Clusters and Rivalry: Does Localization Really Matter?

Abstract

This exploratory study addresses the link between rivalry—which we regard as a cognitive social dimension of competition— and localization. We adopt a visual-mapping technique to collect data on firms belonging to the packaging-machinery geographical cluster in Northern Italy. We can summarize our results as follows. Entrepreneurs identifying rivals within the cluster also tend to cite a larger number of rivals altogether. A firm's proximity to its rivals is a key to a deeper comparison with them. Geographical distance represents a tool for scanning the competitive environment; it is not used as a criterion by which to classify rivalry. From these results, we generate a few propositions that shed a new light on the relationship between rivalry and localization.

Keywords: Geographical cluster, Rivalry, Localization, Visual mapping

JEL Classification: M10, M20