Effects of Innovation Cluster and Type of Core Technology on Firms' Economic Performance

Cluster theory is considered one of the most well-known industrial strategies. Following the success attained by several clusters in developed countries in the global manufacturing and information technology market, a number of emerging nations have attempted to build up industry-specific clusters. Numerous clusters have been formed across the world. However, most researchers focus on developed nations rather than developing ones, when empirically analyzing the impact of clusters on economic performance of firms, based on core-technology type. Therefore, this study aims to investigate the effects of innovation clusters and core-technology type (namely, information technology, biotechnology, nanotechnology, and medical technology) on the economic performance of firms in one of South Korea's innovation clusters. A widely employed statistical method, a series of factorial analyses of variance, is used to analyze sample data on firms located in Daejeon Daedeok Innopolis, the biggest cluster in South Korea. The results show a notable clustering effect on firms' economic performance and new job creation. In addition, the type of core technology significantly affects intensity of effect of the cluster on new job creation and economic performance of the firms. Finally, this study presents implications for both academia and industries.