Agglomerative Forces and Cluster Shapes
William R. Kerr
Harvard University - Entrepreneurial Management Unit
Scott Duke Kominers
University of Chicago - Becker Friedman Institute for Research in Economics
November 30, 2012
Harvard Business School Entrepreneurial Management Working Paper No. 11-061
We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model’s assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we con.rm these predictions using variations across patent technology clusters.
Number of Pages in PDF File: 55
Keywords: Agglomeration, Clusters, Networks, Industrial Organization, Silicon Valley, Entrepreneurship, Technology Flows, Patents.
JEL Classification: J2, J6, L1, L2, L6, O3, R1, R3working papers series
Date posted: December 16, 2010 ; Last revised: December 5, 2012
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