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The Effects of Regional Industrial Clustering

The region in which a company chooses to do business can have a serious impact on the way that company is perceived and on its likelihood of success.

Title:
Regional Industrial Identity and Spatial Arrangements in the U.S. Biotherapeutics Industry, 1976–2004

Authors:
Olga M. Khessina and Elaine Romanelli

Publisher:
Samuel Curtis Johnson Graduate School of Management at Cornell University, Research Paper Series No. 07-07

Date Published:
March 2007

Location matters, especially for entrepreneurs and managers establishing a new firm or company subsidiary. In this study, the authors examine the effects of regional identity — that is, the tendency of consumers and businesses to associate a specific region with a specific industry, such as with Los Angeles and motion pictures — on the development of the biotherapeutics industry in the United States. The study reveals that, across a wide range of industries, strong regional industrial identity is an important component and influencer of the entry rate of new firms to the region, and of venture capital and investment directed toward these new firms.

Bottom Line:
The region in which a company chooses to do business can have a serious impact on the way that company is perceived and on its likelihood of success.

 

 

 

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The Effects of Regional Industrial Clustering