Moderating influence of internal resources on cluster externalities

Abstract

Purpose

The purpose of this paper is to assess the benefits to firms arising from their geographical concentration; paying particular attention to the impact of specialized employees, information and knowledge spillovers and a collective reputation.

Design/methodology/approach

The authors have taken into account two main approaches: a cluster one, where location may increase firms’ competitiveness; and the resource-based view, where internal resources are the key for firms’ success. Empirical evidence has been gathered from the Ham cluster in Spain combining secondary and primary data. The authors undertook a Tobit regression model since the dependent variable is limited.

Findings

The authors observe that firms with human resources tend to benefit more from cluster externalities. On contrary, R&D and advertising investments induce firms to isolate themselves from crowded areas and prevent any local leakage.

Research limitations/implications

It would be interesting to better understand the role that human resources play; undertake a longitudinal analysis; and take into account the resources of other proximate firms.

Practical implications

Local advantages depends the maturity of the industry by reducing the attractiveness of cluster locations through greater competition in the input and final markets; while internal resources may improve a firm's ability to absorb these externalities, they may also create leakage that benefits neighbouring firms.

Originality/value

It combines two approaches evaluating the moderating influence of internal resources on local externalities. It also offers new empirical evidence from a low-tech industry.

Citation

Diez-Vial, I. and Fernández-Olmos, M. (2014), "Moderating influence of internal resources on cluster externalities", EuroMed Journal of Business, Vol. 9 No. 1, pp. 75-92. https://doi.org/10.1108/EMJB-04-2013-0014