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Potential of Cluster Development and the Role of Cluster Support Policies in Latvia

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  • Vera Boronenko
  • Zane Zeibote

Abstract

The objective of this paper is to examine the role of institutional and policy support for cluster development, and the competitive advantages of regions based on regional labour force concentration. The tool of cluster identification in regional economies - Location Quotient (LQ) - has been applied to measure the concentration of the labour force in the main economic sectors of Latvia and Finland. This comparative analysis has shown that Finland has much stronger regional labour force concentration in certain sectors of the economy, which is not typical for Latvia and reveals that the regional economy of Latvia has much lower potential for cluster development and competitiveness in global markets. The results of this research confirm that governments should support cluster development to achieve sustainable long-term development based on natural growth poles, exploiting the potential of regional comparative advantages such as specific concentration of skills and knowledge (labour force), concentration of industries, natural resources, etc., but not concentrate on short-term priorities in cluster development.

Suggested Citation

  • Vera Boronenko & Zane Zeibote, 2011. "Potential of Cluster Development and the Role of Cluster Support Policies in Latvia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 56(191), pages 35-68, October-D.
    • Handle: RePEc:beo:journl:v:56:y:2011:i:191:p:35-68
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    References listed on IDEAS

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    Cited by:

    1. Sabine Menu, 2012. "The Role of Cluster Policy on Leadership: Evidence from Two Pôles De Compétitivité," Environment and Planning C, , vol. 30(5), pages 816-834, October.
    2. Ádám Török & Gyöngyi Csuka & Bernadett Kovács & Anita Veres, 2013. "The "Resurrection" of Industrial Policy in the European Union and its Impact on Industrial Policy in the New Member Countries. WWWforEurope Working Paper No. 26," WIFO Studies, WIFO, number 46887.
    3. Zeynep Karaca, 2018. "The Cluster Analysis In The Manufacturing Industry With K-Means Method: An Application For Turkey," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 6(3), pages 1-12.
    4. Mihnenoka Aleksandra & Senfelde Maija, 2017. "the impact of national economy structural transformation on regional employment and income: the case of Latvia," South East European Journal of Economics and Business, Sciendo, vol. 12(2), pages 47-60, December.
    5. Khuram Shahzad, 2015. "Performance Evaluation of an Industrial Cluster-based Common Facility Centre (CFC) in Pakistan," Journal of Infrastructure Development, India Development Foundation, vol. 7(1), pages 35-54, June.

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    More about this item

    Keywords

    cluster support policies; regional competitive advantages; cluster development; labour force concentration; location quotient (LQ).;
    All these keywords.

    JEL classification:

    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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