Cases and Policies
- Handbooks of Research on Clusters series
Edited by Charlie Karlsson
Chapter 20: Institutions and Clusters
20 Institutions and clusters Ulrich Blum We show that transaction costs and external economies, which change institutional arrangements considerably, inﬂuence cluster structures. There are two types of clusters (i), the vertical cluster where a hub dominates suppliers that have settled in the vicinity and (ii), the horizontal cluster where ﬁrms have a common platform: historically a natural resource, today often knowledge and competences. Furthermore, non-cluster ﬁrms exist. We show, in a model, how these types emerge from the interaction found in ﬁrms and the interaction of ﬁrms within a network system. Changing transaction costs and externalities inﬂuence clusters and produce cluster dynamics. The sustainability of a cluster depends on its ability to stabilize the basis of its existence. This is easier for horizontal clusters, that can steadily develop their knowledge and competence platform, than for a vertical cluster which depends heavily on product life cycles. We give some evidence for clusters in East Germany, which presents an interesting example. The Treuhand1 atomized the giant combines, so that the rearrangements may be interpreted as results of fundamental market forces. Therefore major inﬂuences on the emerging institutional structure should stem from transaction costs and externalities. 1 The role of institutions in cluster economics Why are certain regions more successful than others? Why do some agglomerate whereas others decline? Can we think of economic development without the concentration of activities? What role do economic development policies play: are they able to trigger, to reinforce concentration or prevent existing agglomerations to...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.