This paper studies the dynamics that cause the emergence of local industrial clusters at a general level. Predictions about these dynamics are deduced from theoretical modelling. The predictions are tested with the help of empirical data from Germany. Three-digit manufacturing industries are...

Local industrial clusters have attracted much attention in recent economic and geographic literature. The focus has been on identifying the conditions for the emergence of such clusters. Here the long-term implications of local industrial clusters are studied. To this end, we examine German...