The Determinants of Cluster Activities in the Australian Wine and Tourism Industries

Abstract

This paper discusses wine and tourism clusters and the recent innovation of wine tourism in which businesses operate within both industries. The concept of micro-clusters is examined in terms of trust, networking, collaboration and other activities, all of which are argued to depend on the concepts of game theory and sunk costs. The study involved both interviews and a questionnaire. Conceptual variables are created from the questionnaire responses using factor analysis. The determinants of cluster activities are modelled using regression analysis. The effects of industry, place and respondents' entrepreneurial characteristics are used as exogenous variables. The study finds that industry does seem to be more important than place in the determination of networking and cooperative cluster activities, and that members of the wine tourism industry participate more in these activities than members of the tourism or hospitality industries. The addition of three variables that embody the entrepreneurial characteristics of the respondents approximately doubles the explanatory power of the original models. There is evidence to suggest that cluster activities are idiosyncratic for each industry–place cluster. The effects of firm size on cluster activities are also examined. No evidence is found of cooperative activities depending on cluster size. The main results support the contention that sunk costs are important in the determination of cluster activities.