Formation and dissolution of inter-firm linkages in lengthy and stable networks in clusters

Abstract

Firms aspire to take advantage of technical and business networks through inter- organizational interactions in order to improve performance. Consequently, researchers are increasingly attracted by the dynamics and implications of network formation at both local and global levels. From another perspective, authors have abandoned a monotonic effect and simplistic approach to proximity, as it emerges as a complex and multidimensional notion. Using data from a foodstuffs cluster located in the Valencia region (Spain) and advanced econometric methods, this paper aims to shed light on the detrimental effects and complementarities that may arise among the proximity dimensions. After controlling for network endogenous forces and firm characteristics, our findings reveal the effect of proximity dimensions on the creation of linkages in advanced stages of the cluster life cycle, in addition to the interactions among them.