Industrial Location Economics

Industrial Location Economics

Edited by Philip McCann

Because space is not homogenous, economic activities occur in different locations. Understanding the reasons behind this and understanding exactly how industries are spatially organized is the central theme of this book. Industrial Location Economics discusses different aspects of industrial location behaviour from a variety of theoretical and empirical perspectives. Each of the analytical traditions provides insights into the nature of industrial location behaviour and the factors which can influence it.

Chapter 8: Theory, Methods and a Cross-Metropolitan Comparison of Business Clustering

Edward J. Feser and Stuart H. Sweeney

Subjects: economics and finance, industrial economics, regional economics, geography, economic geography, urban and regional studies, regional economics

Extract

8. Theory, methods and a crossmetropolitan comparison of business clustering Edward J. Feser and Stuart H. Sweeney University of North Carolina at Chapel Hill, USA and University of California at Santa Barbara, USA INTRODUCTION The notion that interfirm proximity confers important advantages of cost, productivity, flexibility, learning, and innovation is postulated in a variety of literatures, from the parsimonious spatial equilibrium tradition of regional scientists to the contextual and place-specific analyses of geographers studying new industrial districts, flexible specialization, post-Fordist accumulation regimes, and the innovative milieu. Management specialists and students of industrial organization have also explored the strategic implications of business clustering (for example Porter, 1990, 1998, 2000), while initiatives designed to take advantage of existing or emerging clusters are the subject of intense interest among local and regional policy-makers in the USA and Europe (Held, 1996; Jacobs and de Man, 1996; Rosenfeld, 1997; Roelandt and den Hertog, 1999; Hill and Brennan, 2000). Recent economic trends raise important questions about possible changing patterns in business clustering. The 1990s have witnessed significant shifts in the way companies do business and create value (Friedman, 1999). Information technologies have permitted the scaling back of costly procedures designed to compensate for imperfect intelligence regarding the delivery and quality of supplies, shifts in demand for core products, and the changing tastes of consumers (Lundvall, 1999). Indeed, innovations in the way information is managed and distributed are believed to be a key factor in the period of sustained growth and low inflation...

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