Industrial Clusters and Regional Development : A Transaction-Costs Perspective on the Semiconductor Industry

The semiconductor industry is examined in order to explain the different types of institutional frameworks underlying the various notions of industrial cluster and to investigate possible relationships between clustering and innovative regional development. Following a general discussion of the semiconductor industry, the various cluster types identified in the literature are outlined.Next, three different spatial-organizational firm examples from the industry are described.These examples include the Japanese semiconductor producers Sanyo and OKI and the United States producer Motorola.Although these examples appear to reflect simple new industrial clustering arguments, they actually reflect a counterexample in which industrial clustering is used to promote innovation within the firm while at the same time reducing the types of inter-firm information flows and transactions assumed by the simple new industrial clusters literature. Taken together, the counterexamples suggest that many of the assumptions underlying the hypothesized relationship between new industrial clusters and regional entrepreneurship are unfounded. (SAA)