This paper draws on social network theory to develop a model of regional cluster performance. We suggest that high performing regional clusters are underpinned by (1) network strength and (2) network openness, but that the effects of these on the performance of a cluster as a whole are moderated by environmental uncertainty. Specifically, the positive effects of network openness on cluster performance tend to increase as environmental uncertainty increases, while the positive effects of network strength on cluster performance tend to decrease as environmental uncertainty increases. Our findings have theoretical and practical implications for social network research in general, and cluster research in particular.Keywords: geographical clusters, cluster performance, social networks in clusters, network strength, network openness, environmental uncertainty 2
IntroductionThere is increasing recognition that clusters of co-located firms play a key role in supporting innovation and wealth creation. For example, Schmitz and Nadvi (1999: 1503) concluded that clustering helps firms to 'overcome growth constraints and compete in distant markets ', while Porter (2000) has argued that the economic performance of regions and ultimately nations is contingent upon the innovativeness of their industrial clusters. The upshot, as St John and Pouder (2006: 142) noted, is that "virtually every state in the US has a cluster development strategy as part of its economic development plan". These strategies are not confined to the US or other developed economies, however; they are also evident in many emerging markets (Bell and Albu, 1999; Bell and Giuliani, 2007; Giuliani and Bell, 2005;Parrilli, 2004).Consequently, there has been growing academic and policy interest in the factors that underpin high performing clusters, and a substantial body of scholarship has emerged in geography, economics, and more recently strategic management, which considers the social and economic processes that drive processes of agglomeration. Broadly speaking, three sets of partly overlapping arguments within this literature can be identified.For some scholars, high performing clusters are underpinned by the economic efficiencies they confer on constituent firms, including increased specialization, reduced transaction costs and enhanced reputation. From this perspective, spatial proximity allows firms to take advantage of scale and positive externalities such as an abundance of highly skilled labor, specialized subcontractors and rapid flows of information (Ahoaronson, Baum and Feldman, 2007;Hirschman, 1958;Kaldor, 1972; Krugman, 1991;Marshall, 1920;Rosenthal and Strange, 2003). Moreover, proximity is thought to facilitate the profitable deintegration of value chains by allowing greater specialization of inputs and outputs, leading to 3 improved efficiency and greater speed to market (Feldman, 2000;Herrigel, 1993;Storper, 1997).A second strand of scholarship focuses upon the distinctive dynamics of knowledge transfer among co-located firms as...