Clusters and Upgrading: A Purposeful Approach

Organizations and Markets in Emerging Economies, 2010

28 Pages Posted: 14 Mar 2013 Last revised: 18 Mar 2013

See all articles by Hector O. Rocha

Hector O. Rocha

IAE Business School - Universidad Austral

Gerald A. McDermott

University of South Carolina - Moore School

Date Written: 2010

Abstract

We develop a theoretical model to investigate how backward societies can improve their upgrading capabilities by transforming existing industrial agglomerations into dynamic clusters. Our main assumptions are two: first, emerging market economies are not uniform but characterized by variety of subnational regional and sectoral organizational and institutional configurations; second, the basic building block and unit of explanation in social sciences is personal action guided by some intention, which is heterogeneous across different actors. Based on these assumptions and the literature on human motives and social networks, we develop a purposeful approach to clusters and upgrading. We argue that governments can develop institutions with private actors that facilitate new types of relationships and improve the access local firms have to a variety of knowledge resources, a key ingredient to upgrading. We illustrate this argument revisiting the literature on clusters and upgrading in Latin America and using two case studies in Argentina, a country better known for its volatility and lack of optimal social capital and institutions. We conclude with avenues for further research.

Keywords: clusters, upgrading, institutions, emerging economies, human motives

Suggested Citation

Rocha, Hector O. and McDermott, Gerald A., Clusters and Upgrading: A Purposeful Approach (2010). Organizations and Markets in Emerging Economies, 2010, Available at SSRN: https://ssrn.com/abstract=2233102

Hector O. Rocha

IAE Business School - Universidad Austral ( email )

Buenos Aires
Argentina

HOME PAGE: http://www.iae.edu.ar/web2005_eng/home/home.html

Gerald A. McDermott (Contact Author)

University of South Carolina - Moore School ( email )

1404 Greene St
Columbia, SC 29208
United States
803-777-1035 (Phone)

HOME PAGE: http://www.geraldamcdermott.com

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