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Regional Economics: Theory and Practice
 

Effect of clustering on stable operation of a business

Vol. 12, Iss. 48, DECEMBER 2014

Available online: 18 December 2014

Subject Heading: ISSUES ON ECONOMICS

JEL Classification: 

Pages: 59-66

Vasin N.S. State University - Education-Science-Production Complex, Orel, Russian Federation
vasinn@rambler.ru

Importance Currently, cluster integrated formations have demonstrated very high efficiency. Obviously, such integration can have a significant impact on the financial and economic sustainability of enterprises being part of a cluster. Due to lack of existing research in this area, I have examined a possibility of increasing sustainability of enterprises within a cluster integrated formation.
     Objectives The objective of this work is to analyze the factors affecting the stability of operation and development of enterprises being part of a cluster integrated formation.
     Methods In this paper, I used the system analysis and the set-theoretic approach.
     Results I have revealed the factors contributing to an increase in efficiency of enterprise functioning within a cluster integrated formation. The study includes an analysis of sustainability of enterprises within a cluster. The analysis shows that an increase in sustainability may be associated with increased labor productivity and production efficiency, as well as geographic proximity of enterprises that operate in more comfortable logistics environment. Additionally, enterprises have a chance to establish partnership relations within a cluster, which not only provide coordination of joint actions, but also reduce a number of transactions between partner companies. As a result, each cluster element is interested not only in achieving a high level of performance, but also in the success of its business partners within the cluster formation. I have taken into account a possibility of synergistic effect, which also contributes to increasing sustainability of enterprises being part of a cluster.
     Practical Application The results of the study can be applied for managing sustainability of enterprises within a cluster integrated formation.
     Conclusions and Relevance I conclude that there are prerequisites for increasing sustainable functioning and development of enterprises in a cluster integrated formation. It is necessary to assess and maintain stability of not only individual enterprises, but also of intra-cluster relationships, which are based on partnership of the enterprises.

Keywords: economic sustainability, diagnosis

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