Applied Evolutionary Economics and Economic Geography

Applied Evolutionary Economics and Economic Geography

Edited by Koen Frenken

Applied Evolutionary Economics and Economic Geography aims to further advance empirical methodologies in evolutionary economics, with a special emphasis on geography and firm location. It does so by bringing together a select group of leading scholars including economists, geographers and sociologists, all of whom share an interest in explaining the uneven distribution of economic activities in space and the historical processes that have produced these patterns.

Chapter 8: Networks and Heterogeneous Performance of Cluster Firms

Elisa Giuliani

Subjects: economics and finance, economics of innovation, evolutionary economics, geography, economic geography, innovation and technology, economics of innovation


8. Networks and heterogeneous performance of cluster firms Elisa Giuliani* 1. INTRODUCTION This chapter explores the relationship existing among the heterogeneous nature of firms in industrial clusters, their structural position in local networks and their performance. Following the rising interest for spatially agglomerated industrial firms (Piore and Sabel, 1984; Pyke et al., 1990; Porter, 1990; Krugman, 1991) and their learning and innovative potential (for example, Maskell, 2001a; Pinch et al., 2003), this chapter shows empirically that the performance of firms in clusters is related to firm-level knowledge endowments and their position in the knowledge network. A starting argument of this chapter is that of questioning the widely accepted view that knowledge is diffused in clusters in a rather pervasive and unstructured way, and that this is what affects the enhanced performance of cluster firms as compared to isolated ones. Most economists and economic geographers share this view. On the one hand, in fact, economists stress the public nature of knowledge (Arrow, 1962) and argue that geography facilitates inter-firm learning and innovation because of localized knowledge spillovers (for example, Jaffe et al., 1993); on the other, recent work done by economic geographers argues that it is not geography per se that matters for innovation, but it is a common institutional endowment and firms’ relational proximity (later defined), which facilitate the diffusion of knowledge and enhance collective learning in clusters (for example, Maskell and Malmberg, 1999; Capello and Faggian, 2005). A reason for this is the...

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