Cluster status and new venture creation

•This research investigates the impact of cluster-level status on new venture creation.•Cluster status is positively related to new venture creation within the focal cluster.•Geographic and domain status spillover are positively related to new venture creation within the focal cluster.•Cluster statu...

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Bibliographic Details
Published in:Journal of business venturing 2020-09, Vol.35 (5), p.105985, Article 105985
Main Authors: Luo, Lingli, Ma, Xufei, Makino, Shige, Shinkle, George A.
Format: Article
Language:English
Subjects:
Businesspeople
Cluster size
Cluster status
Entrepreneurship
Inter-cluster status spillover
New venture creation
Township industrial clusters
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Summary:•This research investigates the impact of cluster-level status on new venture creation.•Cluster status is positively related to new venture creation within the focal cluster.•Geographic and domain status spillover are positively related to new venture creation within the focal cluster.•Cluster status and geographic status spillover weaken the relationship between cluster size and new venture creation.•We test our hypotheses based on a sample of Township Industrial Clusters (TICs) in China’s Guangdong Province from 2005 to 2013. We examine how the social status of a cluster contributes to new venture creation. The key thesis of this paper is that cluster status facilitates new venture creation by providing positive decision cues for entrepreneurs; and it serves as a boundary condition of the relationship between cluster size and new venture creation. Based on a sample of township industrial clusters in China’s Guangdong Province from 2005 to 2013, we demonstrate that a higher-status position of the focal cluster or status spillover from related clusters (i.e., geographically proximate or domain-overlapped clusters) results in higher levels of new venture creation in the focal cluster. We also find that the relationship between cluster size and new venture creation is stronger for lower-status clusters and for clusters with a lower level of status spilled from geographically proximate clusters. Our research has implications for both entrepreneurs and policy makers.
ISSN:0883-9026
1873-2003
DOI:10.1016/j.jbusvent.2019.105985