Track: Undergraduate STEM Research Competition

Abstract

Since the early nineteen hundred several associations have risen. These are cluster associations of concentrated firms belonging to the same industrial sector receiving support from academic institutions and the local government in order to enhance competitiveness. Literature seems to be vast on studying the effect of clusters on the competitiveness of members (see Karaev, Koh, and Thomas-Szamosi 2007; Awad and Amro 2017; Carrie 1999). However, there is vague formal analysis of the effects that clusters have on members' productivity. Therefore, this study aims to analyze whether Geographic Proximity, Social Capital and Innovation within a cluster affect cluster members' productivity, particularly in a local Mexican Home Appliance Industry Cluster (CLELAC). The data for analysis was retrieved using a self-designed survey, applied to current executives from the companies which are members of the cluster. This data was analyzed using the Partial Least Squares Algorythm, introducing the construct of Productivity as the dependent variable, and the constructs of Geographic Proximity, Social Capital, and Innovation as the independent variables.The results suggest that Geographic Proximity and Social Capital within a cluster affect positively firm’s productivity growth, which proves the first two hypotheses of this study. Appart from the hypotheses, two new causal relations were found in the model: Proximity and its positive impact on the cluster’s Social Capital; and Social Capital’s impact on Innovation within the cluster. However, the impact that Innovation within the cluster may have on firm’s productivity could not be proven.