Cluster policy and firm performance: a case study of the French optic/photonic industry

ABSTRACT

This study analyzes the effects of a cluster policy on firms’ productivity, employment and total fixed assets in the French optic/photonic industry. Exploiting firm-level data between 1996 and 2008, it analyzes the selection process of the cluster policy through a logit model, before combining a propensity score matching (PSM) procedure and a difference-in-differences estimation to capture its impact on firms’ performance. It is shown that larger firms are more likely to be selected by the public policy. Second, the firms that received the competitiveness cluster certification became more productive and increased both their employment and their total fixed assets levels.

KEYWORDS:

• cluster policy
• productivity
• difference-in-differences
• optic/photonic industry

JEL:

• L25
• L52
• R12

ACKNOWLEDGEMENTS

The authors thank two anonymous referees for their very helpful comments.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. Eleven NAF two-digit codes which belong to the optic/photonic industry.

2. The Stata command psmatch2 is used to calculate the propensity score and to construct the control group.

3. In the first step of the analysis, we use labour productivity rather than the TFP because it can only be computed for 33 firms concerned by the public policy in 2004.

4. Indeed, in the file 2008 of FARE, there are many missing columns in firms’ balance sheets. As a consequence, it is hard to estimate the TFP using the semi-parametric method of Levinsohn and Petrin (2003).

Additional information

Funding

This work was supported by a public grant overseen by the French National Research Agency (ANR) as part of the Investissements d’Avenir programme [reference number ANR-10-EQPX-17] of the Centre d’accès sécurisé aux données – CASD (see https://www.casd.eu/en/write-down-your-articles/).