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Journal of Economic Geography Advance Access published online on April 21, 2006

Journal of Economic Geography, 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
Received January 24, 2005
Accepted March 13, 2006

Article

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

Niels W. Ketelhöhn 1 *

1 INCAE Business School, Km. 15.5 c. Sur, Managua, Nicaragua

* To whom correspondence should be addressed.
Niels W. Ketelhöhn, E-mail: Niels.Ketelhöhn{at}incae.edu


   Abstract

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.
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