In search for regional clusters in Latvia

Abstract

Regional business clusters are an important component of the regional economy. The overall aim of the present research is to identify regional clusters in the statistical regions of Latvia. The present paper describes the concept of regional clusters, and two general and widely used regional cluster identification methods, i.e. the shift-share and location quotient methods were employed in it. These methods were used to analyse statistical data for the statistical regions of Latvia while examining the strongest industries and the specializations of the regions. By means of these methods, it was possible to identify the regional industries that had a potential to establish strong regional clusters. The research findings indicated that the strongest regional industries were located outside the Riga region. Industries having high regional growth rates and location quotients were identified in Pieriga and Vidzeme regions – postal and courier activities and forestry and logging, respectively. Presumably supplementing industries were identified in the regions of Kurzeme, Zemgale, and Latgale, which had either high regional growth rates or high location quotients, for instance, the manufacture of fabricated metal products and basic metals and the manufacture of wearing apparel and textiles in the Kurzeme region and the manufacture of fabricated metal products and motor vehicles, trailers, and semi-trailers in the Zemgale region. This research paper is the first attempt towards a broader identification of clusters in Latvia’s regions, which, to the best of the authors’ knowledge, is not presently carried out in Latvia. Regional cluster identification leads towards better understanding of regional composition and the results of mapping regional clusters are practically applicable in planning regional development and in the process of planning cluster support programmes, as it enables support measures to be focused on particular industries, thus increasing effectiveness of the support programmes.