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  • October 2015
  • Article
  • Review of Economics and Statistics

Agglomerative Forces and Cluster Shapes

By: William R. Kerr and Scott Duke Kominers
  • Format:Print
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Abstract

We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across patent technology clusters.

Keywords

Agglomeration; Clusters; Industrial Organization; Silicon Valley; Technology Flows; Patents; Networks; Information Technology; Industry Clusters; Entrepreneurship; California

Citation

Kerr, William R., and Scott Duke Kominers. "Agglomerative Forces and Cluster Shapes." Review of Economics and Statistics 97, no. 4 (October 2015): 877–899.
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About The Authors

William R. Kerr

Entrepreneurial Management
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Scott Duke Kominers

Entrepreneurial Management
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More from the Authors
  • Migration Fear and Minority Crowd-Funding Success: Evidence from Kickstarter By: John (Jianqui) Bai, William R. Kerr, Chi Wan and Alptug Yorulmaz
  • Clay Ridge Capital By: Martin A. Sinozich and William R. Kerr
  • Progressive Decentralization: A High-level Framework By: Jad Esber and Scott Duke Kominers
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