Clusters, Convergence, and Economic Performance

By Mercedes Delgado, Michael E. Porter, Scott Stern. 2014

770 citations recorded by the source corpus.

This paper evaluates the role of regional cluster composition in regional industry performance. On the one hand, diminishing returns to specialization in a location can result in a convergence effect: the growth rate of an industry within a region may be declining in the level of economic activity of that industry. At the same time, positive spillovers across complementary economic activities can provide an impetus for agglomeration: the growth rate of an industry within a region may be increasing in the “strength” (i.e., relative presence) of related industries. Building on Porter (1998, 2003), we develop a systematic empirical framework to analyze the role of regional clusters – groups of closely related industries operating within a particular region – in the growth of regional industries. We exploit data from the US Cluster Mapping Project to examine the effects of agglomeration within regional clusters after controlling for convergence at the region-industry level. Our findings suggest that industries located in a strong cluster register higher employment and patenting growth. Regional industry growth also increases with the strength of related clusters in the region and with the strength of similar clusters in adjacent regions. We also find evidence of the complementarity between employment and innovation performance in regional clusters: both the initial employment and patenting strength of a cluster have a separate positive effect on the employment and patenting growth of the constituent industries. Finally, we find that new regional industries emerge where there is a strong cluster. These findings are consistent with multiple types of externalities arising in clusters, including knowledge, skills, and input–output linkages.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/db197d20c2df51258e945f21eeb18a967e635a7b

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Citations in the corpus

Agents of Structural Change: The Role of Firms and Entrepreneurs in Regional Diversification (2018, result): “This means that, in line with studies showing that firms benefit from nearby related economic activity (Delgado, Porter, and Stern 2010; Neffke, Henning, and Boschma 2012), establishments grow faster and/or survive longer in local industries that are better matched to their regional economies.”
Clusters and entrepreneurship (2010, neutral): “Here we suggest that important agglomeration forces are due to the presence of clusters -supporting and related industries --instead of industry diversity per se (Porter, 1990, 1998a; Feldman and Audretsch, 1999; Delgado, Porter and Stern, 2007).”
Knowledge-Based Regional Economic Development: A Synthetic Review of Knowledge Spillovers, Entrepreneurship, and Entrepreneurial Ecosystems (2018, background): “Similarly, Delgado, Porter, and Stern (2014) reported the contribution of clusters (defined as a group of interconnected industries in a region) to knowledge spillovers.”
Relatedness, complexity and local growth (2020, background): “Clusters of related activities promote innovation (Delgado et al., 2014) by bringing together complementary ideas (Jacobs, 1969; Feldman and Audretsch, 1999).”
Structure and evolution of global cluster networks: evidence from the aerospace industry (2016, methodology): “To identify the aerospace clusters, we draw on a large body of prior work by using a location quotient (LQ) approach (Delgado et al., 2014).”
Economic complexity and the green economy (2020, background): “Pearl River Delta, Silicon Valley); government policy and research might want to focus directly on the competitiveness of regional production clusters (Delgado et al., 2014).”
Defining Clusters of Related Industries (2014, background): “Defining measures of the relatedness among clusters is important since economies of agglomeration arise across related clusters as well as within individual clusters (Delgado, Porter, and Stern, 2014).”