Micro-foundation of Industrial Clusters' Evolution: Implications from a Simulation Approach

Industrial clusters are widely considered as the most remarkably successful developing mode of regional economy. Though, the present literature and conclusions on its evolution are rather confusing. This paper reviews the current literature on industrial clusters from perspectives of bottom-up approaches, in an attempt to revealing the micro-foundations that underpin their evolution. By swarm-simulation approach, which is introduced as an effective approach to describe and experiment evolution of an industrial cluster, this paper argues that firms' adaptive behaviors are one of the driving forces which push the evolution of industrial clusters. The paper concludes that geographical proximity, social behavior coordination mechanism and government intervention are prerequisites for industrial clusters' evolution.