Why do Firms Locate Across Multiple Clusters? Cluster Density, Capabilities and Ethnic Ties

Abstract

It is well-accepted that firms locate in clusters to benefit from spillover effects from similar firms in the location. However, some firms choose to locate in multiple clusters. In this paper, we focus on the phenomenon of multi-cluster presence. Through an empirical investigation of 95 firms from the information technology enabled service industry within India, we analyze the drivers of membership across multiple clusters. Our findings indicate first that firms that are located in lower density clusters show a tendency to locate in a larger number of clusters. Second, firms that are looking for people-based creative capabilities also tend to locate in a larger number of clusters. Finally, the firms that are not founded at the location of ethnic origin of the founder CEO also tend to locate in a larger number of clusters.

Technological Innovation Research in China and India: A Bibliometric Analysis for the Period 1991–2015

“…Clusters provide firms with opportunities to benefit from spillovers. Taking this argument further, it is seen in Indian studies that firm decisions to locate in single or multiple clusters are related to cluster density, requirement for creative talent, and firms’ founding in places other than origin of CEO (Dhandapani, Upadhyayula, & Karna, 2015). Madanmohan, Kumar, and Kumar's (2004) comparative study between India and Indonesia indicate that firms’ ability to enhance their technological capabilities through technology imports is influenced by their R&D investments, availability of suitable technical talent, channels for technology transfer, government support, and supporting organizational culture.…”

Identifying configurations of multiple co‐located clusters by analyzing within‐ and between‐cluster linkages

“…While it is clear that not each industry park can automatically be considered a cluster, the question is whether such entities develop extended networks of internal relationships, as well as external linkages to other regions and clusters (e.g., Bathelt et al, ), and what the nature of relationships within and between them is. Another interesting question is whether firms choose to locate across these co‐located clusters to take advantage of knowledge spillovers from similar firms and acquire specific capabilities at different locations (Delgado et al, ; Dhandapani, Upadhyayula, & Karna, ; Lecocq, Leten, Kusters, & Van Looy, ; McCann & Folta, ; McCann & Arita, ; Pe'er, Vertinsky, & King, ; Storper, ), or would firms minimize linkage patterns in the same city‐region to prevent unintended intracity, cross‐park knowledge spillovers, and concentrate instead on supra‐local and global connections?…”

Primer on the Cluster Impact on Internationalisation in the Form of FDI in the Time of Industry 4.0

“…While the former from the perspective of cluster inhabitants and a cluster organisation might be labelled as active, outward-oriented internationalisation, the latter can be described as passive, inward-oriented internationalisation (Jankowska and Götz, 2018). The impact of clusters on internationalisation seems to happen via multiple channels (DiMaggio and Powell, 1991;Steiner, 1998;Smith, 2008;Sölvell, 2008;Fornahl and Menzel, 2010;Andersson, 2013;Dohse et al ., 2018). Clusters can serve as versatile tools which facilitata both the foreign expansion of domestic firms and the hosting of foreign investors Howells and Hedemann, 2009;Pla-Barber and Alegre, 2007;Zen et al ., 2011;Richardson et al ., 2012;Dhandapani, et al ., 2015;Colovic, Lamotte, 2014).…”