Skip to main content
SpringerLink
Log in

Entrepreneurship: The Role of Clusters Theoretical Perspectives and Empirical Evidence from Germany

  • Published:
Small Business Economics Aims and scope Submit manuscript

Abstract

This paper is about the impact of clusters on entrepreneurship at the regional level. Defining entrepreneurship as the creation of new organisations and clusters as a geographically proximate group of interconnected firms and associated institutions in related industries, this paper aims to answer three research questions : first, do clusters matter to entrepreneurship at the regional level? Second, if clusters are associated with different levels of entrepreneurship, what explains those differences? Third, what do the answers to the previous questions imply for academics and policy makers? To answer these questions, this paper distinguishes between clusters and industrial agglomerations and advances a theoretical model and empirical research to explain the impact of clusters on entrepreneurship at the regional level. This paper uses the 97 German planning regions as units of analysis to test the hypotheses. Using hypotheses testing and OLS fixed-effects model, this paper finds that clusters do have an impact on entrepreneurship at the regional level, but industrial agglomerations do not. Implications for academics and policy makers and suggestions for future research are given in the concluding section.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • C. Armington ZoltanJ. Acs (2002) ArticleTitleThe Determinants of Regional Variation in New Firm Formation Regional Studies 36 33–45

    Google Scholar 

  • P. Aydalot (Eds) (1986) Milieux Innovateurs en Europe GREMI Paris

    Google Scholar 

  • R. Baptista P. Swann (1998) ArticleTitleDo Firms in Clusters Innovate More? Research Policy 27 525–540

    Google Scholar 

  • J.A.C. Baum T.L. Amburgey (2002) Organizational Ecology J.A.C. Baum (Eds) Companion to Organizations Blackwell Publishers Oxford, UK 304–326

    Google Scholar 

  • Becattini, G., 1979, ‘Dal “settore industriale” al “distretto industriale”. Alcune considerazioni sull’ unita d’indagine del’economia industriale’, cited in G. Becattini (ed.), Sectors and/or districts: Some Remarks on the Conceptual Foundations of Industrial Economics, Rivista di Economia e Politica Industriale, pp. 123–135.

  • G. Becker (1976) The Economic Approach to Behaviour University of Chigago Press Chicago

    Google Scholar 

  • J. Boswell (1973) The Rise and Fall of Small Firms Allen and Irwin London

    Google Scholar 

  • L.W. Busenitz et al. (2003) ArticleTitleEntrepreneurship Research in Emergence: Past Trends and Future Directions Journal of Management 29 IssueID(3) 285–308

    Google Scholar 

  • P. C. Cheshire E. J. Malecki (2004) ArticleTitleGrowth, Development, and Innovation: A Look Backward and Forward Regional Science 83 249–267

    Google Scholar 

  • J. Cohen P. Cohen S.G. West L.S. Aiken (2003) Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences. EditionNumber3 Lawrence Erlbaum Associated, Publishers NJ

    Google Scholar 

  • J. S. Coleman (1990) Foundations of Social Theory Harvard University Press Cambridge, MA

    Google Scholar 

  • M. T. Costa-Campi E. Viladecans-Marsal (1999) ArticleTitleThe District Effect and the Competitiveness of Manufacturing Companies in Local Productive Systems Urban Studies 36 2085–2098

    Google Scholar 

  • P. Davidsson J. Wiklund (2001) ArticleTitleLevels of Analysis in Entrepreneurship Research: Current Research Practice and Suggestions for the Future Entrepreneurship: Theory & Practice 25 IssueID(4) 81–99

    Google Scholar 

  • InstitutionalAuthorNameDTI–Department of Trade and Industry UK (2001) Business Clusters in the UK - A First Assessment Department of Trade and Industry - UK. London

    Google Scholar 

  • M. Enright (2000) ArticleTitleRegional Clusters and Multinational Enterprises International Studies of Management and Organization 30 IssueID(2) 114–139

    Google Scholar 

  • A. Etzioni (1988) The Moral Dimension: Toward a New Economics The Free Press New York

    Google Scholar 

  • E. J. Feser E. M. Bergman (2000) ArticleTitleNational Industry Cluster Templates: A Framework for Applied Regional Cluster Analysis Regional Studies 34 IssueID(1) 1–19

    Google Scholar 

  • G. Garofoli (1994) ArticleTitleNew Firm Formation and Regional Development: The Italian Case Regional Studies 28 381–394

    Google Scholar 

  • W. B. Gartner (1989) ArticleTitleSome Suggestions for Research on Entrepreneurial Traits and Characteristics Entrepreneurship: Theory & Practice 14 27–37

    Google Scholar 

  • E. L. Glaeser H.D. Kallal J.A. Scheinkman A. Shleifer (1992) ArticleTitleGrowth in Cities Journal of Political Economy 100 1126–1152

