The cluster as market organisation

This paper views clusters as a specific spatial configuration of the economy suitable for the creation, transfer and usage of knowledge. It investigates how the modern exchange-economy becomes organised as rent-seeking firms build network relations to create knowledge and obtain resource efficiency while keeping transaction costs at bay. It moves on to consider the cluster as an emerging, self-organising, attractive alternative for interfirm relationships in cases where (global) network formation becomes a less feasible strategy. The paper empirically investigates two industries where clustering for different reasons might be considered superior to other forms of market organisation.