The dynamics of cluster entrepreneurship: Knowledge legacy from parents or agglomeration effects? The case of the Castellon ceramic tile district

What are the main mechanisms driving the process of industry clustering? There is a tension between two different perspectives as regards explaining entrepreneurship and spatial concentration: the roles played by agglomeration economies and knowledge legacies passed on from parents to spawns or spinoffs. Using qualitative interviews and archival data analysis, this paper tracks the evolution and the organizational reproduction of the ceramic tile cluster of Castellon (Spain) since its inception in 1727. Results show the existence of agglomeration and socially-based co-operation forces. Beyond de novo spinoffs, abundant social capital in highly agglomerated regions facilitates co-operation and new firm formation, and even co-operation amongst competitors to create new firms. Socially-based networks, reinforced by agglomeration externalities, all act as learning mechanisms to build pre-entry capabilities in new ventures, complementing Klepper's inheritance perspective. Spatial concentration of an industry can be attributed to the benefits of agglomeration and socially-based co-operation, in combination with the influence of knowledge legacies in a complementary and synergistic process. Conclusions are framed within the knowledge spillover theory of entrepreneurship, shedding light on how entrepreneurship occurs in clusters.