Author Abstract
Clusters are defined as geographically concentrated agglomerations of specialized firms in a particular domain. The cluster concept in its broader meaning of industrial agglomeration has been the focus of longstanding debates in the social sciences. This working paper traces the evolution of the literature on industrial concentration, reviewing the major contributions and puzzles at the core of cluster theory with a specific focus on clustering in developing economies. Traditionally, studies on clusters have overemphasized the dynamics arising in specific cluster locations as opposed to the impact of external factors. Indeed, researchers have explained clusters as self-contained entities and reduced their success to local exceptionality. In contrast, emerging literature has shown that clusters are integrated in broader structures beyond their location and are rather building blocks of today’s global economy. The working paper goes on to present two historical cases from the global south to explain how clusters work as major tools for international business. Particularly in the developing world, multinationals have used clusters as platforms for channeling foreign investment, knowledge, and imported inputs. The study concludes by stressing the importance of using historical evidence and data to look at clusters as agglomerations of actors and companies operating not just at the local level but across broader global networks. In doing so the historical perspective provides explanations lacking in the existing cluster scholarship to understand clusters as organizational structures underpinning the process of globalization.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: August 2017
- HBS Working Paper Number: HBS Working Paper #18-018
- Faculty Unit(s): General Management