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Journal of Economic Geography Advance Access originally published online on April 21, 2006
Journal of Economic Geography 2006 6(5):679-699; doi:10.1093/jeg/lbl007
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© The Author (2006). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

The role of clusters as sources of dynamic externalities in the US semiconductor industry

Niels W. Ketelhöhn*

* INCAE Business School, Km. 15.5 c. Sur, Managua, Nicaragua. email <Niels.Ketelhohn{at}incae.edu>

This article investigates the effect of proximity to buyers and suppliers on the local output of cited patents in the US semiconductor industry. Consistent with Michael Porter's cluster theory (1990 and 1998), I find that co-location with important buyers is associated with higher levels of industry innovation. The evidence also suggests important effects of local diversity and specialization in the industry. The article also examines the evolution of the geographic concentration of the US semiconductor industry from the early 1960s to 1997, and reviews the most important sources of knowledge spillovers for the industry.

Keywords: clusters, knowledge spillovers, dynamic externalities, geographic concentration,
JEL classifications: L1, O3, R1, R3
Date submitted: 24 January 2005     Date accepted: 13 March 2006


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