Göran Lindqvist

This paper contributes to the literatures on entrepreneurship and economic geography by investigating the effects of clusters on the survival and performance of new entrepreneurial firms where clusters are defined as regional agglomerations of related industries. We analyze firm-level data for all 4,397 Swedish firms started in the telecom and consumer electronics, financial services, information technology, medical equipment, and pharmaceuticals and pharmaceutical sectors from 1993 to 2002. We find that that firms located in strong clusters create more jobs, higher tax payments, and higher wages to employees. These effects are consistent for absolute agglomeration measures (firm or employee counts), but weaker for relative agglomeration measures (location quotients). The strengths of the effects are found to vary depending on which geographical aggregation level is chosen for the agglomeration measure.

As clusters have developed from an analytical concept into a key policy tool, numerous cluster initiatives, or collaborative organizations designed to enhance the competitiveness of clusters, have been implemented across the globe. However, while research on clusters is abundant, research specifically focusing on these emerging organizations is scant to date. This paper analyzes one such cluster initiative and its cluster, and in particular examines to what degree the public and private sectors (1) have the same understanding of the cluster's competitiveness and underlying strengths and weaknesses and (2) what activities the cluster initiative should conduct.