The paper is written in collaboration with Hubert Schmitz.

Industrial districts have attracted the attention of development economists in the search for new models of industrial development. Many case studies have shown that clustering helps local enterprises to overcome growth constraints and compete in distant markets. However, empirical studies also reveal shortcomings of the industrial district model. This paper shows that, within the districts, there is enormous heterogeneity by size and performance. Even though clustering firms feed on each other, they vary a great deal in the strategies they employ and the growth they achieve. This internal heterogeneity is investigated for three cases: the shoe industries in Italy, Brazil and Mexico.

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