Cluster and business performance: Historical evidence from the Portuguese cork industry

Abstract

This paper analyses the relative performance of clustered and non-clustered companies during the different phases of the cluster life cycle. It starts by explaining the location of most of the Portuguese cork manufacturing companies in Santa Maria da Feira, a small county in the north of the country, whereas the bulk of cork is produced in the South. The historical roots of the Feira cluster are examined, as well as the identification of its life cycle phases. The performance of clustered and non-clustered companies is compared using labour productivity data over a long time span of several decades. This exercise illustrates the crucial importance of history for the understanding of cluster dynamics, as well as many other (evolutionary) economic phenomena.

Do clustered firms outperform the non-clustered? Evidence of financial performance in traditional industries

“…There can be found results of empirical research questioning the ability of agglomeration economies to stimulate financial performance in the firms and the statements of the positive association between firm clustering and its performance in previous studies (e.g., Benneworth et al, 2003;Branco & Lopes, 2018;Kukalis, 2010;Martin & Sunley, 2003;Stavropoulos & Skuras, 2016). Kukalis (2010) demonstrates no significant differences between clustered and non-clustered firms in the early stages of the industry life cycle.…”

“…Further, he shows that non-clustered laggards outperformed clustered laggards in the late stages of the industry life cycle. Branco and Lopes (2018) examined the firms' economic performance in the cork industry depending on the stage of the cluster life cycle. They found that the cluster had the strongest impact on performance during its development.…”

Prevalence of Copycat in Africa Textile Clusters: The Blame Game Among Stakeholders

“…These specialized skills do promote social networks and relationships that are stable as there is exchange of knowledge through interaction or through practicing over a period of time (Gereffi & Lee, 2016;Newman, Page, Rand, Shimeles, Söderbom, & Tarp, 2016). Evidently, it can be seen that firms within an industry cluster turn to be more innovative and competitive than those outside the cluster (Branco & Lopes, 2018;Lindberg & Säll, 2013;Porter, 2000) because an empirical evidence by Prim et al (2016) proves that a significant source by which firms can generate innovation, competition and sustenance is through agglomeration economies of a cluster. The operational patterns of clusters have the flexibility in adjusting to uncertain business transformations (Purwanto, Kamaruddin, & Mohamad, 2015;He, Rayman-Bacchus, & Wu, 2011) and may explain why cluster entities that are not properly connected fail (Bankova, 2015;McCormick, 1998).…”

“…The life cycle of an industrial cluster generally go through four stages i.e. emergence, growth, maturity, and decline or renewal phases (Branco & Lopes, 2018;Fornahl, Hassink, & Menzel, 2015). Nonetheless, not all clusters are able to exhaust their life span (Branco & Lopes, 2018).…”

“…emergence, growth, maturity, and decline or renewal phases (Branco & Lopes, 2018;Fornahl, Hassink, & Menzel, 2015). Nonetheless, not all clusters are able to exhaust their life span (Branco & Lopes, 2018). A cluster may fail in its ability to withstand a fluctuating local or global environment and this could force the cluster to decline prematurely (Halse, 2017).…”