Value Chain Glossary: Agglomeration Strategy
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Agglomeration Strategy
An approach for increasing the horizontal coordination between firms performing similar functions in a sector. Coordination between agglomerated firms optimally results in transaction cost savings, collective economic efficiencies, learning, and/or economies of scale. Economies of scale created through agglomeration strategies can accelerate innovation through more rapid problem solving and greater market access. Examples include a trader organizing the collection of outputs from multiple firms or, alternatively, the collection of outputs being organized by a producer cooperative or an exporter.
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Related Articles
- Horizontal Linkages
- Competitiveness Strategy
- Discussion Paper: Integrating Micro-and Small Scale Enterprises into Productive Markets Bloom, David; Dunn, Elizabeth; Clark, Cari Jo; Church, Phillip; Evans, Shand; Huang, Yi-an; Atcha, Shehnaz; Salyer, Patrick. March, 2007.
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