Table Of ContentEntrepreneurship and Regional Development
Entrepreneurship and
Regional Development
The Role of Clusters
Héctor O. Rocha
IAEBusinessSchool,Argentina
©HéctorO.Rocha2013
Foreword©DavidB.Audretsch2013
Softcover reprint of the hardcover 1st edition 2013
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To Ines, my wife, and Esteban, Efrain, Ignacio, Jose, Tobias,
Miguel, Lourdes, Sofía, and Pilar, our children
For who they are and what they mean to me: an example of
how love and sacrifice join forces to help one understand
what is important
To the memory of Sumantra Ghoshal
For what he will always mean to me: an example of passion
for solving real puzzles and unlocking human potential to
understand and change reality for the better
Contents
ListofTablesandFigures viii
ForewordbyDavidB.Audretsch xi
Preface xiii
Acknowledgements xv
AbouttheAuthor xvii
ListofAbbreviations xviii
1 Introduction 1
2 ReviewingandDiscoveringtheConcepts 42
3 ElaboratingaSocioeconomicTheoryoftheImpactofClusters
onEntrepreneurshipandEntrepreneurshipRegionalOutcomes 155
4 PreparingtheTerrainforEmpiricalTesting 184
5 GettingResults 216
6 MakinganAcademicandPolicyContribution 231
Appendices 272
Notes 297
Bibliography 307
Index 333
vii
Tables and Figures
Tables
1.1 Typesofreductionism 14
1.2 Conceptualdefinitions 21
1.3 Inanutshell 29
2.1 Alternativedefinitionsofdevelopment 44
2.2 Theoreticalapproachestodevelopment 48
2.3 Differentlogicsunderlyingdifferentconceptionsofthe
region 70
2.4 Differentregionalapproachestogrowthanddevelopment
accordingtodifferentconceptionsoftheregion 72
2.5 Entrepreneurship–conceptualization,theoretical
approaches,andmeasurement 77
2.6 Clusters–evolutionoftheconcept 95
2.7 Typologiesofclustersaccordingtodifferentvariables 109
2.8 Measuringclusters:alternativemethods 119
2.9 Matchingconceptualandoperationaldefinitionsofclusters 123
2.10 Clustersanddevelopment–empiricalstudies 128
2.11 Localizationvs.urbanizationandcompetitionvs.monopoly
debates 135
2.12 Socioeconomicandmainstreameconomicperspectives 149
2.13 Classificationoftheoreticalapproachestodevelopment,
entrepreneurship,andclusters 150
2.14 Theoriesandspecificapplications 150
3.1 Factorslinkingtheindustrialagglomeration/clusterlevelto
theregionallevel 160
4.1 SICcodesformulti-industryclusters 193
4.2 Responseratesbyfederalstate 195
4.3 Matchingconceptualwithmetricoperationaldefinitionof
clustersandindustrialagglomerations 203
4.4 Clusters–conceptualandoperationaldefinition 204
4.5 Validityandreliabilitycriteria,andstrategiestomeasureand
identifyclusters 214
5.1a Samplestatistics 217
5.1b Correlations 219
viii
ListofTablesandFigures ix
5.2 Hypothesestestingofentrepreneurshipforindustrial
agglomerations,clusters,andclusterswithexternal
networks 221
5.3 OLS-fixedeffects:theimpactofindustrialagglomerations
andclustersonentrepreneurship 223
5.4 OLSfixedeffects:theimpactofindustrialagglomerations
andclustersonrelationshipbetweenentrepreneurshipand
regionaldevelopment 228
5.5 Summaryofresults 230
6.1 Makingacontribution–aroadmap 233
6.2 Researchgap,theoreticalcontribution,andpractical
relevance 249
6.3 Fourparadigmsunderlyingpotentialpolicyprescriptionson
clustersandentrepreneurship 255
AppendixA:SampleofGermanclustersaccordingtotheliterature 272
AppendixC:Operationaldefinitionsattheplanningregionlevel 280
AppendixE:Planningregionswithatleastthreeclustersandan
averagenumberofcitationsforacluster 285
AppendixG:Statisticaltechniques,assumptions,andhowthey
havebeenmet 291
Figures
1.1 Researchprogrammeandfocus 10
