2009;Powell et al, 2005), financial industry (Pandit et al, 2001), and motor-sport industry (Henry & Pinch, 2000).…”