Title: The role of regional clusters and firm size for firm efficiency

Authors: Kornelia Kozovska

Addresses: European Commission, Joint Research Centre, IPSC, Via E. Fermi 2749 – TP 361, Ispra (VA) 21027, Italy

Abstract: Cluster-based economic development has a strong presence in policy discourses dealing with areas related to regional development, competitiveness, innovation, small- and medium-size enterprises for both researchers as well as economic development professionals. As Santos Cruz and Teixeira (2007) point out, there is an intuitive awareness about the growing importance of the cluster debate accompanied by a substantial lack of empirical support in terms of its magnitude and trends. This paper contributes to applied research by offering some insight into the actual impact of regional clusters on firm-level productive efficiency in two Eastern European countries – Poland and Romania, focusing on knowledge- and technology-intensive sectors. It uses newly available data on cluster location from the European Cluster Observatory and matches it with firm-level financial data from the Amadeus database, published by Bureau Van Dijk. The overall results confirm the presence of a cluster effect which is statistically significant and plays a positive role in the reduction of technical inefficiency of firms. There is some evidence that larger firm size matters as well, but results are inconclusive.

Keywords: regional clusters; firm efficiency; small and medium-size enterprises; SMEs; Eastern Europe; cluster policy; industry clusters; Poland; Romania; technical inefficiency; firm size.

DOI: 10.1504/IJGSB.2010.035330

International Journal of Globalisation and Small Business, 2010 Vol.4 No.1, pp.41 - 60

Published online: 21 Sep 2010 *

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