From mass to motion: Conceptualizing and measuring the dynamics of industry clusters

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Abstract

Research Summary: An extensive body of research examines concentration levels (i.e., “mass”) of industry clusters; however, little attention is paid to their dynamics (i.e., “motion”). Understanding cluster dynamics is important because how clusters change over time may have implications for firm strategies and outcomes that are not attributable to cluster mass alone. To advance scholarship, we derive a theoretically grounded measure of cluster motion. Applying this measure to data on establishments in the U.S. computer and semiconductor industries, we document the dynamic nature of clusters both within and across regions. We demonstrate that our measure of cluster motion is distinct from cluster mass. Furthermore, we document that regions rarely follow stylized descriptions of cluster life cycles, which underscores the importance of measuring and investigating cluster dynamics. Managerial Summary: Industry clusters have been considered important for firm strategy due to their influence over organizational processes and outcomes. Therefore, many firms attend closely to how clusters change over time. However, strategy researchers have devoted relatively little attention to cluster dynamics and their implications for firms. In this study, we develop a framework for understanding cluster dynamics, including an empirical technique. We suggest that improved understanding of cluster dynamics may be useful for helping firms make better location decisions and react more appropriately to changes in clusters within which they have an established presence.

Original languageEnglish (US)
Pages (from-to)822-846
Number of pages25
JournalStrategic Management Journal
Volume43
Issue number4
DOIs
StatePublished - Apr 2022

Bibliographical note

Funding Information:
We would like to thank Editor Alfonso Gambardella, two anonymous referees, and seminar participants at the University of Minnesota, the Consortium on Competitiveness and Cooperation, the Strategic Management Society conference, the Strategy Science conference, and the Academy of Management Meeting for their helpful comments. We also acknowledge support from the Strategic Research Foundation's Dissertation Research Grant, the Academy of International Business' Best Dissertation Proposal Scholarship, and the Carlson School of Management's Dissertation Fellowship.

Publisher Copyright:
© 2021 John Wiley & Sons Ltd.

Keywords

  • agglomeration
  • dynamics
  • industry clusters
  • life cycle
  • measurement

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