Research on the spatial distribution of economic activity has mainly focussed on identifying conditions that sustain industrial clusters, as they are perceived to be the locus of regional economic growth. Taking this static perspective, today only little is known about the factors that...

This paper explores the impact of industrial clusters on regional growth at level of German labour market regions within a regional convergence model. It focuses on vertically connected industrial sectors, which can emerge parallel to horizontal interconnections. Based on works of Schnabl (2000)...