    Google Scholar 

  • A. Glasmeier (1994) Flexible Districts, Flexible Regions? The Institutional and Cultural Limits to Districts in an Era of Globalisation and Technological Paradigm Shifts A. Amin N. Thrift (Eds) Globalisation, Institutions, and Regional Development in Europe Oxford University Press Oxford

    Google Scholar 

  • U. Glassman H. Voelzkow (2001) The Governance of Local Economies in Germany C. Crouch P. Le Gales C. Trigilia H. Voelzkow (Eds) Local Production Systems in Europe. Rise or Demise? Oxford University Press Oxford 79–116

    Google Scholar 

  • G. Grabher (1993) The Embedded Firm Routledge London

    Google Scholar 

  • M. Granovetter (1985) ArticleTitleEconomic-Action and Social-Structure–the Problem of Embeddedness American Journal of Sociology 91 481–510

    Google Scholar 

  • M. T. Hannan J. Freeman (1977) ArticleTitleThe Population Ecology of Organizations American Journal of Sociology 82 929–964

    Google Scholar 

  • InstitutionalAuthorNameILO–International Labour Organization (1998) Global Production and Local Jobs: New Perspectives on Enterprise Networks, Employment and Local Development Policy ILO Geneva

    Google Scholar 

  • W. Isard (1956) Location and Space-Economy. Wiley New York

    Google Scholar 

  • W. Isard et al. (1998) Methods of Interregional and Regional Analysis Ashgate Publishing Limited Aldershot

    Google Scholar 

  • A. B. Jaffe (1989) ArticleTitleReal Effects of Academic Research American Economic Review 79 957–970

    Google Scholar 

  • B. Johannisson M. Ramirez-Pasillas G. Karlsson (2002) ArticleTitleThe Institutional Embeddedness of Local Inter-firm Networks: A Leverage for Business Creation Entrepreneurship and Regional Development 14 297–315

    Google Scholar 

  • P. Krugman (1991) Trade and Geography MIT Press Cambridge, MA

    Google Scholar 

  • A. Lomi (1995) ArticleTitleThe Population Ecology of Organizational Founding–Location Dependence and Unobserved Heterogeneity Administrative Science Quarterly 40 111–144

    Google Scholar 

  • E.J. Malecki (1997) Technology and Economic Development: The Dynamics of Local, Regional, and National Competitiveness EditionNumber2 Addison Wesley Longman Ltd London

    Google Scholar 

  • A. Marshall (1966) Principles of Economics EditionNumber8 Mcmillan London

    Google Scholar 

  • A. Morri (1998) Geography and Development UCL Press London

    Google Scholar 

  • R. Nelson S. Winter (1982) An Evolutionary Theory of Economic Change Harvard University Press Cambridge, MA

    Google Scholar 

  • N. Nohria R.G. Eccles (1992) Networks and Organizations Harvard University Press Cambridge, MA

    Google Scholar 

  • InstitutionalAuthorNameOECD (1998) Fostering Entrepreneurship OECD Paris

    Google Scholar 

  • InstitutionalAuthorNameOECD (2001) World Congress on Local Clusters–Proceedings OECD - DATAR Paris, France

    Google Scholar 

  • K. Polanyi (1957) The Great Transformation: The Political and Economic Origins of Our Time Beacon Press Boston

    Google Scholar 

  • M. E. Porter (1990) The Competitive Advantage of Nations Macmillan London

    Google Scholar 

  • M.E. Porter (1998) On Competition. Harvard Business School Press Boston, MA

    Google Scholar 

  • R. Pouder St.John (1996) ArticleTitleHot Spots and Blind Spots: Geographical Clusters of Firms and Innovation Academy of Management Review 21 1192–1225

    Google Scholar 

  • P. Reynolds D. Storey P. Westhead (1994) ArticleTitleCross-National Comparisons of the Variation in New Firm Formation Rates–an Editorial Overview Regional Studies 28 343–346

    Google Scholar 

  • Reynolds, P. D. and S.B. White, 1997, ‘The Entrepreneurial Process. Economic Growth, Men, Women, and Minorities’. Quorum Books.

  • Reynolds, P. et al., 2005, ‘Global Entrepreneurship Monitor: Data Collection Design and Implementation 1998–2003’, Small Business Economics, 17, this issue.

  • Rocha, H. O., 2002, Entrepreneurship and Development Through Clusters: A Theoretical Model. Paper presented at the British Academy of Management Conference, London.

  • H. O. Rocha (2004) ArticleTitleEntrepreneurship and Development: The Role of Clusters. A Literature Review Small Business Economics 23 IssueID(5) 363–400

    Google Scholar 

  • Rocha, H.O., 2005, ‘The Entrepreneurship and Cluster Foundations of Development: Theoretical Perspectives and Latin American Empirical Studies’, in A. Cooper et al., (eds.), Entrepreneurship and Innovation in Emerging Economies, Strategic Management Society Book Series.

  • Rocha, H. O. and S. Ghoshal, 2004,Beyond Self-interest. The Micro-foundations of Cooperation.Presented at the All Academy Symposium ‘Making Organizational Knowledge Actionable: New Organizational Designs for Knowledge Driven Innovation’. Academy of Management Conference, New Orleans, August 6–11, 2004.

