Inter-firm co-operation has been a major theme in the industrial cluster debate but has rarely been investigated systematically. Does it matter? What kind is most relevant? When is it most important?
This paper draws together the results of four cluster studies from South Asia and Latin America. It shows that, while local external economies accrue clusterwide co-operation tends to be selective. In spite of considerable variations in the extent and type of co-operation, some clear results emerge from the four studies. First, co-operating enterprises tend to perform better. Second, recent competitive pressures have led to increases in vertical rather than horizontal co-operation. Third, vertical co-operation increases most when major improvements in quality and speed are required but diminishes subsequently. The paper concludes with two suggestions for further research, one concerned with the role of public mediators in private conflicts and one concerned with shifting the attention from (cluster) internal to external relationships.
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