Explaining urban economic growth through cluster complementarity

What is it about?

We show that it is not necessarily the presence of clusters themselves but rather how they interact with each other that can lead to an urban area having a persistent economic advantage over its peers.

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Photo by Omar Flores on Unsplash

Photo by Omar Flores on Unsplash

Why is it important?

Industry clusters are nearly every economic developers favorite policy buzzword these days, but how much do they actually matter for explaining urban economic growth? Our work provides a framework for addressing this question empirically rooted in growth accounting principles and gives nuance to what it means to have a cluster and how economic development policy can support growth based on an urban area's industry composition.