Article ID Journal Published Year Pages File Type
989952 World Development 2006 21 Pages PDF
Abstract

SummaryThe local formation, and benefits, of industrial clusters have received considerable research attention during the past decade. We argue that the existing literature has underestimated the role of external economies of collective bargaining and production capacity accruing to firms in clusters that are derived from traded relationships with institutions, firms, and customers outside local clusters. We define these benefits as non-cluster economies of traded interdependencies among firms in clusters. To illustrate our arguments, we examine the formation in Beijing, China, of one of the world’s few mobile telecommunications manufacturing clusters. We show how Nokia, the lead firm in the local industrial cluster, is able to create non-cluster external economies for its key suppliers co-locating in this purpose-specific industrial cluster.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Authors
, , ,