IDEAS home Printed from https://ideas.repec.org/a/spr/anresc/v49y2012i3p719-731.html
   My bibliography  Save this article

Industry cluster: spatial density and optimal scale

Author

Listed:
  • Zheng Wang
  • Changxin Liu
  • Kejing Mao

Abstract

This paper studies the mechanism of industry cluster and revisits two cases of the Cambridge phenomenon. Based on the theoretical study and numeric simulation, the paper finds that: first, knowledge spillovers destroy normal Hotelling Process and lead to regional industry cluster. The density of cluster is inversely related to the damping of knowledge spillovers. Industry cluster is more likely to appear when the production cost is closer but still below the price of the product. Second, smaller companies are more likely to cluster than larger ones. Third, there is an optimal spatial scale, which is primarily determined by workers’ wage, land rent, and the supply-demand relationship of land. The scale of a cluster cannot develop freely. Finally, labor-intensive firms and high-tech firms with less demand of land are more inclined to cluster, while traditional giant firms are less likely to do so. Copyright Springer-Verlag 2012

Suggested Citation

  • Zheng Wang & Changxin Liu & Kejing Mao, 2012. "Industry cluster: spatial density and optimal scale," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 719-731, December.
    • Handle: RePEc:spr:anresc:v:49:y:2012:i:3:p:719-731
    DOI: 10.1007/s00168-011-0452-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00168-011-0452-6
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s00168-011-0452-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
    2. Borck, Rainald & Pfluger, Michael, 2006. "Agglomeration and tax competition," European Economic Review, Elsevier, vol. 50(3), pages 647-668, April.
    3. Krugman, Paul, 1994. "Complex Landscapes in Economic Geography," American Economic Review, American Economic Association, vol. 84(2), pages 412-416, May.
    4. Krugman, Paul, 1991. "History and Industry Location: The Case of the Manufacturing Belt," American Economic Review, American Economic Association, vol. 81(2), pages 80-83, May.
    5. Bernstein, Jeffrey I & Nadiri, M Ishaq, 1988. "Interindustry R&D Spillovers, Rates of Return, and Production in High-Tech Industries," American Economic Review, American Economic Association, vol. 78(2), pages 429-434, May.
    6. Goodfriend, Marvin & McDermott, John, 1995. "Early Development," American Economic Review, American Economic Association, vol. 85(1), pages 116-133, March.
    7. Barro, Robert J & Sala-i-Martin, Xavier, 1997. "Technological Diffusion, Convergence, and Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 1-26, March.
    8. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    9. Ragnar Tveteras & George E. Battese, 2006. "Agglomeration Externalities, Productivity, And Technical Inefficiency," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 605-625, October.
    10. Zheng Wang & Cuifang Ma & Guilan Weng & Ying Wang, 2004. "A study on temporal and regional process of knowledge spillover," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(4), pages 595-606, December.
    11. Marshall, Alfred, 1920. "Industry and Trade," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number marshall1920.
    12. Jens Suedekum, 2006. "Agglomeration And Regional Costs Of Living," Journal of Regional Science, Wiley Blackwell, vol. 46(3), pages 529-543, August.
    13. Bart Verspagen & Marjolein C.J. Cani, ls, 2001. "Barriers to knowledge spillovers and regional convergence in an evolutionary model," Journal of Evolutionary Economics, Springer, vol. 11(3), pages 307-329.
    14. Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1988. "Interindustry R&D, Rates of Return and Production in High-Tech Industries," Working Papers 88-04, C.V. Starr Center for Applied Economics, New York University.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yanzhe Cui & Yingnan Niu & Yawen Ren & Shiyi Zhang & Lindan Zhao, 2024. "A Model to Analyze Industrial Clusters to Measure Land Use Efficiency in China," Land, MDPI, vol. 13(7), pages 1-22, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Franco Malerba & Maria Mancusi & Fabio Montobbio, 2013. "Innovation, international R&D spillovers and the sectoral heterogeneity of knowledge flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(4), pages 697-722, December.
    2. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2013. "Urban Renewal after the Berlin Wall," Working Papers 049, Chair for Economic Policy, University of Hamburg.
    3. Thomas Doring & Jan Schnellenbach, 2006. "What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 375-395.
    4. Junius, Karsten, 1997. "Economies of scale: A survey of the empirical literature," Kiel Working Papers 813, Kiel Institute for the World Economy (IfW Kiel).
    5. Nuria Quella, 2006. "Intra- and Inter-sectoral Knowledge Spillovers and TFP Growth Rates," 2006 Meeting Papers 431, Society for Economic Dynamics.
    6. Giovannetti, Emanuele & Piga, Claudio A., 2017. "The contrasting effects of active and passive cooperation on innovation and productivity: Evidence from British local innovation networks," International Journal of Production Economics, Elsevier, vol. 187(C), pages 102-112.
    7. Iman Miremadi & Yadollah Saboohi, 2018. "Planning for Investment in Energy Innovation: Developing an Analytical Tool to Explore the Impact of Knowledge Flow," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 7-19.
    8. M. Teresa Costa-Campi & Elisabet Viladecans-Marsal, 1999. "The District Effect and the Competitiveness of Manufacturing Companies in Local Productive Systems," Urban Studies, Urban Studies Journal Limited, vol. 36(12), pages 2085-2098, November.
    9. Diao, Xinshen & Roe, Terry L., 1996. "A Dynamic CGE Model of R&D Based Growth in the U.S. Economy: An Experiment Using the New Growth Theory," 1996: Implications of the New Growth Theory to Agricultural Trade Research and Trade Policy Conference, December 1996, Washington DC 50866, International Agricultural Trade Research Consortium.
    10. Jun Koo, 2006. "In Search of New Knowledge: Its Origins and Destinations," Economic Development Quarterly, , vol. 20(3), pages 259-277, August.
    11. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    12. Anupam Jena & Casey Mulligan & Tomas J. Philipson & Eric Sun, 2008. "The Value of Life in General Equilibrium," NBER Working Papers 14157, National Bureau of Economic Research, Inc.
    13. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170, Elsevier.
    14. O'Hearn, Timothy J., 2000. "The reason for the patent wars," Business Horizons, Elsevier, vol. 43(4), pages 33-42.
    15. Fernando MARTÍN & Roberta CURIAZI, 2020. "Distritos Industriales En Las Provincias De Ecuador Y El Sector Manufacturero Del Cuero De Quisapincha," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 20(2), pages 121-138.
    16. Tombak, Mihkel & Röller, Lars-Hendrik & Siebert, Ralph, 2000. "Strategic Choice of Partners: Research Joint Ventures and Market Power," CEPR Discussion Papers 2617, C.E.P.R. Discussion Papers.
    17. Michalis Nikiforos, 2013. "The (Normal) Rate of Capacity Utilization at the Firm Level," Metroeconomica, Wiley Blackwell, vol. 64(3), pages 513-538, July.
    18. Dennis W. Carlton & Michael Waldman, 2002. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 194-220, Summer.
    19. Dilip Mookherjee & Debraj Ray, 2022. "Growth, Automation and the Long-Run Share of Labor," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 46, pages 1-26, October.
    20. Olubunmi Faleye & Rani Hoitash & Udi Hoitash, 2018. "Industry expertise on corporate boards," Review of Quantitative Finance and Accounting, Springer, vol. 50(2), pages 441-479, February.

    More about this item

    Keywords

    D21; L11; R12;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:49:y:2012:i:3:p:719-731. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.