Spin-off and clustering: a return to the Marshallian district

Abstract

The origin and growth of industry clusters have attracted the attention of scholars and policy makers since the early era of industrialisation. The seminal work by Alfred Marshall has represented the foundation for a rich strand of literature, whose late expansion and refinement were inspired by the experiences of localised development in emerging regions. This is the case of Italian industrial districts, which have emerged as a territorial model of industrial agglomeration, decentralised production and flexible specialisation. Recently, the traditional explananda of the emergence of clusters have been reconsidered. The evidence about the growth of clusters in areas that did not have obvious natural advantages, or the first comers’ benefits of early agglomeration economies, has inspired a different conceptualisation, which draws consistently from the evolutionary perspective on industrial dynamics. Klepper shows that more successful firms have higher spin-off rates and their spin-offs tend to outperform competitors. Organisational reproduction and heredity are thus identified as the primary forces underlying clustering. The present paper investigates the emergence and evolution of an Italian industrial district, the Sassuolo tile district, one of the largest and most successful ceramic districts in the world and a paradigmatic example of an Italian Marshallian district. Overall, our findings confirm that organisational reproduction and heredity represent primary mechanisms of clustering. However our results also show that spin-offs do not perform better than non-spin-offs. It appears that, in dense industrial environments and social networks, competitive advantages can also be acquired or built through other channels.