Entry into an industry often clusters in regions where the industry is already concentrated, which is suggestive of agglomeration economies. Regional public research activities may exert another attracting force on entrants into science-based industries. Empirically these proximity effects are confounded by other influences on where entrants originate and locate. This paper begins to disentangle the effects of agglomeration, public research, and the supply of capable entrants for the German laser industry. Our findings indicate that the industry's geography was shaped by the local availability of potential entrants rather than localization economies. The impact of public research increased over time.
Industry clusters agglomeration economies public research entry heritage