Coping with Economic Crisis: Cluster Associations and Firm Performance in the Basque Country

  • Isabel González-BravoEmail author
  • Santiago M. López
  • Jesús M. Valdaliso
Part of the Advances in Spatial Science book series (ADVSPATIAL)


Economic crises, such as that which started in 2007, increased business turbulence and threaten firms’ survival in many different ways. Economic instability plays a role akin to a natural selection mechanism, allowing the best performing and most competitive firms to survive. The aim of this work is to analyse to what extent firms belonging to cluster associations can “shelter” from adverse economic scenarios, and promote a better recovery, when economic conditions begin to improve. The paper analyses the performance of 405 firms that operate in key sectors, covered by five cluster associations in the Basque Country region of Spain, during the years 2011–2014. We employ seven performance ratios commonly used to measure firms’ economic and financial conditions to check if operating performance, during a period of economic instability, presents significant differences between affiliated and non-affiliated firms that may result in higher adaptation, and resilience, of the former ones. The results suggest that associationism does indeed provide certain advantages in periods of economic growth in the wake of a recession. There is a positive and significant relationship between membership of a cluster association and certain performance indicators, mainly sales growth. The affiliated companies perform better even in adverse economic environments, retaining their ability for differentiation, compared to non-affiliates, and, furthermore, this capability would be bolstered when the recovery begins.


Clusters Crisis Two-step cluster Firm performance 



The financial support of MINECO (grants HAR2012-30948 and HAR2013-40760-R) is acknowledged.


