Analysis On Clusters' Competitiveness, Innovation Advantage And Cooperation

A cluster is a group of producers making the same or similar things in close vicinity to each other. Incentives of firms locating together and the advantages of clusters have been discussed at length since the discovery of the clustering phenomenon. This dissertation focuses on the competitiveness, innovation, cooperation of or in a cluster, especially the relations between each of them.The competitiveness of a cluster consists in cost advantage which attracts firms to agglomerate, and innovation advantage which is the long-run competitive advantage of the cluster. Cluster competitiveness results from agglomeration economies and cooperation, both of which can help to bring about cost advantage and innovation advantage. Cost advantage is largely explained by agglomeration economies, though cooperation actually reduces much transaction costs. Agglomeration can also supply firms with opportunity conditions, appropriability conditions, degree of cumulativeness and knowledge base which are the most important factors to innovate. Innovation advantage is active competitiveness, the precondition of which is cooperation among firms for repetitive learning. With other factors deciding innovation settled by agglomeration itself, firms, the main active part of cluster, are the key to innovation competitiveness and their activities vary with the change of market and institution environments. Repetitive learning based upon firms' cooperation together with the four conditions satisfied by agglomeration give rise to the cluster innovation advantage.In this dissertation, a model describing cooperation among firms is established. The results emphasize institution as the basis of a cluster's competitiveness and indicate that relationships among firms are firstly decided by market, then by institution. When market incentives are strong enough, firms can altogether choose a profit maximizing strategy, competition or cooperation. When there is the lack of market incentives, the excess embededness, excess extraversion, excess vertical cooperation or horizontal cooperation, and asymmetric control power can lock-in the whole cluster, technically path dependence. Market opening and enhanced abilities of self-associations or local government to analyze the market information can exemplify market signals and help cluster break through the path dependence.