Cluster Shocks and Firm Failure: The Contingent Effects of Community Social Capital

This study examines how the social capital associated with communities embedded in a cluster enhances or ameliorates the influence of agglomeration economies or diseconomies on firm failure during non-recession and recession time periods. Using data on all traded clusters in the United States from 1998 – 2011, the findings reveal that agglomeration benefits erode as clusters grow large, revealing a U-shape relationship between cluster size and...