Horizontal Clusters and Firm Resilience

ABSTRACT The paper examines the role that cluster‐specific horizontal relationships play in firm resilience following a negative shock. We use the Emilia earthquake that hit part of Emilia‐Romagna (Italy) in May 2012 to provide evidence of the negative effect of horizontal clustering on firm performance after a natural disaster. Moreover, empirical analyses show that firms within industrial districts are able to recover as soon as firms not belonging to industrial districts. The results are established controlling for a wide array of confounding factors, including local supply chain and infrastructure disruptions and alternative location‐specific factors.