Cluster status and new venture creation

Lingli Luo, Xufei Ma, Shige Makino and George A. Shinkle

Journal of Business Venturing, 2020, vol. 35, issue 5

Abstract: We examine how the social status of a cluster contributes to new venture creation. The key thesis of this paper is that cluster status facilitates new venture creation by providing positive decision cues for entrepreneurs; and it serves as a boundary condition of the relationship between cluster size and new venture creation. Based on a sample of township industrial clusters in China’s Guangdong Province from 2005 to 2013, we demonstrate that a higher-status position of the focal cluster or status spillover from related clusters (i.e., geographically proximate or domain-overlapped clusters) results in higher levels of new venture creation in the focal cluster. We also find that the relationship between cluster size and new venture creation is stronger for lower-status clusters and for clusters with a lower level of status spilled from geographically proximate clusters. Our research has implications for both entrepreneurs and policy makers.

Keywords: Cluster status; Inter-cluster status spillover; New venture creation; Cluster size; Township industrial clusters (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:35:y:2020:i:5:s0883902618304750

DOI: 10.1016/j.jbusvent.2019.105985

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