The clustering of firms,that are part of the same industry,occurs because the resources these firms need-both human and natural-are located in some areas and not others.

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The clustering of firms in the same industry often occurs because specific resources (human, natural, or otherwise) necessary for those industries are more readily available or accessible in certain areas, leading to geographical concentrations of similar businesses. This can also lead to benefits such as shared services, labor market pooling, and knowledge spillovers.

The Clustering of Firms,that Are Part of the Same Industry,occurs