Does embeddedness in clusters enhance firm survival and growth? An establishment-level analysis using CORIS data

Nicole Litzel

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Regional Development and Innovation Regional Economics and Spatial Analysis Firm Innovation and Growth

Abstract

Does embeddedness in clusters enhance firm survival and growth? An establishment-level analysis using CORIS data. Regional Studies. The effects of clusters on firm survival and firm growth are the basis of an extensive literature that has produced mixed evidence. In this paper an analysis is performed by using an evaluation design based on a control group approach. This is possible by exploiting a database that connects an establishment-reported indicator for embeddedness in clusters with highly reliable longitudinal establishment data. Survival analysis (2001–10) shows that openness towards what the regional value-added chains can offer reduces failure risk by roughly one-third. In addition, embeddedness in clusters has raised 10-year growth of establishments by 16.6% on average.

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1990The Competitive Advantage of Nations 1995The Theory of the Growth of the Firm 2000Location, Competition, and Economic Development: Local Clusters in a Global Economy 1994Regional advantage: culture and competition in Silicon Valley and Route 128 1995Regional Advantage: Culture and Competition in Silicon Valley and Route 128.1972The Organisation of Industry 1987The Relationship Between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries 1996Job creation and destruction

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