Abstract:

Porter (2000) suggests that when firms in the same cluster focus on a few locations, cluster participation and location of the firm should be considered as two additional variables in studying the firms’ competitive success. In this respect, we concentrate on innovation activities as the links between the firms in the same cluster. We combine two approaches from economics and marketing in understanding the role of partnerships of the firms in creating the competitive advantage. We suggest that an economic network model can provide a strong proof to effects of forming this type of informational links on creating the competitive advantage. We show that the firms’ participation to the cluster in terms of informational links play a crucial role in their market power. Firms with higher participation rates increase their market share only if the network structure is proper.