Industry cluster, organizational diversity, and innovation

Abstract

This study explains the factors that enhance the innovation performance of a cluster by focusing on its knowledge spillovers. Based on the literature on industry clusters, organizational diversity, and innovation, we suggest testable propositions. Specifically, this study suggests that two types of organizational diversity (diversity of nationality and organization type) positively impact the innovation performance of the cluster. In addition, the cluster network size and embeddedness have a positive moderating effect on the relationship between organizational diversity and innovation performance. This study aims to determine whether the innovation performance of industry clusters varies depending on the degree of diversity of organizations in the cluster and whether their network characteristics may strengthen the positive effect of organizational diversity. This study contributes to the research stream related to industry clusters and organizational diversity and provides practical implications to practitioners participating in creating and growing such clusters.