Handbooks of Research on Clusters series
Edited by Charlie Karlsson
David Emanuel Andersson and Åke E. Andersson 1 Introduction Spatial concentrations of activities that are economically related are often referred to as clusters. Clusters are the most obvious examples of agglomeration economies. Agglomeration economies exist because of various types of spatial friction, which give rise to spatial transaction costs such as transport and communication costs. These spatial transaction costs explain not only the emergence of clusters, but also the emergence and growth of all spatial concentrations of humans, such as cities, towns and villages. In agglomerations, both consumers and producers beneﬁt from lower costs of transporting conventional inputs and outputs. Even more signiﬁcant are beneﬁts associated with less tangible knowledge inputs into production processes. Good access to other producers and consumers is associated with good access to new and tacit knowledge. The agglomeration economies that derive from the production and dissemination of knowledge exist in all industries, but tend to be especially important in the production of goods and services with high knowledge content. And cultural industries, such as those that supply art or entertainment products, typically involve both creativity (new knowledge) and learning-by-doing (tacit knowledge). The location of the ﬁlm industry in a very small number of metropolitan areas is an illustration of agglomeration economies in a cultural industry. The most important spatial clustering of ﬁlm industry are in Hong Kong, Mumbai and Los Angeles. The analysis of the ﬁlm industry cluster and its causes is concentrated on Los Angeles with its employment of close to...
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