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Journal of Economic Geography Advance Access originally published online on January 16, 2009
Journal of Economic Geography 2009 9(3):381-404; doi:10.1093/jeg/lbn053
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© The Author (2009). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Why do some places succeed when others decline? A social interaction model of cluster viability

Raphaël Suire* and Jérôme Vicente**

*CREM-CNRS, University of Rennes 1, 7 place Hoche, 35 065 RENNES Cedex – France. email <raphael.suire{at}univ-rennes1.fr>
**University of Toulouse, LEREPS, Manufacture des Tabacs, 31000 TOULOUSE – France. email <jerome.vicente{at}univ-tlse1.fr>

JEL classifications: D83, L86, R12

One of the most convincing explanations papers generally provide concerning clusters in knowledge-based economies refers to the geographically bounded dimension of knowledge spillovers. Here, we shall underline that location decision externalities precede local knowledge spillovers in the explanation of cluster aggregate efficiency, which thus requires us to focus on the sequential process of location and the nature of interdependences in location decision-making. To that end, we mean to associate cluster emergence with the formation of locational norms, and to study the critical parameters of their stability. These parameters relate to the type of decision externalities among more or less cognitively distant firms, which influences the weight and the resulting ambivalent role of knowledge spillovers at the aggregate level of clusters. We suggest two theoretical propositions which we test within a simple and general norm location dynamics modeling framework. We then proceed to discuss the results so obtained by comparing them with an emerging related literature based on the life cycle and viability of clusters.

Keywords: clusters, location under decision externalities, cognitive distance, knowledge spillovers
Date submitted: 16 January 2008     Date accepted: 21 November 2008


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