Previous research on the genesis of industrial clusters has focused on macrolevel (e.g., agglomeration economies and institutions) or mesolevel explanatory factors (e.g., serial entrepreneurship, spin-offs). Less studied are the microfoundations of cluster genesis, intended as the individual- and group-level processes underlying such macrolevel outcomes. Yet, microfoundations are key to understanding the "primordial soup" of cluster genesis—that is, the processes unfolding in the early moments of cluster formation, before the first emergence of commercial activity. Through a historical case study of the British Motorsport Valley (1911–1970s), we trace back the primordial origins of this cluster to the casual leisure activities of groups of amateur motorsport enthusiasts who then prompted the professionalization of motorsport racing and its transformation into the business at the core of the industrial cluster. We theorize that clusters emerge through the layering of different domains (casual leisure, serious leisure, and business), each made of three elements (actors, activities, and artifacts), which interact via two microlevel mechanisms: (1) localizing passion, a shared emotional energy by which people become affectively attached to the spaces where they carry out activities that they enjoy; (2) domain repurposing, the shift of a configuration of actors, activities, and artifacts toward a new purpose, originating a new domain. Whereas domain repurposing induces the transformation of activities from leisure to business (thus originating the industry at the core of a cluster), localizing passion anchors the activities to the same geographical area (clustering the industry). Our key contribution is to explore the emotional microfoundations of cluster genesis.
This article examines the origin of the "Prancing Horse" symbol and its role in helping the racing team Ferrari survive under the fascist regime in Italy. Enzo Ferrari, the company's founder, adopted the coat of arms of Francesco Baracca, the most renowned Italian military aviator during World War I, as the logo of his new racing team. By repurposing it from military aviation to motorsport, he benefitted from powerful cultural associations and strong political and cultural endorsement of Baracca's persona. Drawing from scholarship on cultural branding and consumer culture, this study shows how new companies can establish powerful business icons by borrowing symbols connected to populist worlds and national ideologies, and transferring them to various industries. Strategic repurposing thus emerges as a distinct process within cultural branding to obtain institutional support and establish powerful brand identities in challenging contexts.
Until recently, scholars have customarily lumped multiple dimensions of environmental change into single constructs, and usually ascertained that the more the context changes, the more value firms derive from higher levels of exploration. In sync with more recent studies focusing on specific dimensions of change, in this paper we borrow theoretical elements from systems theory to examine the possibility that the reward to developing innovative product components may itself be eroded by implicit and yet burgeoning costs to fit the new component technology into existing architectures, thereby dampening system performance. Specifically, we theoretically assess how varying magnitudes of industry regulatory changes affect the optimum level of firm exploration, and propose—counterintuitively vis-à-vis past literature—that the more radical (i.e., competence destroying), as opposed to incremental (i.e., competence enhancing), these changes are, the more the optimum intensity of firm exploration recedes. Based on quantitative as well as qualitative empirical analyses from the Formula One racing industry, we precisely trace the observed performance outcomes back to the underlying logic of our theory, stressing that impaired capabilities to integrate the new component in the architecture redesign and time-based cognitive limitations both operate to inhibit the otherwise positive relationship between firm exploration and performance. In the end, we offer new insights to theory and practice.