After all, What variables Characterize the Existence of Local Productive Arrangements and Local Roduction Systems?

Abstract

In this paper we established a distinction between the various terms used to characterize clusters of firms. Once in the literature, we identified that the terms, Local Productive Arrangements (LPA) and Local Production Systems (LPS) are used interchangeably. However, these terminologies refer to different stages of development of territorial agglomerations of firms. In the same way, the agglomeration of businesses belonging to a same production chain in a particular region would not necessarily characterize an LPA or LPS. The aim of this paper was to demonstrate the need to combine methods and variables to draw a more accurate and comprehensive territorial productive situation allowing the classification of clusters according to their stage of development and institutional structure. For that purpose, the strength of cooperation between local professionals was considered as a major factor, which creates a competitive advantage that requires exogenous interests to make use of the endogenous capabilities strategically developed and cultivated.