1.2 Germanfederalstates,Germanplanningregions(unitsof
analysis),andclusters(unitsofobservation) 13
1.3 Entrepreneurship,regionaldevelopment,andclusters 20
2.1 Relationshipbetweengeneralandregionalapproachesto
growthanddevelopment 73
2.2 Entrepreneurship–conceptualization 84
2.3 Necessaryandcontingentdimensionsofclusters 111
2.4 Clustersandrelatedphenomena 115
2.5 Clusterdimensions–matchingconceptualandoperational
definitions 125
2.6 Localizationandurbanizationeconomies 134
2.7 Entrepreneurship,regionaldevelopment,andclusters–two
alternativeperspectives 147
3.1 Concepts,model,andhypotheses 157
3.2 Cluster-entrepreneurshipmodel 162
3.3 Cluster-entrepreneurship–regionaldevelopmentmodel 173
3.4 Researchquestions,model,andhypotheses–summary 181
4.1 Clusters–operationaldefinition:sourcesofdata,criteria,
andsteps 191
x ListofTablesandFigures
4.2 Totalentrepreneurialactivity(TEA)inGermanplanning
regions(2000–2003) 197
4.3 Federalstates,planningregions,industrialagglomerations,
andclusters 208
AppendixB:Coveringletter,instructions,andquestionnairesent
toregionalexpertsinone-thirdoftheplanningregions 276
AppendixD:Operationaldefinitionofentrepreneurship 283
Foreword
One of themost compellinginsights of theglobal economic crisis thathas
prevailedforsomefiveyearsisthateconomicprosperityandahighstandard
oflivingcannotbegeneratedandsustainedthroughmacroeconomicpolicy
alone. Rather, the greater variance in economic performance across cities,
communities,andregionswithinanygivencountrysuggeststhatthelocal
conditions,institutions,andorientationmay,infact,bedecisiveinshaping
theeconomicperformanceofaplace.
But which conditions, institutions, and orientation matter, and how can
they be influenced by policy to best enhance economic performance? This
importantbookweavestogethertwodisparatesourcesofliterature–onthe
onehandtheclusterliteratureandontheotherhandtheentrepreneurship
literature–toprovidecompellinginsightsintohowandwhylocaleconomic
activity can best be structured and organized to generate strong economic
performance.
Thoughtleadersandpolicy-makersconcernedwiththeeconomicperfor-
mance of a place have long been familiar with the concept and practice of
creatingandmanagingclustersoffirms.MichaelPorterintroducedandpop-
ularizedtheconceptthatthestructureofeconomicactivityinaplace,such
asaregionorcity,caninfluencetheeconomicperformanceofthatplaceif
firmsareorganizedintoclustersofcomplementaryeconomicactivity.Arich
andconvincingliteraturesubsequentlyconfirmedtheimportanceofclusters
to economic performance. Policy-makers around the globe have made the
creationandgrowthofclusterstheirmainfocustofostereconomicgrowth,
employment,andcompetitivenessinglobalmarkets.
A very different literature has focused on a very different aspect
of the structure and organization of economic activity in a place –
entrepreneurship. This literature has generated compelling empirical evi-
dencethatthosecitiesandregionsexhibitingmoreentrepreneurialactivity
alsogeneratehigherlevelsofeconomicperformance.
Thisbookisimportantbecauseitbringsthesetwostructuralandorgani-
zationaldimensionstogether–clustersandentrepreneurship–andprovides
compellingevidencethattheirimpactsaredeeplyinterdependent.Theeffi-
cacy of clusters in terms of enhancing economic performance is shaped by
theextenttowhichthoseclustersinvolveandarebasedonentrepreneurial
activity.Similarly,theimpactofentrepreneurshiponeconomicperformance
is clearly enhanced when it takes place within the context of clusters of
complementaryeconomicactivity.
xi
