Clusters and Comparative Advantage: Implications for Industrial Policy Andrés Rodríguez-Clare Economics Department Pennsylvania State University September 2005 Abstract Industrial agglomeration or clusters arise in the presence of industry-speci
c and local externalities, also called Marshallian externalities. The standard argument is that such externalities may justify a policy of infant-industry protection to allow and encour- age clusters to emerge. In this paper I explore this carefully, and show that di¤erent policy implications emerge under a more realistic modeling of clusters.
- recent survey of the empirical literature
- countries with an abundance of natural resources
- infant-industry protection
- infant industry through protection
- natural
- developed countries
- sector
- policy
- model
- production