Clusters & Institutions

Creative clusters are now a popular topic in academic literature and a lot has been written on the positive externalities that emerge from the spatial co-location of similar firms in the same geographic area. At the same time though, academic literature has not yet provided strong empirical evidence on why clusters develop in certain regions. Scholars most often attribute the causes of the development of a cluster to two factors, namely specialisation and human capital. However, a third, less explored approach considers institutions as an equally important determinant of a cluster’s development. The argument of this thesis is in line with the institutional economist perspective and bases its scope on Amin & Thrift’s notion of institutional thickness (1995). In other words, it maintains that the emergence of formal and informal (alternatively, de jure and de facto) institutions is not merely a consequence of agglomeration economies, but rather a key determinant in stimulating the endogenous potential of a region. In particular, the present thesis offers an account of how an increase in institutional thickness affects the economic performance of a creative cluster in terms of buzz and internal interactions, knowledge creation: spillovers and innovation, labour market, and openness and external interactions. This research adopts a mixed methods approach and focuses on Italian fashion clusters, which in the beginning of the 1990s started experiencing severe economic problems and losing competitiveness on the global markets, despite their high levels of specialisation and human capital. In particular, it investigates the economic impacts of Apulia Fashion Makers, a de facto institution that coordinates the activities of a fashion industrial district in the South of Italy, a region often disregarded by academic literature in the field and considered backward in terms of both economic performance and social capital. The analysis is then completed by comparing Apulia Fashion Makers with Consorzio della Moda, a similar, but more established de facto institution that is located in the Northeast of the country and that is considered as a best practice by AFM members. This thesis finds positive results for each indicator and concludes that by increasing its learning-base competitiveness and local and global buzz, institutional thickness is able to shape the long run sustainability of a creative cluster.