Cluster Life Cycles - Dimensions and Rationales of Cluster Development

46 Pages Posted: 2 Nov 2007

See all articles by Max-Peter Menzel

Max-Peter Menzel

University of Bern

Dirk Fornahl

Centre for Regional and Innovation Economics; University of Karlsruhe; Max Planck Insitute of Economics

Date Written: October 30, 2007

Abstract

We present a model that explains how a cluster moves through a life cycle and why this movement differs from the industry life cycle. The model is based on three key processes: the changing heterogeneity in the cluster describes the movement of the cluster through the life cycle; the geographical absorptive capacity enables clustered companies to take advantage of a larger diversity of knowledge and the stronger convergence of clustered companies compared to non-clustered companies results in a reduction of heterogeneity. We apply these processes to four stages of the cluster life cycle: emergence, growth, sustainment and decline.

Keywords: cluster evolution, life cycle, heterogeneity

JEL Classification: R11, O30, L25

Suggested Citation

Menzel, Max-Peter and Fornahl, Dirk, Cluster Life Cycles - Dimensions and Rationales of Cluster Development (October 30, 2007). Jena Economic Research Paper No. 2007-076, Available at SSRN: https://ssrn.com/abstract=1025970 or http://dx.doi.org/10.2139/ssrn.1025970

Max-Peter Menzel (Contact Author)

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland

Dirk Fornahl

Centre for Regional and Innovation Economics ( email )

Universitaetsallee GW I
Bremen, D-28334
Germany

University of Karlsruhe ( email )

Postbox
76128 Karlsruhe, DE 76128
Germany

Max Planck Insitute of Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

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