Abstract
We provide a novel explanation for why new entrepreneurial entrants choose to locate in clusters despite the intense competition within them. By developing a model of locating in a cluster as a signaling vehicle, we formally demonstrate that high-quality new firms bear the costs of an intensely competitive locale to credibly demonstrate their, otherwise unobserved, resources and capabilities strength. By separating themselves from those who cannot compete, the high-quality entrants are more likely to attract crucial stakeholders. The model integrates organizational economics and organizational capabilities- based literatures in entrepreneurial settings.
| Original language | American English |
|---|---|
| Title of host publication | Volume 3 |
| Subtitle of host publication | Sustainability, Ethics, and Entrepreneurship |
| Publisher | World Scientific Publishing Co. Pte Ltd |
| Pages | 331-362 |
| Number of pages | 32 |
| Volume | 3-4 |
| ISBN (Electronic) | 9789814733311 |
| ISBN (Print) | 9789814733304 |
| DOIs | |
| State | Published - Feb 1 2017 |
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Business, Management and Accounting(all)