Cluster policy and firm performance: a case study of the French optic/photonic industry

This study analyzes the effects of a cluster policy on firms' productivity, employment and total fixed assets in the French optic/photonic industry. Exploiting firm-level data between 1996 and 2008, it analyzes the selection process of the cluster policy through a logit model, before combining a propensity score matching (PSM) procedure and a difference-in-differences estimation to capture its impact on firms' performance. It is shown that larger firms are more likely to be selected by the public policy. Second, the firms that received the competitiveness cluster certification became more productive and increased both their employment and their total fixed assets levels.