Why Do Some Places Succeed When Others Decline? A Social Interaction Model of Cluster Viability

Posted: 28 Apr 2009

Date Written: May 2009


One of the most convincing explanations papers generally provide concerning clusters in knowledge-based economies refers to the geographically bounded dimension of knowledge spillovers. Here, we shall underline that location decision externalities precede local knowledge spillovers in the explanation of cluster aggregate efficiency, which thus requires us to focus on the sequential process of location and the nature of interdependences in location decision-making. To that end, we mean to associate cluster emergence with the formation of locational norms, and to study the critical parameters of their stability. These parameters relate to the type of decision externalities among more or less cognitively distant firms, which influences the weight and the resulting ambivalent role of knowledge spillovers at the aggregate level of clusters. We suggest two theoretical propositions which we test within a simple and general norm location dynamics modeling framework. We then proceed to discuss the results so obtained by comparing them with an emerging related literature based on the life cycle and viability of clusters.

Keywords: clusters, location under decision externalities, cognitive distance, knowledge spillovers

JEL Classification: D83, L86, R12

Suggested Citation

Suire, Raphael and Vicente, Jérôme, Why Do Some Places Succeed When Others Decline? A Social Interaction Model of Cluster Viability (May 2009). Journal of Economic Geography, Vol. 9, Issue 3, pp. 381-404, 2009, Available at SSRN: https://ssrn.com/abstract=1394139 or http://dx.doi.org/lbn053

Raphael Suire (Contact Author)

University of Nantes - LEMNA ( email )

Nantes, 44000

Jérôme Vicente

Independent ( email )

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