  • Rocha, H. O., P. D. Reynolds, V. Donato and C. Haedo, 2004, Local Production Systems, Entrepreneurship and Regional Development: Theoretical Arguments and Empirical Evidence from Argentina. Presented at the Babson–Kauffman Entrepreneurship Research Conference, Glasgow.

  • Rodriguez-Pose, A. and G. Arbix, 2001, ‘Strategies of Waste: Bidding Wars in the Brazilian Automobile Sector’, International Journal of Urban and Regional Research 25, 134ff.

  • T.J.A. Roelandt P. Hertog (1999) Cluster Analysis and Cluster-based Policy Making: An Introduction to the Theme BibInstitutionalEditorNameOECD (Eds) The Cluster Approach OECD Paris 9–26

    Google Scholar 

  • A. Saxenian (1994) Regional Advantage.Culture and Competition in Silicon Valley and Route 128. Harvard University Press Cambridge, MA

    Google Scholar 

  • H. Schmitz (1999) ArticleTitleGlobal Competition and Local Cooperation: Success and Failure in the Sinos Valley, Brazil World Development 27 1627–1650

    Google Scholar 

  • J. A. Schumpeter (1934) The Theory of Economic Development Harvard University Press Cambridge, MA

    Google Scholar 

  • W. Sengenberger F. Pyke (1992) Industrial Districts and Local Economic Regeneration: Research and Policy Issues F. F. Pyke W. W. Sengenberger (Eds) Industrial Districts and Local Economic Regeneration International Institute for Labour Studies Geneva 3–29

    Google Scholar 

  • S. Shane (2003) A General Theory of Entrepreneurship.The Individual-Opportunity Nexus. Edward Elgar Cheltenham, UK

    Google Scholar 

  • R. Sternberg (2000) ArticleTitleInnovation Networks and Regional Development–Evidence From the European Regional Innovation Survey (Eris): Theoretical Concepts, Methodological Approach, Empirical Basis and Introduction to the Theme Issue European Planning Studies 8 389–407

    Google Scholar 

  • R. Sternberg (2005) Entrepreneurship in German Regions and the Policy Dimension DavidB. Audretsch G. Heike C.W. Wessner (Eds) Local Heroes in the Global Village. Globalization and New Entrepreneurship Policies Springer New York 113–114

    Google Scholar 

  • R. Sternberg H. Bergmann I. Lückgen (2004) Global Entrepreneurship Monitor–Länderbericht Deutschland 2003 University of Cologne Köln

    Google Scholar 

  • Sternberg, R. and S. Wennekers, 2005, ‘Determinants and Effects of New Business Creation; Cross-national and Cross-regional Analyses of GEM Data’, Small Business Economics, 17, this issue.

  • A.L. Stinchcombe (1965) Social structure and Organizations J.G. March (Eds) Handbook of Organization Rand McNally Chicago, IL 142–193

    Google Scholar 

  • D. Storey (1994) Understanding the Small Business Sector Routledge London

    Google Scholar 

  • M. Storper (1997) The Regional World Guilford New York

    Google Scholar 

  • R. Swedberg (2000) Entrepreneurship.The Social Science View Oxford University Press Oxford, UK

    Google Scholar 

  • R.-A. Thietart et al. (2001) Doing Management Research Sage London

    Google Scholar 

  • A. H. Van de Ven (1993) ArticleTitleThe Development of an Infrastructure for Entrepreneurship Journal of Business Venturing 8 211–230

    Google Scholar 

  • J. Wagner R. Sternberg (2004) ArticleTitleStart-up Activities, Individual Characteristics, and the Regional Milieu: Lessons for Entrepreneurship Support Policies from German Micro Data The Annals of Regional Science 38 219–240

    Google Scholar 

  • H. Westlund R. Bolton (2003) ArticleTitleLocal Social Capital and Entrepreneurship Small Business Economics 21 77–113

    Google Scholar 

  • J.M. Wooldridge (2003) Introductory Econometrics: A Modern Approach EditionNumber2 Thompson United States

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. London Business School, Regent’s Park, London, NW1 4SA, U.K.

    Hector O. Rocha

  2. Department of Economic and Social Geography, University of Cologne, Albertus-Magnus-Platz, D-50923, Cologne, Germany

    Rolf Sternberg

Authors
  1. Hector O. Rocha
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rolf Sternberg
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Rolf Sternberg.

Additional information

JEL classification: D62, D63, D23, E24, J23, L16, M13, O10, R11, R12, R30.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Rocha, H.O., Sternberg, R. Entrepreneurship: The Role of Clusters Theoretical Perspectives and Empirical Evidence from Germany. Small Bus Econ 24, 267–292 (2005). https://doi.org/10.1007/s11187-005-1993-9

Download citation

  • Accepted:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11187-005-1993-9

Keywords

Search

Navigation