Institutional Economics Analysis Of Industrial Clusters

Industrial clusters, which is a large number of closely interconnected enterprises and related supporting institutions gather in space, and form a strong, sustainable competitive advantage phenomenon in a particular area (usually a leading industry for the core). Trust relationship, which is formed in closely interconnected enterprises, is the advantages of the development of industrial clusters, an invisible Contract, and its existence greatly reduces moral hazard so that transaction costs between enterprises have been reduced. Cluster development requires supports from a number of factors, such as good market conditions, sound environment, favorable economic institutional, desired cultural traditions and historical details, government policy and so on. The institutional and the cultural factors have a direct impact on the efficiency of clusters. Institutional, including the official and unofficial institutional, and the unofficial institutional, particularly cultural factors, is the spirit of cluster evolution, and could not be imitated among the areas. But with the development of market economy, the transaction based on the personification of industrial clusters is gradually being alternated by anonymous market transactions, the function of unofficial institutional to governance economic transactions has been severely weakened, and gradually being replaced by a official institutional.In recent years, with its unique external economical effect, innovation and spread effect and regional brand effect, industry cluster attracts the attention of all countries'scholars and public policy makers. It not only promotes economy growth of the region, but also strengthens the competitiveness of this area. Thus, some countries'local governments have turned its focus from industrial policy to cluster policy. Despite of this, most governments still know little about the mechanism of industrial clusters growing because cluster growing theories are not perfect and are not spread widely. Many local governments in china are in this rank, they either didn't know how to deal with a growing industrial cluster. This paper attempts to analysis the development of industrial cluster through studying the gather theory and the institutional economics theory with some cases about industrial clusters of Taiwan-funded enterprises in Fujian province.Since reform and opening up, Fujian, with its special geographical location and deep historical roots, had become a popular area for Taiwan businessmen investing in mainland China, and the industries were relative concentrated, which have a certain economic scale. The relationships of"five origins"between Taiwan and Fujian—unofficial institutional, promote relative concentration of the earlier Taiwan-funded enterprises in Fujian. Along with the development of market economy, the unofficial institutional was gradually weakened, Taiwan-funded enterprises in Fujian were westward precisely for this reason, and Fujian was marginalized. In order to promote the development of industrial clusters to enhance the competitiveness of the regional industry, Fujian must strengthen the institutional supplying to form a stable institutional structure, so that clusters and institutional can promote each other, and continue to develop. Official institutional is implemented by the Government. Government, through the improvement of the soft environment for investment, such as striving to get the national policy support, the smooth flow of traffic arteries to build, developing and introducing preferential policies to promote the formation of the industrial chain.In short, in the industrial cluster developing to a certain extent, the government should make efforts to promote the establishment of institutional and perfect it to ensure the contracts between enterprises within the cluster to be effectively implemented.