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Part I
Cluster network advantage and organizational relationships
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1
Agglomerations, clusters and industrial districts
Evolution and opportunities for future research
Miguel GonzĂĄlez-Loureiro, Francisco Puig and Berrbizne Urzelai
1. Introduction
After decades of theoretical and empirical inquiry around the interactive effect of location externalities on firmâs international competitiveness, the time has come to map its intellectual structure in terms of its content. Our study aims to provide a wide systematic literature review of a still controversial concept in terms of its boundaries and metrics namely clustering, which broadly speaking refers to firms and institutions that pertain to the same, related and unrelated industries in a certain territory for co-ompeting â that is competing while cooperating. Relatedness holds for shaping the definition of both clusters and industrial districts (IDs; Asheim, Smith, & Oughton, 2011; Porter & Ketels, 2009), although there are some differences between both concepts. On the other hand, the higher concentration of firms belonging to not necessarily related industries is labelled as agglomerations (McCann & Folta, 2008).
Even in a much-globalized world, location matters (Porter & Ketels, 2009; Ketels, 2011; Meyer, Mudambi, & Narula, 2011). Its impact on firmsâ competitiveness and performance is increasingly relevant in the current competition. The firmâs activity is increasingly immersed in a complex and diverse conglomerate of relationships. Firms try to maintain and nurture these networks in order to increase their capability to effectively adapt themselves to the incessant changes occurring in their competitive environment. From the studies of Marshall (1920) and Piore and Sabel (1984), we know that the territorial-based models of networking are considered some of the most fruitful structures for the local organization of the economic activity that helps increase increasing the firmsâ competitiveness.
In this context, scholars have tried to find a rational model to explain the diversity of patterns found when analyzing the firmâs decision regarding the location of its activities, as well as the impact of those patterns on the firmâs overall strategy and performance (Puig, Marques, & Ghauri, 2009). From the field of business management and strategy, industrial organization proponents have dealt with this issue essentially by arguing that the firm strategy is shaped to their largest extent by the competitive environment. Works such as those from Michael Porter showed that the international competitive advantages of some industries are rooted in the national context (Porter, 1998). The eclectic Dunningâs (1988) paradigm brings locational advantages of international production to the fore. Specifically, the location advantages (existence of raw materials, lower costs, etc.) explain the nature and destination of foreign direct investment (FDI; Goerzen, Asmussen, & Nielsen, 2013).
A sense of place involves the understanding not only of the global macro context but also the particular location (Buckley, 2016). As Shen and Puig (201 8) evidence the more complex the multinational enterprise (MNE) is spatially and organisationally, the bigger is the need to understand its multiple locations, context and degrees of embeddedness. All of this gave rise to the study of particular spatial patterns of co-locations of firms, namely agglomerations, clusters and IDs. Thus, it is not only a question of the spontaneous emergence of any of these relational patterns. If such were the issue, then every firm in that location would benefit from that advantage, which is not the case (Molina-Morales & MartĂnez-FernĂĄndez, 2003). According to these latter authors, what really matters is the feeling of membership and an active involvement in the clusterâs activities. The firm must exchange actively a diversity of resources and capabilities with the other firms for the location to have a determinant impact on the co-located firmsâ competitiveness. Thus, geographical proximity is necessary but not sufficient enough for generating interactions, and interactions do not necessarily lead to positive spillovers.
1.1 Clustering and local networking
Recent literature reviews have tried to synthesize the extant research to date on the intersection of firms, location and performance by means of elaborated bibliometric techniques (Cruz & Teixeira, 2010; MartĂnez-FernĂĄndez, CapĂł-Vicedo, & Vallet-Bellmunt, 2012; Lazzeretti, Sedita, & Caloffi, 2014; Hervas-Oliver, Gonzalez, Caja, & Sempere-Ripoll, 2015). However, neither of them distinguishes the diversity of firms within those realities (e.g. domestic vs. multinationals) nor they include all the types of clustering. Although they are very informative, they conducted the review with a focus on a particular breadth or timeframe that may have hindered the possibility to reach upper-level findings or even neglecting the possibility of finding a permeability across disciplines in their results.
