Negative Effects of Industrial Clustering on Region Social and Economic Development: System and Agglomeration Approach

Abstract

The Present investigation illustrates the negative side of industrial clustering which often makes regional social and economic policy ineffective. Analyzing data from 790 papers, we identified and described 5 key negative clustering effects. Drawing from a system and agglomeration approach we propose a conceptual mechanism that illustrates cluster influence on a region, focusing on internal parameters which determine the impact nature (positive, negative or neutral). The investigation showed that the genesis of all the negative effects is connected with the tendency of industrial clusters to close in on itself in the medium term. Based on these findings, we propose recommendations on industrial cluster negative influence minimization.