THE EVOLUTION OF INDUSTRIAL CLUSTERS — SIMULATING SPATIAL DYNAMICS

Industrial clusters have received much attention in economic research in the last decade. They are seen as one of the reasons for the economic success of certain regions in comparison to others. This paper studies the evolution of such industrial clusters. To this end, a spatial structure of regions is set up and the entry, exit, and growth of firms within these regions is modelled and studied with the help of simulations. We are able to obtain some knowledge about the basic characteristics of this dynamic process and about the spatial relation between industries that results. It is shown that it matters whether one or the other industry appears first and that location of clusters of one industry influence the location of other industries. Furthermore, some necessary conditions for the evolution of industrial clusters are identified.