Varieties of Capitalism and the Innovation Cluster Environment Open Access

Abstract

Abstract
Varieties of Capitalism and the Innovation Cluster Environment
By Daniel S. Desatnik
Over the past two decades, scholars have successfully made the case for cluster
policy. They have demonstrated the ability of clusters to serve as hotbeds of innovation
and industrial upgrading by resolving problems of coordination, information
asymmetries, and infrastructural capacity. In response, numerous countries have adopted
the cluster model as a central part of their competitiveness agendas. While our
understanding of the benefits of clusters has grown, it has yet to be matched with an
understanding of the effects of the political-economic environment on cluster
development.
This paper addresses this gap from the perspective of the varieties of capitalism
(VOC) literature. The VOC literature provides a firm-centered framework for analyzing
the differences in the political-economic terrain in which clusters are "nested." We posit a
theory that the set of political-economic institutions associated with VOC type affects the
incentives of firms to enter into a cluster, and thus results in observable cross-national
differences in the prevalence, size, and type of clusters.
The empirical data support the theory by showing that the correlates of cluster
formation are notably different at the two opposite poles of VOC typology: liberal-market
economies (LMEs) and coordinated-market economies(CMEs).Whereas competition,
capital mobility, and lack of institutions for coordination help necessitate the move to
clusters in LMEs, these same factors do not assist cluster formation to the same degree,
and can even hinder it in CMEs. Our findings lead us to conclude that there is utility in
the VOC approach to cluster initiatives. While government-backed cluster initiatives
must still be tailored to the specific geographical region, the LME versus CME
distinction provides a general script to be followed for cluster development.

Varieties of Capitalism and the Innovation
Cluster Environment
By
Daniel Desatnik
B.A., Emory University, 2011
Advisor: Richard Doner, Ph.D.
A thesis submitted to the Faculty of the
James T. Laney School of Graduate Studies of Emory University
in partial fulfillment of the requirements for the degree of
Master of Arts
in Political Science
2011

Table of Contents

Table of Contents

CHAPTER ONE: INTRODUCTION.................................................................................................. 1

1.1 LITERATURE REVIEW .................................................................................................................. 3

1.1.1 CLUSTERS AND CLUSTER FORMATION .......................................................................................... 4

1.1.2 CLUSTERS AND POLITICS ........................................................................................................... 7

1.1.3 VARIETIES OF CAPITALISM ......................................................................................................... 8

1.2 PAPER OVERVIEW AND ADDED VALUE ........................................................................................ 12

CHAPTER TWO: THEORY ........................................................................................................... 14

2.1 ASSUMPTIONS AND PREFACE..................................................................................................... 14

2.2 RELATIVE BENEFITS OF THE CLUSTER ENVIRONMENT BY VOC TYPE .................................................... 16

2.3 CAUSAL MECHANISM ............................................................................................................... 24

2.4 HYPOTHESES .......................................................................................................................... 28

CHAPTER THREE: RESEARCH DESIGN AND EXPECTATIONS ....................................................... 30

3.1 UNIT OF ANALYSIS................................................................................................................... 30

3.2 INDEPENDENT VARIABLE: VARIETY OF CAPITALISM ........................................................................ 31

3.3 DEPENDENT VARIABLE: MEASURING CLUSTERNESS ........................................................................ 32

3.4 MEASURING INNOVATION: PATENTS .......................................................................................... 38

3.5 CONTROL VARIABLE: POPULATION DENSITY ................................................................................. 40

3.6 DATA SOURCES ....................................................................................................................... 41

3.7 HYPOTHESIS TESTS .................................................................................................................. 42

CHAPTER FOUR: EMPIRICAL TESTS ........................................................................................... 46

4.1 HYPOTHESIS 1:. ...................................................................................................................... 46

4.2 HYPOTHESIS 2: ....................................................................................................................... 55

4.3 HYPOTHESIS 3: ....................................................................................................................... 58

CHAPTER FIVE: DISCUSSION ..................................................................................................... 72

5.1 POLICY IMPLICATIONS .............................................................................................................. 72

5.2 FUTURE RESEARCH .................................................................................................................. 74

REFERENCES ............................................................................................................................. 77

About this Master's Thesis

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• Permission granted by the author to include this thesis or dissertation in this repository. All rights reserved by the author. Please contact the author for information regarding the reproduction and use of this thesis or dissertation.

School	Laney Graduate School
Department	Political Science
Degree	MA
Submission	Master's Thesis
Language	English
Research Field	Political Science, General
Keyword	varieties of capitalism, business clusters, CME, LME, innovation clusters
Committee Chair / Thesis Advisor	Doner, Richard, Emory University
Committee Members	Reinhardt, Eric, Emory University Remington, Thomas F, Emory University

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