SIEPR Policy
paper No. 00-38
Growth in Industrial Clusters: A Bird’s Eye View of the United Kingdom
Catherine Beaudry and Peter Swann
March 2001
This paper studies how firm performance is influenced by the strength of the
industrial cluster (or industrial district) in which it is located. The paper presents estimates of
firm-level growth models for a range of two-digit industries in the UK. In these models,
employment in the firm’s own sector and employment in other sectors is taken as a measure
the strength of the cluster. Strong positive clustering effects are found in many industries, but
nevertheless some clustering effects are negative. The strongest cluster effects are found in
computer, motor, aerospace and communications manufacturing, along other industries in the
financial sector.