The Rise of the Creative Class

Corruption and Growth

Entrepreneurial ecosystems have emerged as a popular concept to explain the persistence of high–growth entrepreneurship within regions. However, as a theoretical concept ecosystems remain underdeve...

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The relational organization of entrepreneurial ecosystems

This book opens a fresh chapter in the debate on local enterprise clusters and their strategies for upgrading in the global economy. The authors employ a novel conceptual framework in their research on industrial clusters in Europe, Latin America and Asia and provide new perspectives and insights for researchers and policymakers alike.

Governance in global value chains

Why do firms cluster near one another? We test Marshall's theories of industrial agglomeration by examining which industries locate near one another, or coagglomerate. We construct pairwise coagglomeration indices for US manufacturing industries from the Economic Census. We then relate coagglomeration levels to the degree to which industry pairs share goods, labor, or ideas. To reduce reverse causality, where collocation drives input-output linkages or hiring patterns, we use data from UK industries and from US areas where the two industries are not collocated. All three of Marshall's theories of agglomeration are supported, with input-output linkages particularly important. (JEL L14, L60, O33, R23, R32)

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What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns

This paper examines the role of regional clusters in regional entrepreneurship. We focus on the distinct influences of convergence and agglomeration on growth in the number of start-up firms as well as in employment in these new firms in a given region-industry. While reversion to the mean and diminishing returns to entrepreneurship at the region-industry level can result in a convergence effect, the presence of complementary economic activity creates externalities that enhance incentives and reduce barriers for new business creation. Clusters are a particularly important way through which location-based complementarities are realized. The empirical analysis uses a novel panel dataset from the Longitudinal Business Database of the Census Bureau and the U.S. Cluster Mapping Project (Porter, 2003). Using this dataset, there is significant evidence of the positive impact of clusters on entrepreneurship. After controlling for convergence in start-up activity at the region-industry level, industries located in regions with strong clusters (i.e. a large presence of other related industries) experience higher growth in new business formation and start-up employment. Strong clusters are also associated with the formation of new establishments of existing firms, thus influencing the location decision of multiestablishment firms. Finally, strong clusters contribute to start-up firm survival.

/pdf/clusters-and-entrepreneurship-55x9sdjtdr.pdf

Clusters and Entrepreneurship

This article examines the role of regional clusters in regional entrepreneurship. We focus on the distinct influences of convergence and agglomeration on growth in the number of start-up firms as well as in employment in these new firms in a given region-industry. While reversion to the mean and diminishing returns to entrepreneurship at the region-industry level can result in a convergence effect, the presence of complementary economic activity creates externalities that enhance incentives and reduce barriers for new business creation. Clusters are a particularly important way through which location-based complementarities are realized. The empirical analysis uses a novel panel dataset from the Longitudinal Business Database of the Census Bureau and the US Cluster Mapping Project. Using this dataset, there is significant evidence of the positive impact of clusters on entrepreneurship. After controlling for convergence in start-up activity at the regionindustry level, industries located in regions with strong clusters (i.e. a large presence of other related industries) experience higher growth in new business formation and start-up employment. Strong clusters are also associated with the formation of new establishments of existing firms, thus influencing the location decision of multi-establishment firms. Finally, strong clusters contribute to start-up firm survival.

/pdf/clusters-and-entrepreneurship-3ni62vj4yk.pdf

Clusters and entrepreneurship

This paper evaluates the role of regional cluster composition in the economic performance of industries, clusters and regions. On the one hand, diminishing returns to specialization in a location can result in a convergence effect: the growth rate of an industry within a region may be declining in the level of activity of that industry. At the same time, positive spillovers across complementary economic activities provide an impetus for agglomeration: the growth rate of an industry within a region may be increasing in the size and “strength” (i.e., relative presence) of related economic sectors. Building on Porter (1998, 2003), we develop a systematic empirical framework to identify the role of regional clusters – groups of closely related and complementary industries operating within a particular region – in regional economic performance. We exploit newly available data from the US Cluster Mapping Project to disentangle the impact of convergence at the region-industry level from agglomeration within clusters. We find that, after controlling for the impact of convergence at the narrowest unit of analysis, there is significant evidence for cluster-driven agglomeration. Industries participating in a strong cluster register higher employment growth as well as higher growth of wages, number of establishments, and patenting. Industry and cluster level growth also increases with the strength of related clusters in the region and with the strength of similar clusters in adjacent regions. Importantly, we find evidence that new industries emerge where there is a strong cluster environment. Our analysis also suggests that the presence of strong clusters in a region enhances growth opportunities in other industries and clusters. Overall, these findings highlight the important role of cluster-based agglomeration in regional economic performance.

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Clusters, Convergence, and Economic Performance

Competitiveness has become a central preoccupation of both advanced and developing countries in an increasingly open and integrated world economy. Despite its acknowledged importance, the concept of competitiveness is often misunderstood. Here, we define competitiveness concretely, show its relationship to a nation's standard of living, and outline a conceptual framework for understanding its causes. The Business Competitiveness Index (BCI), based on this conceptual framework, provides a data-rich approach to measuring and analyzing the fundamental competitiveness of a large number of countries in a comparative context .This year's BCI includes 101 countries, up from 80 last year. Our aim is to rank country competitiveness across countries, identify individual countries' competitive strengths and weaknesses, reveal the trends in competitiveness in the global economy, and extend our basic knowledge about the sources of competitiveness and the process of economic development. Most discussion of competitiveness and economic development is still focused on the macroeconomic, political , legal, and social circumstances that underpin a successful economy. It is well understood that sound fiscal and monetary policies, a trusted and efficient legal system, a stable set of democratic institutions, and progress on social conditions contribute greatly to a healthy economy. However, these broader conditions are necessary but not sufficient.They provide the opportunity to create wealth but do not themselves create wealth.Wealth is actually created at the microeconomic level of the economy, rooted in the sophistication of actual companies as well as in the quality of the microeconomic business environment in which a nation's firms compete. Unless these microeco-nomic capabilities improve, macroeconomic, political, legal, and social reforms will not bear full fruit. Beginning in 1998, we began an effort to examine statistically the microeconomic foundations of competitiveness and prosperity across a wide array of countries. This is a daunting task, given the need to measure and compare the complex array of national circumstances that support a high and sustainable level of productivity.The effort aims to move beyond the examination of broad, aggregate variables typical of most economic growth analyses, and provide a framework for countries and companies to understand their detailed competitive strengths and weaknesses. It also aims to be as rigorous as possible, verifying the importance of variables statistically and using statistical techniques to weight the contribution of individual variables. Finally, we know that improvement in competitiveness is not a simple linear process but one where nations at different levels of development face different challenges and …

The Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index

https://www.nber.org/system/files/working_papers/w18250/w18250.pdf

Mercedes Delgado

Papers

Clusters and Entrepreneurship

Clusters and entrepreneurship

Clusters, Convergence, and Economic Performance

The Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index

Clusters, Convergence, and Economic Performance