Duque, J.C. and Rey, S.J. (2008), "A network based approach towards industry clustering", The economics of regional clusters: Networks, technology and policy.
Abstract: This paper presents a new method for identifying industry clusters. It draws
on network analysis theory and relies on regional input-output tables as the
information source. The methodology can be divided into two main blocks, data
reduction and network partitioning. Data reduction starts by representing
industries and products/services flows as a directed graph, where the links
are represented as arrows indicating the flows directions. Based on several
assumptions about how industries are related into a supply chain, the initial
graph is transformed into an undirected graph by deriving relative weights
from products/services flows. The second reduction is formulated as a
minimization problem, resulting in a minimum spanning tree (MST) for a subset
of the initial graph edges. The final clusters are obtained through selective
deletions of edges in the MST, such that, each cluster contains a core
industry.
Keywords: Industry clusters, Graph theory, Input-output
