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Regional Clusters and Product Market Outcomes During Turbulent Times

Published online by Cambridge University Press:  24 January 2025

Sandy Klasa ,
Hernán Ortiz-Molina Open the ORCID record for Hernán Ortiz-Molina [Opens in a new window]  and
Matthew Serfling
Sandy Klasa
Affiliation:
University of Arizona Eller College of Management
Hernán Ortiz-Molina*
Affiliation:
https://ror.org/03rmrcq20 University of British Columbia Sauder School of Business
Matthew Serfling
Affiliation:
University of Tennessee Haslam College of Business
*
ortizmolina@sauder.ubc.ca (corresponding author)
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Abstract

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We examine whether location within a dense regional cluster of interconnected businesses affected firm performance during the Great Recession and the subsequent recovery. Firms in denser regional clusters experienced faster sales growth than their rivals in less dense clusters, especially firms operating in more competitive industries and those more able to reap agglomeration benefits. They also faced lower uncertainty, invested more in both physical capital and intangible capital, and maintained higher employment growth. Their greater resiliency and agility led to significant increases in their valuations. These results suggest that regional clusters provide competitive advantages during turbulent times.

Information

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , First View , pp. 1 - 39
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Copyright
© The Author(s), 2025. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Footnotes

We thank an anonymous referee, Ran Duchin (the editor), and seminar participants at Queen’s University – Belfast, the University of Arizona, the University of Oklahoma, and the University of Tennessee.

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