Business clusters

Essay by yopitfulUniversity, Bachelor's May 2014

download word file, 2 pages 0.0

Do firms prefer to enter or stay out of clusters? The positive and negative effects of agglomeration on international business development. A review.

(aqui na intro vou ter de introduzir spillovers) ( It has been claimed that knowledge spillovers are important, especially for knowledge intensive sectors since they involve a great degree of tacit knowledge (Audretsch and Feldman, 1996).

Life is changing, world is moving and technology keeps it track at high speed holding hands with innovation. Over the last decades places far distant became intangibly bridged and closer than ever before. "More open markets and faster communication and transportation should diminish the role of location in competition" (porter�, . Therefore companies could allocate their headquarter wherever they want without bothering that much about being closer to suppliers and costumers. This issue become even more evident considering companies that work online where there is no physical place to find costumers, providers or even complementary services.

Theoretically, for most industries, location would not grant a competitive advantage. The fact is that all over the world we find clusters "critical masses - in one place - of unusual competitive success". - Porter

Cluster, meaning

Business agglomeration is a concept that many have studied and tried to define. Generally it is described as "geographic concentrations of firms, suppliers, support services, specialized infrastructure, producers of related products, and specialized institutions

(e.g., training programs and business associations) that arise in particular fields in particular locations. " (porter �) Companies within a cluster normally share "buyer-supplier relationships, or common technologies, common buyers or distribution channels, or common labor pools (Enright 1996, p. 191)�."

Clustering, information leakage

Following the line of reason of Enright, clusters are nothing more than louds of sharing inter-connections enabled by the short distance between those sharing actors. While, among social...