  1. Altman, E., & Hotchkiss, E. (2006). Corporate financial distress and bankruptcy. Hoboken, NJ: Wiley.Google Scholar
  2. Amat, O. (2010). Estrategias empresariales para generar valor en tiempo de crisis. Revista de Economía, 3, 44–53.Google Scholar
  3. Antonioli, D., Bianchi, A., Mazzanti, M., Montresor, S., & Pini, P. (2013). Innovation strategies and economic crisis: Evidence from firm-level Italian data. Economia Política, 30, 33–67.Google Scholar
  4. Aranguren, M. J., De la Maza, X., Parrilli, M. D., Vendrell-Herrero, F., & Wilson, J. R. (2014). Nested methodological approaches for cluster policy evaluation: An application to the Basque Country. Regional Studies, 48(9), 1547–1562.CrossRefGoogle Scholar
  5. Bagwell, S. (2008). Creative clusters and city growth. Creative Industries Journal, 1(1), 31–46.CrossRefGoogle Scholar
  6. Bell, S. J., Tracey, P., & Heide, J. B. (2009). The organization of regional clusters. Academy of Management Review, 34(4), 623–642.Google Scholar
  7. Bruno, A. V., Leidecker, J. K., & Harder, J. W. (1987). Why firms fail? Business Horizons, 30, 50–58.CrossRefGoogle Scholar
  8. Burbank, R. K. (2005). The classic five-step turnaround process. case study of ProdiGene, Inc. The Journal of Private Equity, 8(2), 53–58.CrossRefGoogle Scholar
  9. Child, J., Faulkner, D., & Tallmann, S. (2005). Cooperative strategy: Managing alliances, networks and joint ventures. Oxford: Oxford University Press.CrossRefGoogle Scholar
  10. Chiu, T., Fang, D. P., Chen, J., Wang, Y., & Jeris C. (2001). A robust and scalable clustering algorithm for mixed type attributes in large database environment. Proceedings of the 7th ACM SIGKDDD International Conference on Knowledge Discovery and Data Mining, pp. 263–268.Google Scholar
  11. De la Maza, X., Aranguren, M. J., & Murciego, A. (2008). Small enterprises involvement within the Basque cluster policy: A new challenge. 11th European Network on Industrial Policy International Conference, Spain.Google Scholar
  12. De la Maza, X., Vendrell, F., & Wilson, J. R. (2012). Where is the value of cluster associations for SMEs? Intangible Capital, 8(2), 477–496.Google Scholar
  13. Dirección de Economía y Planificación. (2015). Informe anual de la economía vasca 2014. Retrieved June 20, 2016, from http://Www.Ogasun.Ejgv.Euskadi.Net/R51-341/Es
  14. Franco, S., Murciego, A., & Wilson, J. R. (2014). Methodology and findings report for correlation analysis between cluster strength and competitiveness indicators, European Cluster Observatory Report. Retrieved July 3, 2016, from
  15. González-Bravo, M. I., & Mecaj, A. (2011). Structural and evolutionary patterns of companies in a financial distress situation. Advances in Decis Sciences.
  16. Hall, T., & Teal, G. (2013). Understanding the changing nature of cluster drivers. International Journal on Business Review, 2(4), 81–93.Google Scholar
  17. Harfi, M., & Mathieu C. (2009). Investissement en R&D des entreprises et cycles économiques dans les pays de l’OCDE. Centre d’Analyse Stratégique La note de Veille 153.Google Scholar
  18. Henry, N., Pollard, J., & Bennerworth, P. (2006). Putting clusters in their place. In B. Asheim, P. Cooker, & R. Martin (Eds.), Clusters and regional development. Critical reflections and explorations. London: Routledge.Google Scholar
  19. Hsu, M. S., Lai, Y. L., & Lin, F. J. (2014). The impact of industrial clusters on human resource and firms performance. Journal of Modelling in Management, 9(2), 141–159.CrossRefGoogle Scholar
  20. Jostarndt, P. (2006). Financial distress, corporate restructuring and firm survival: An empirical analysis of German panel data. Dissertation, Universität München.Google Scholar
  21. Kahl, M. (2001). Financial distress as a selection mechanism: Evidence from the United States. Anderson School, Finance Working Paper No. 16-01, Available at SSRN: or
  22. Kalafsky, R., & Macpherson, A. (2002). Regional differences in the competitive characteristics of US machine tool companies. Growth and Change, 33(3), 269–290.CrossRefGoogle Scholar
  23. Klepper, S. (2015). Experimental capitalism: The nanoeconomics of American high-tech industries. Princeton: Princeton University Press.CrossRefGoogle Scholar
  24. Krueger, D. A., & Willard, G. E. (1991). Turnarounds: A process, not an event. Academy of Manag Best Papers Proceedings, pp. 26–30.Google Scholar
  25. Lee, J. (2009). Does size matter in firm performance? Evidence from U.S public firms. International Journal of the Economics of Business, 16(2), 189–203.CrossRefGoogle Scholar
  26. Li, J., & Geng, S. (2012). Industrial clusters, shared resources and firm performance. Entrepreneurship and Regional Development, 24(5–6), 357–381.CrossRefGoogle Scholar
  27. Martin, F., Mayer, T., & Mayneris, F. (2011). Spatial concentration and firm-level productivity in France. Journal of Urban Economics, 69(2), 182–195.CrossRefGoogle Scholar
  28. Martin, F., Mayer T., & Mayneris F. (2013). Are clusters more resilient in crises? Evidence from French exporters in 2008–2009. CEPR Discussion Papers.
  29. Mazzucato, M. (2013). The entrepreneurial State: Debunking public vs. private sector myths was first published. London: Anthem Press.Google Scholar
  30. Mcdonald, F., Huang, Q., Tsagdis, D., & Tüselmann, H. (2007). Is there evidence to support porter-type cluster policies? Regional Studies, 41, 39–49.CrossRefGoogle Scholar
  31. Navickas, V., & Malakauskaite, A. (2009). The impact of clusterization on the development of small and medium-sized enterprise (SME) sector. Journal of Business Economics and Management, 10(3), 255–259.CrossRefGoogle Scholar
  32. Neophytou, E., & Mar Molinero, C. (2005). Financial ratios, size, industry and interest rate issues in company failure: An extended multidimensional scaling analysis. Working Paper Series, n° 100, Kent Business School.Google Scholar
  33. Newlands, D. (2003). Competition and cooperation in industrial clusters: The implications for public policy. European Planning Studies, 11(5), 521–532.CrossRefGoogle Scholar
  34. Niresh, J. A., & Velnampy, T. (2014). Firm size and profitability: A study of listed manufacturing firms in Sri Lanka. International Journal of Business and Management, 9(4), 57–64.CrossRefGoogle Scholar
  35. Pearce, J. A., & Doh, J. P. (2002). Improving the management of turnaround with corporate financial measures. Academy of Management Proceedings, B1–B6.Google Scholar
  36. Pearce, J. A., & Robbins, K. (1993). Toward improved theory and research on business turnarounds. Journal of Management, 19, 613–636.CrossRefGoogle Scholar
  37. Porter, M. (1998). Clusters and the new economics of competition. Harvard Business Review, 76(6), 77–90.Google Scholar
  38. Porter, M. (2003). The economic performance of regions. Regional Studies, 37(6/7), 549–578.CrossRefGoogle Scholar
  39. Routledge, J., & Gadenne, D. (2000). Financial distress, reorganization and corporate performance. Accounting and Finance, 40, 233–259.CrossRefGoogle Scholar
  40. Schwarz, G. (1978). Estimating the dimension of a model. Annals of Statistics, 6, 461–464.CrossRefGoogle Scholar
  41. Skalholt, A., & Thune, T. (2014). Coping with economic crisis. The role of clusters. European Planning Studies, 22(10), 1993–2010.CrossRefGoogle Scholar
  42. Smith, M., & Graves, C. (2005). Corporate turnaround and financial distress. Managerial Auditing Journal, 20(3), 304–320.CrossRefGoogle Scholar
  43. Spencer, G. M., Vinodrai, T., Gertler, M. S., & Wolfe, D. A. (2010). Do clusters make a difference? Defining and assessing their economic performance. Regional Studies, 44(6), 697–715.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Isabel González-Bravo
    • 1
    Email author
  • Santiago M. López
    • 1
  • Jesús M. Valdaliso
    • 2
  1. 1.University of Salamanca (Spain)SalamancaSpain
  2. 2.The University of the Basque Country UPV/EHU (Bilbao, Spain)BilbaoSpain

Personalised recommendations