Entrepreneurship: The Role of Cluster Theoretical Perspectives and Empirical Evidence from Germany

Abstract

Little theoretical or empirical research existsregarding the effect of clusters on entrepreneurship at the regional levelbecause of limitations surrounding concepts, theory, and methodology.Thepurpose of this study is to advance knowledge of clusters and to explain theirimpact on entrepreneurship. The paper examines entrepreneurship both within and outside of areas withclusters, clusters with external networks, and industrialagglomerations.A literature review provides information regarding theoryand hypotheses regarding the influence of clusters and of industrialagglomerations on entrepreneurship. Based on this previous research, three hypotheses are posed.To testthese hypotheses, data were attained from a variety of quantitative andqualitative sources, including the German Federal Labour Office(GFLO).This study did control for the four influential factors of supraregional factors, regional factors different from clusters, sensitivity ofresults to the aggregation of regional clusters, and spatialautocorrelation. The results of the data analysis indicate the followingfindings:clusters rather than industrial agglomerations do have an effecton entrepreneurship and clusters are better than pure market mechanisms tofoster entrepreneurship.(AKP)

Keywords: German Federal Labour Office, Industry clusters, Price signals, External networks, Public policies, Regions, Socioeconomic factors, Clusters