Institutional thickness and inter-organisational collaboration in clusters

This paper investigates the role of institutional thickness in inter-organisational collaboration in clustered firms. Institutional thickness refers to an integrated and interlocking web of supporting formal and informal institutions including local chambers of commerce and trade associations as examples of the former, and social networks as examples of the latter (Keeble et al 1999). We theoretically explore the extent to which, and mechanisms through which, institutional thickness facilitates collaboration, drawing on concepts of reciprocal altruism, transactive memory and institutional proximity. We argue that institutional thickness fosters a cluster-wide climate of trust and a context conducive to reciprocal altruism (Trivers 1971), which reduces the threat of opportunism and stimulates collaboration towards shared valued outcomes. We further propose that institutional thickness facilitates the development of a shared understanding of sources of valued resources, as well as the adoption of shared values, approaches and policies, which minimise misunderstanding and normative barriers to collaboration. This review makes a number of important contributions to the field. First, we respond to the recognition that much of the research interest in collaborative interaction in clusters has been focused on its description and categorisation, and there have been recent calls for a movement away from ontological investigations to an explanation of the underpinning causes and assumptions (Knoben & Oerlermans 2006). In investigating the factors underpinning the mechanisms through which institutional factors support collaboration, we directly respond to criticisms that much extant literature gives no attention to the factors that differentiate between high-performing and unsuccessful clusters, and begin to address the research gap surrounding the complex, but highly important, micro-level interactions that explain cluster effects on firm dynamics and performance (Cooper & Park, 2008). Second, we highlight how institutional thickness can contribute to value adding activity at the level of the individual firm and in the context of the cluster as suggested in the model of an industry cluster as a value adding web (Brown et al, 2007). We then refer to the Hunter Wine cluster to illustrate the outlined analysis