Cruz and Teixeira (2010) provided an in-depth review from a regional science viewpoint and a taxonomy of current topics and the foundational studies. MartĂnez-FernĂĄndez et al. (2012) conducted their review for a certain period (1997â2006) on a limited sample of articles but from a broader perspective, including fields such as economics, management, planning and development, urban studies and geography. Thanks to its broader scope, they found the necessity to let this topic be more permeable to other ways of collaboration between firms, namely complex networks of vertical or horizontal relationships.
Lazzeretti et al. (2014) were more concerned on identifying core contributors as a mean for classifying research topics retrospectively from three big fields, namely industrial organization strategists (Porter, 1998), economists (Becattini, 1979; Krugman, 1991) and some sociologist (Sabel, 1989). Hervas-Oliver et al. (2015) focused their goal at scrutinizing the forefront research and find emerging topics. Their bibliographic coupling analysis found that there are distinct yet interconnected discourses, while we are witnessing the blurring of the boundaries of this issue. Yet they concluded that scholars are conducting their research in an isolated manner since they found each conversation maintained its own intellectual foundations that crossed to another conversation just occasionally.
1.2 Reviews about clustering and international firms
On the other hand, recently, authors have reviewed the research done on location choice and emphasized its importance on current international business, economics and economic geography literature, such as Kim and Aguilera (2016) or Nielsen, Asmussen, and Weatherall (2017). In these works, the local (home country) and international (host country) perspectives are combined. Kim and Aguileraâs (2016) work is limited to 137 articles on 19 leading management and international business (IB) journals from 1998 to 2014. They categorize the articles according to seven common topics and keywords.
Nielsen et al. (2017) reviewed and evaluated 153 quantitative studies on FDI location choice from 1976 to 2015 across multiple disciplines including IB, management, economics, urban and regional studies and economic geography. Their work provides a guide for future research but is limited to examining the foreign location choices from a quantitative approach through keyword and snowball searching techniques.
1.3 Opportunities for future research
To summarize, in line with De Marchi, Di Maria and Gereffi (2017), we think that research needs to integrate new theoretical perspectives and include a wider diversity of firms in the study of this phenomenon if we are to advance further in the understanding of clustering between organizations. This can be achieved by classifying firms based on what they do and where they do that. To address this, our study faces some of the limitations of past reviews as recognized by their authors while complementing their findings. Our unit of analysis is the articlesâ content and not âwho said whatâ.
Some recent reviews focused their attention on identifying the current conversations by means of retaining the cited authorsâ main contribution. This may have entailed the loss of information relative to the nuances embracing that kernel, which help understand the full meaning of research; that is we need a picture of the research conducted in their context. We include both the geographical and the industrial context where scholars have conducted their research. Shafique (2013, p. 63) contends that âintellectual structureâ is âa set of salient attributes of the knowledge base that can provide an organized and holistic understanding of the chosen scientific domainâ. Therefore, the intellectual structure should inform about the hows and the whats: the topics addressed, how they interrelate, the methods used and the context where the research was conducted. As Buckley (2016, p. 896) states, âwe should also remember that history interacts with geography â context is crucialâ.
A broader breadth and the espoused context of research enable scholars to find their own path for future research by merging the findings of the recent reviews. Our findings deliver some hints for practitioners to manage their firms and public policymakers to make their decisions for shaping the location advantages. In both cases, we pay particular attention to the international business arena since it is an issue of increasing concern for both scholars and practitioners. The first contribution of this review is the map of the intellectual structure of this field of research. The second contribution of this review is the proposed research agenda for further inquiry into how and to what extent clustering between organizations matters in todayâs globalized world. The remainder of the chapter is organized accordingly.
2. Methodology
In reviewing 25 years of literature reviews in Business Management, Duriau, Reger and Pfarrer (2007) found that content analysis has helped leverage the richness of content while maintaining the accuracy of results thanks to a combination of inductive and deductive approaches. The quantitative approach of our methodology enables reproducibility and yields results that are less dependent of the researcher who conducts the review. The qual...
