Assoc. Prof. Rui Baptista
Technical University of Lisbon, Portugal

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Abstract - Keynote speach


Agglomeration, Collocation, and Organizational Heritage
Two theoretical streams contributing to explain the formation and evolution of geographical clusters are examined: agglomeration economies and organizational heritage. Agglomeration theory argues that economic benefits from supplier and customer reduction of transportation costs, labor market pooling and intellectual spillovers lead to clustering. Organizational heritage theory focuses on the role played by spinoffs and, more broadly, the transmission of capabilities from parent firms to startups: since the offspring of the better firms inherit more capabilities and therefore become superior performers, and new entrepreneurs tend not to venture far from their geographic origins, the initial establishment of a few good firms in a region eventually leads to a concentration of superior performers.

It is argued that, while the initial stages of cluster growth are dominated by the location choices of spinoff founders (and not by any benefits from agglomeration), in more advanced stages of the cluster lifecycle local networks of external capabilities generate agglomeration benefits that impact the location choices of new founders and the performance of firms. This proposition is tested by examining the evolution of the Portuguese moulds and plastic industries. The empirical approach is twofold: first, an ethnography of the early evolution of the industry is provided; second, detailed data on firms and founders for the period 1987–2009 are used to test the predictions of the two theories. It is found that, while organizational reproduction has played a major role in clustering and collocation of plastics and molds, agglomeration economies recently have gained influence.