International Handbook on the Economics of Integration, Volume II
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International Handbook on the Economics of Integration, Volume II

Competition, Spatial Location of Economic Activity and Financial Issues

Edited by Miroslav N. Jovanović

With this Handbook, Miroslav Jovanović has provided readers with both an excellent stand-alone original reference book as well as an integral part of a comprehensive three-volume set. This introduction into a rich and expanding academic and practical world of international economic integration also provides a theoretical and analytical framework to the reader, presenting select analytical studies and encouraging further research.
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Chapter 12: Industrial Clusters and Economic Integration: Theoretic Concepts and an Application to the European Metropolitan Region Nuremberg

Nicole Litzel and Joachim Möller


Nicole Litzel and Joachim Möller* 1 INTRODUCTION Economic integration typically goes along with disintegration of production through outsourcing and offshoring (Feenstra, 1998). As horizontal and vertical links between companies become more and more pronounced, companies’ value chains within regions and regional value systems are increasingly organised by production and innovation clusters, that is ‘geographically proximate group(s) of interconnected companies, suppliers, service providers and associated institutions in a particular field, linked by externalities of various types’ (Porter, 2003: 562). Firm clusters are a widespread empirical phenomenon and cluster promotion has become a cornerstone of regional economic policy. Clusters are strongly linked to the realisation of localisation economies according to the ‘Marshallian trinity’, that is, knowledge spillovers, input sharing and labour market pooling (Marshall, 1890; Rosenthal and Strange, 2003). Also in New Economic Geography industrial clustering is an important issue (Fujita et al., 1999, ch. 16). Moreover, cluster policies might play a key role in the concept of the European metropolitan region. It can be assumed that production clusters today tend to have a higher geographical extension than clusters in former times that were often based on raw material and resource availability or infrastructure, for example. Given favourable transport facilities and a situation of declining border impediments, production clusters might increasingly cross borders. Such supra-national forms for the division of labour can be seen as a specific form of how economic integration is proceeding. In this chapter we argue that in a world of economic integration, clusters can be expected...

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