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Innovation and Economic Activity: An Institutional Analysis of the Role of Clusters in Industrializing Economies

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  • Saeed Parto

Abstract

This paper focuses on the notion of “industrial clusters” as a descriptor to discuss innovation in less-developed or industrializing economies. A critical review of the literature on industrial clusters is used to identify the key determinants of clusters. A frame of analysis is presented to examine the institutional factors that underpin cluster performance. The analysis of two case studies shows that whether or not a cluster becomes an integrated part of an economic system and contributes to economic growth depends on the type of cluster (sectoral location), geography (physical location), the institutional landscape that structures how the actors organize themselves (the mode of governance), the external (macroeconomic) environment, and whether or not the combination of all these factors is conducive to learning.

Suggested Citation

  • Saeed Parto, 2008. "Innovation and Economic Activity: An Institutional Analysis of the Role of Clusters in Industrializing Economies," Journal of Economic Issues, Taylor & Francis Journals, vol. 42(4), pages 1005-1030, December.
    • Handle: RePEc:mes:jeciss:v:42:y:2008:i:4:p:1005-1030
    DOI: 10.1080/00213624.2008.11507200
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    Cited by:

    1. Lewellyn, Krista B. & Bao, Shuji 'Rosey', 2017. "The role of national culture and corruption on managing earnings around the world," Journal of World Business, Elsevier, vol. 52(6), pages 798-808.
    2. Lidia Alexandra Năstase (Păun) & Florenţa Larisa Vasile (Ile), 2019. "The Cooperation In Clusters, A Strategy For The Destination Management Organization," Romanian Economic Business Review, Romanian-American University, vol. 14(1), pages 15-26, March.
    3. Yugank Goyal & Klaus Heine, 2021. "Why do informal markets remain informal: the role of tacit knowledge in an Indian footwear cluster," Journal of Evolutionary Economics, Springer, vol. 31(2), pages 639-659, April.
    4. Jianyi Li & Douglas Webster & Jianming Cai & Larissa Muller, 2019. "Innovation Clusters Revisited: On Dimensions of Agglomeration, Institution, and Built-Environment," Sustainability, MDPI, vol. 11(12), pages 1-15, June.
    5. Ciarli, Tommaso & Parto, Saeed & Savona, Maria, 2010. "Conflict and Entrepreneurial Activity in Afghanistan: Findings from the National Risk Vulnerability Assessment Data," WIDER Working Paper Series 008, World Institute for Development Economic Research (UNU-WIDER).
    6. Boumediene Amraoui & Abdesselam Ouhajjou & Salvatore Monni & Najiba El Amrani El Idrissi & Manuela TvaronaviÄ ienÄ—, 2019. "Performance of clusters in Morocco in the shifting economic and industrial reforms," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 1(3), pages 227-243, September.
    7. Hameeda A. AlMalki & Christopher M. Durugbo, 2023. "Systematic review of institutional innovation literature: towards a multi-level management model," Management Review Quarterly, Springer, vol. 73(2), pages 731-785, June.
    8. Tommaso Ciarli & Saeed Parto & Maria Savona, 2010. "Conflict and Entrepreneurial Activity in Afghanistan: Findings from the National Risk Vulnerability Assessment Data," WIDER Working Paper Series wp-2010-008, World Institute for Development Economic Research (UNU-WIDER).
    9. María Eugenia Morales Rubiano & Sonia Esperanza Sanabria Aguirre, 2010. "Acumulación de Conocimiento, Innovación y Competitividad en Aglomeraciones Empresariales," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, December.
    10. Miroslav Žižka & Petra Rydvalová, 2014. "Influence of Clusters on the Intensity of Innovation Outputs," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(37), pages 994-994, August.
    11. Ke Li & Chihning Chu & Derfang Hung & Chauchyun Chang & Songlin Li, 2010. "Industrial Cluster, Network And Production Value Chain: A New Framework For Industrial Development Based On Specialization And Division Of Labour," Pacific Economic Review, Wiley Blackwell, vol. 15(5), pages 596-619, December.

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