Reflections on Cluster Policies
University of Groningen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)
Charles van Marrewijk
Utrecht University - Utrecht University School of Economics; International Business School Suzhou at XJTLU
October 23, 2012
CESifo Working Paper Series No. 3963
Economic activity tends to cluster. This results in productivity gains. For policy makers this offers an opportunity to formulate and promote policies that foster clustering of economic activity. Paradoxically, although agglomeration rents are often found in empirical research a rationale for cluster policies does not exist. A brief tour through the literature shows that cluster policies face more problems than is often assumed in policy circles. We reflect on the main issues at stake and conclude that, if not carefully applied, cluster policy may do more harm than good.
Number of Pages in PDF File: 22
Keywords: economic clusters, regional policy, agglomeration
JEL Classification: F400, F500, R500
Date posted: October 24, 2012
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